How a Target Operating Model Drives Transformation

True transformation is an act of self-disruption. It forces a company to question what made it successful in the past, and whether those same practices are blocking its future. It requires rebuilding operations from the inside out.

𝗧𝗵𝗲 𝗦𝗵𝗮𝗹𝗹𝗼𝘄 𝗧𝗿𝗮𝗽: 𝗖𝗵𝗮𝗻𝗴𝗲 𝗪𝗶𝘁𝗵𝗼𝘂𝘁 𝗥𝗲-𝗔𝗿𝗰𝗵𝗶𝘁𝗲𝗰𝘁𝘂𝗿𝗲

Most transformation efforts often focus on superficial wins:

• Tech upgrades with superficial workflow redesign

• Reorgs with unchanged decision rights

• Digital tools bolted onto legacy processes

• Headcount cuts without process automation

These deliver short-term gains but rarely compound. The foundational processes (e.g. how orders move, how payments flow, how service is delivered) stay broken.

𝗣𝗿𝗼𝗰𝗲𝘀𝘀 𝗗𝗲𝗽𝘁𝗵 𝗗𝗿𝗶𝘃𝗲𝘀 𝗩𝗮𝗹𝘂𝗲

Take Quote to Cash (Q2C). It's one of the most critical, complex, and fragmented processes in any B2B company. It spans product, sales, delivery, billing, finance, and customer support. It reduces cycle time from quote to booking, streamlining pricing, approvals, fulfillment, and billing.

One portfolio company I worked with redesigned its O2C process from the ground up:

• 35-day reduction in cash conversion cycle

• 29% improvement in customer satisfaction

• 60% reduction in manual handoffs

• $8M in cost takeout

That's what process transformation results looks like.

𝗢𝘁𝗵𝗲𝗿 𝗣𝗿𝗼𝗰𝗲𝘀𝘀𝗲𝘀 𝗪𝗼𝗿𝘁𝗵 𝗥𝗲𝗯𝘂𝗶𝗹𝗱𝗶𝗻𝗴

• Procure to Pay (P2P): Reengineering procurement can unlock 15 to 25 percent cost savings hiding in fragmented approvals, inconsistent vendor data, and unclear policies.

• Record to Report (R2R): Shaves weeks off the financial close process and delivers faster insights for decision making.

• Issue to Resolution: Turns support functions into experience differentiators instead of cost centers.

𝗧𝗵𝗲 𝗧𝗮𝗿𝗴𝗲𝘁 𝗢𝗽𝗲𝗿𝗮𝘁𝗶𝗻𝗴 𝗠𝗼𝗱𝗲𝗹 (𝗧𝗢𝗠): 𝗧𝗵𝗲 𝗠𝗶𝘀𝘀𝗶𝗻𝗴 𝗕𝗹𝘂𝗲𝗽𝗿𝗶𝗻𝘁

TOM is your future-state roadmap. It’s purposeful and thought provoking. It answers: "How will we operate differently across people, process, tech, and measurement?"

A strong TOM includes:

• Process Architecture: End-to-end workflows that eliminate handoffs and reduce friction

• Org Design: Clear roles and decision rights aligned to the new workflows

• Tech Blueprint: Systems, integrations, and data flows that support automation and visibility

• Performance Framework: KPIs that measure process outcomes and drive accountability

Without this, transformations lack focus and will drift. Teams will optimize in silos. Tech investments miss the mark. Progress stalls.

𝗕𝘂𝗶𝗹𝗱 𝗮 𝗧𝗢𝗠 𝗧𝗵𝗮𝘁 𝗪𝗼𝗿𝗸𝘀 𝘄𝗶𝘁𝗵 𝗮𝗻 𝗔𝗜 𝗔𝘀𝘀𝗶𝘀𝘁

A strong TOM doesn’t start with org charts or technology. It starts with how value flows across the business and what’s getting in the way. The TOM is your blueprint for how the business should run, and it must be grounded in real-world operations.

Here’s what makes it work:

• Start with the customer. Map the journey and identify friction points that block growth, service, or speed.

• Design across functions. Align goals, data, and decisions horizontally — not just in vertical silos.

• Make improvement continuous. Build in feedback loops and operational agility so the model adapts over time.

• Plan for human change. Support adoption with upskilling, role clarity, and performance incentives.

• Sequence smart. Start with high-impact areas. Validate, then scale.

This is where AI becomes a force multiplier. AI can reveal friction in interdepartmental handoffs by analyzing ERP logs, tracking where work slows across teams and who is involved. Once the current state is digitized, AI can simulate future-state changes and test the impact of automation, role redesign, or policy shifts before they go live.

AI won’t define strategy or align stakeholders. But it gives transformation teams a faster, clearer, and data driven foundation for designing how the business should operate.

𝗕𝗮𝗿𝗿𝗶𝗲𝗿𝘀 𝗧𝗵𝗮𝘁 𝗗𝗲𝗿𝗮𝗶𝗹 𝗘𝘃𝗲𝗻 𝗚𝗿𝗲𝗮𝘁 𝗣𝗹𝗮𝗻𝘀

• Middle Management Paralysis: They hold the keys to process execution but often feel most threatened. Involve them early and reframe their roles.

• Legacy Customer Habits: B2B customers cling to "the way it's always been." Modernize their experience deliberately.

• Ecosystem Resistance: Vendors and partners may prefer the old ways. Align incentives or find new ones.

• Integration Drag: Acquisitions bring process complexity. Build integration playbooks, not just systems roadmaps.

𝗟𝗲𝗮𝗱𝗲𝗿𝘀𝗵𝗶𝗽 𝗠𝗮𝘁𝘁𝗲𝗿𝘀

Business transformation succeeds or fails based on the mindset of the CEO and CFO.

Executives who lead process re-architecture treat it as a growth engine, not back-office work. They drive alignment across functions, reduce friction, and build scalable operations. When they don’t, transformation stalls in silos.

Bottom line: Transformation isn’t an ops initiative. It’s a leadership decision with strategic consequences. Get it wrong, and you’re optimizing dysfunction. Get it right, and you’re building a competitive moat.

𝗚𝗼 𝗗𝗲𝗲𝗽 𝗼𝗿 𝗚𝗼 𝗛𝗼𝗺𝗲

The winners in today's market are not just changing software. They're rebuilding the work. They are making process depth their competitive edge.

That depth pays off in:

• Lower cost per transaction

• Faster cycle times

• Fewer errors and rework

• Better customer experience

• Higher EBITDA

This is not surface-level change. This is infrastructure for scalable, defensible value creation.

The firms that win in the next cycle will be the ones that go beyond surface transformation. They’ll rebuild from the foundation up armed with a clear operating model and the courage to change what drives scale.