What is Business Operating Model - BOM 2024 Full Guide
Written By : Bakkah
15 Jan 2024
The main goal of any firm is to satisfy its customers and clients. This satisfaction is achieved through performing complex various operations in terms of technology, individuals, geographic location, organizational structure and many other things.
How is it possible for the employees to understand and deal with all of these complications?
What is BOM?
Scientists in the field of management developed a model to be taken as a reference for the implementation of the strategic plan of the company so that the company satisfies its customers and clients. This model experienced different stages of development and now it is known as (BOM).
BOM is an abbreviation of the term "Business Operating Model". BOM was defined by some as the tool used for determining the style followed by the enterprise in creating or achieving a goal. Others have given it a simple definition being a model whereby the nature of producing something or proving a service is determined. This includes delivering this product or service to the clients.
Some describe (BOM) as the map of a firm and others call it (Business architecture). They liken it to the map of a building in the sense that they both illustrate in detail the form as well as the characteristics of the building or the firm. Both also have sub-maps illustrating other specific things like those of electricity. Thus, there is a general map that determines the relationships among these operations known as (BOM) that includes other specific sub-maps for each element.
What are the elements of BOM?
BOM includes five elements known as (PILOS) taken from their initials
- Processes and activities – the elements to be performed like financial, human resources, corporate governance operations.
- Information and information systems to support work.
- Locations, buildings, and other assets used to support work.
- Organization and people who perform the work and they are organized.
- Resources and partners from outside the first.
Business Operating Model Example Case study
Imagine a retail store adopting a famous European trademark, for sports outfits for example, which produces high-quality products with reasonable prices available in various countries. The following operations illustrate how it works:
- The central administration is in Europe.
- Manufacturing in Asian countries.
- The targeted markets are Africa and the Middle East.
- The sale is online.
- Prices are competitive with those of other companies.
According to the above mentioned, the general frame of (BOM) will illustrate the following items that facilitate the final delivery with the quality and the value expected by the client.
- The company’s ability to develop and cope with market change.
- Tasks and operations like manufacturing, distribution among other things
- Geography represented in work and sell in more than one place
- Roles and process design
- Organizational structure showing the practical and geographic Integration of roles
- Technology including electronic transactions with customers.
Is BOM beneficial to the firm?
The presence of clear (BOM) helps to:
- Explain the mechanism by which the firm is operating.
- Clarify operational and technical tasks.
- Determine operational disorders and work clashes.
- Detecting responsibility for vulnerabilities and risks.
- Highlight data fragmentation, system and tasks.
How can BOM prevent operations’ breakdown?
- A stable solid (BOM) leads to organizational decision-making.
- It helps to achieve the vision and the message and determines the areas of questioning as well as the effectiveness in dealing with the weaknesses.
- The presence of strong leadership to carry out the strategies can prevent such breakdowns.
- (BOM) prevents personal hesitation that may lead to the centralization of the strategies.
- It organizes the roles of the individuals and their responsibilities and enhances consultations and dependence at the right time and place.
- It improves productivity, and time management determines which tasks need to be prepared and answers what and how questions.
- It represents an organizational roadmap to ensure preparedness and make sure to find the right people at the right time in the long run.
Is (BOM) considered ideal in my company?
It should be said that (BOM) should be present in every firm. However, not all models are the same and effective in supporting the goals of the firms.
how to know that there is a problem with the (BOM) of your firm?
Positive answers to the following questions indicate the strength and the effectiveness of your model:
- Are the capacities of the organizational structures well-defined in a way to fulfill the strategies of your company?
- Are you performing many transactions through trademarks and in different places more effectively than in the past?
- Are you performing your central operations cheaper and more effectively with fewer distractions than those in other places by your firm?
Are your ways and practices allow presenting appropriate people in appropriate times to solve challenges or respond to threats with the least amount of bureaucracy?
- Are your strategies, budget, and planning well-connected with the financial resources bearing in mind the available opportunities?
- Does your firm professionally take and implement decisive decisions faster than the competitors?
- Is there clarity in taking the most important twenty strategic and operational decisions at the firm and who takes these decisions and on what basis?
- Does your firm have a well-coordinated and effective style of work reflecting its culture and achieving its aims positively?
At the end, it can be said that the right (BOM) differs according to the nature, culture, and trademark of the firm. An ideal (BOM) takes into consideration the culture, identity, and philosophy of the firm and enables it to operate well.
BOM needs a high level of expertise and in most cases can be outsourced to a specialized company like Bakkah Inc. We will write a whole article explaining some models of (BOM) and their designs.
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