“Algorithmic Target Operating Model (ATOM)“
Your one way to sustainable impact on corporate performance
Not a long time ago, companies started experimenting with isolated use cases to get a first feeling of what “digitalization” or “Advanced Analytics” would look like, implementing pilot programs to help them on their way towards understanding new technologies. And today, the digital transformation process is going through a phase between the initial hype and increasing expectation on return on investment.
But why cannot companies exploit the full potential of digitalization? One of the reason can be that new technologies and concepts are too isolated and “on-top” to the existing organizations. By not putting digitalization on top of existing processes and structures while building processes and structures around what is possible with latest technologies today, people can benefit of an Algorithmic Target Operating Model (ATOM) of a function or organization.
The core element of an ATOM is to move away from the fragmented steering of isolated digital use cases and towards an integrated and interconnected system of multiple models acting as one. In other words, use cases such as prediction models should not be used in isolation but rather feed and interact with other simulation, decision and/or optimization models.
Depending on the degree of business partnering between different functional areas, there are several collaboration models which an organization can use to create an ATOM initiative. Looking at this situation from a finance function perspective, we can talk about:
- Finance-only: the goal of these initiatives is to improve core financial processes. They do not require further connections to any related business/service functions
- Driven by Finance: to reach their full potential, additional input/output connections to other business/service functions need to be considered. Therefore, this collaboration model requires the Finance function to coordinate the interaction within the organization. It hence increases the degree of business partnering
- Finance as business partner: This collaboration model contains the highest degree of organizational alignment and comes in useful when algorithmic modules aim to improve core End-2-End business processes. To reach the full potential of an End-2-End approach, Finance acts as one element in the holistic process view