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The term operating model may have been first used in corporate-level strategy (see ''[[#History|History]]'' below) to describe the way in which an organization is structured into business divisions, what activities are centralized or decentralized and how much integration is required across business divisions. The term is most commonly used today when referring to the way a single business division or single function operates, as in 'the operating model of the exploration division' or 'the operating model of the HR function'. It can also be used at a much more micro level to describe how a department within a function works or how a factory is laid out. In the section below titled ''[[#Business/IT dialogue|Business/IT dialogue]]'', this article explores one framework for thinking about the IT implications of different corporate strategies.
'The Strategy Journey' framework<ref>https://stratability.co/framework/</ref><ref>http://strategyjourney.com/book/strategy-journey/</ref> lists the operating model as one of five models that need to be strategically designed and executed along the journey of any organization as its navigates through different stages or phases from leadership and motivation, business design, value creation, ''[[business architecture]]'' and business transformation. In this framework, which has undergone extensive studies with many organisations from global tech giants, automotive innovators and start-ups, the operating model is responsible for implementing the strategies and tactics that have been defined in the mission model, [[business model]] and value model. It is the home to an organization's capabilities which change continuously through the transformation model.
When designing a business or functional operating model, Ashridge Executive Education recommends that the work starts with creating a 'value-chain map'.<ref>http://ashridgeonoperatingmodels.com/2015/05/06/working-on-an-operating-model/</ref> This is a way of laying out the work that needs to be done to deliver value to customers. It shows the different delivery chains and how they are linked together or need to be kept separate.<ref>http://ashridgeonoperatingmodels.com/2015/01/21/value-chain-maps-or-capability-maps/</ref> The second step is to create an 'organization model' based on the value chain map. The organization model shows how the different value chains are structured into an organization and includes the support functions, such as Finance, HR and IT.<ref>https://www.ashridge.org.uk/getmedia/e9dbb283-5a04-4079-981a-bda9a4fa9ffa/AOD_Organisation-Charts.pdf</ref> The value chain map and the organization model are the core diagrams of the operating model.
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