There’s a 2x2 matrix that separates along the dimensions of data integration and process standardization that break into four types of Company Operating Model. Any of the four can work. What’s less effective is being in one, but acting like you’re in another. Your Enterprise Architecture should align to your operating model, or you’ll be constantly fighting an uphill battle and starting from scratch.
Diversification
- ⬇️ Process Standardization
- ⬇️ Data Integration For companies with a diverse customer base, supplier base, and different ways of doing business. Central management doesn’t have much control. The business units have more autonomy. Generally only grow through acquisition or through the growth of individual business units. Diversification operating models are best for businesses with bespoke solutions for unique & individualized customers.
Coordination
- ⬇ Process Standardization
- 🔥 Data Integration Seamless access to shared data. Business units share customers, products, suppliers, or partners. Shared data resources can create difficulties in managing compliance across business units. If a BU isn’t incentivized to adhere to the shared data models, they may begin to create & utilize localized “unofficial” data assets.
Replication
- 🔥 Process Standardization
- ⬇️ Data Integration The replication business model grants autonomy, but within a standard approach. Franchises like McDonalds are prototypical examples of replication. Create a localized, mostly self-contained operating system utilizing the best-practice processes that were honed elsewhere.
Unification
- 🔥 Process Standardization
- 🔥 Data Integration Tightly integrated organizations with little autonomy across business units. Supply chains, customers, products, and all sorts of things are shared across the business. Improvements to the status quo may be difficult at inception, but they may be more easily adopted and exploited throughout the business. Unification models are best for manufacturers of commodities.