Any business that has more than one business unit, or more than one geography, or more than one product/ customer group, must make a strategic call on how to structure its operating model to consider “synergies, specialisations and separations”.
At one extreme the business units can operate completely autonomously with unique process, capabilities and systems; at the other extreme they operate identically using the same processes, capabilities and systems as an integrated unit. In between these two extremes is a spectrum of operating models that deliver different levels of synergy; each model has its own benefits and challenges.
There are five core options that businesses can choose:
- common platform
- common back office
- common processes
Each of these five business models have their advantages and disadvantages based on the specific market structure, operating capabilities and strategic objectives.