Why Digital Operating Models Are the Cornerstone of Modern Business Strategy
- Richard Keenlyside
- Jul 9
- 4 min read
TL;DR
Modern enterprises face mounting pressure to scale, optimise, and transform in real time. Digital operating models provide a blueprint for aligning strategy, technology, and culture across global businesses. As CIOs and transformation leaders, we must ensure our organisations not only adopt digital models but make them the DNA of decision-making, resilience, and future growth.
Introduction
In today’s digitally connected economy, where global supply chains, AI integration, and hybrid workforces are the norm, companies without a robust digital operating model are simply not equipped to compete. The pace of change demands an architecture that’s agile, scalable, and adaptive.
As someone who has led transformation initiatives across over a dozen sectors—including manufacturing, retail, logistics, and private equity-backed ventures—the need for an integrated digital operating model has never been clearer.
RICE Framework Breakdown
1. Reach Digital operating models impact all levels of the enterprise—from boardroom strategy to supply chain execution. A unified model ensures consistency, visibility, and automation across departments and regions. I’ve seen this in global rollouts spanning 20 countries and managing teams of 600+ staff.
2. Impact High-performing digital operating models deliver measurable results:
£2m reduction in technical debt within 8 months (via Azure migration)
40% efficiency gains in HR and finance using AI Chatbots
75,000 hours saved annually with RPA in utilities
£1.4m turnover increase from home delivery tech adoption in retailThese outcomes aren’t hypothetical—they’re direct results from practical execution.
3. Confidence Enterprise transformation relies on cross-functional expertise. Whether in ERP modernisation (SAP, Oracle, Infor), AI governance, or cybersecurity frameworks, your digital operating model must reflect a maturity roadmap grounded in industry best practice. Confidence is earned through execution, not theory.
4. Effort Creating and embedding a digital operating model is not a “nice-to-have” project. It requires structured planning, stakeholder buy-in, data discipline, and governance. But the investment yields compound returns—reduced risk, enhanced agility, and better decision-making across the board.
The Pillars of a Strong Digital Operating Model
1. Strategy Aligned with Execution
Without strategic alignment, digital models become siloed initiatives. Your operating model must embed:
OKRs that cascade into KPIs
Continuous review cycles
Agile governance at both programme and portfolio levels
At Mothercare PLC, I led a £40m cost transformation programme that separated three P&L entities with shared service layers—a model that enabled successful acquisition and carve-out.
2. Data as a Core Asset
A modern model treats data not just as an input, but as a monetisable and strategic asset. Implementing centralised data lakes and real-time BI dashboards ensures business agility. At M.I. Dickson, we reduced invoice payment delays by 29% and operationalised dashboards through Power BI and Oracle SaaS integrations.
3. Scalable Tech Architecture
From cloud-native infrastructures to composable ERP, the technology stack must flex with the business. Whether using Microsoft Dynamics, NetSuite, or INFOR, your architecture must be scalable. At FitFlop, our global NetSuite deployment standardised operations across three continents and unlocked £2.5m in cost savings annually.
4. Culture and Change Enablement
The biggest blocker to transformation? Not technology. It’s people. Embedding digital requires cultural alignment, skills uplift, and clear governance. Change doesn’t happen in project phases—it’s continual.
Avoid These Mistakes
Confusing digital tools with transformation. Having a chatbot or analytics dashboard doesn’t make your business digital-ready.
Lack of ownership at the C-level. CIOs and CFOs must co-sponsor and co-lead.
Ignoring vendor risk. Multi-sourcing saves cost but increases complexity—governance is key.
Failure to revisit the model. Operating models are living frameworks, not static playbooks.
Real-World Success Stories
Webasto EV carve-out: Delivered an investment options paper evaluating SAP ECC6 vs S/4HANA to support divestiture planning.
Northumbrian Water: RPA initiative saved 50 FTEs, boosting compliance and automating 35% of enterprise reporting.
Retail ERP transformation (FitFlop): Migrated legacy Navision to NetSuite, created global PLM tools, and outsourced QA, yielding global alignment.
FAQs
Q1: What’s the difference between an operating model and digital strategy?
A: Strategy defines the what; the operating model defines the how. A digital operating model bridges intent and execution.
Q2: Can SMEs benefit from digital operating models?
A: Absolutely. The principles of standardisation, automation, and governance scale up or down. I’ve seen £44m turnover businesses gain £1.4m uplift via digital initiatives.
Q3: How often should we review our digital operating model?
A: At least bi-annually. But if you’re scaling rapidly, transitioning ERP, or undergoing M&A, a quarterly review is advisable.
Q4: Should the CIO own the digital operating model?
A: The CIO must co-own it with business leadership. Transformation is cross-functional by nature.
Conclusion
The digital operating model is no longer optional. It’s the connective tissue between vision and value. Whether you're scaling for acquisition, optimising for performance, or modernising legacy systems, it forms the strategic foundation for sustainable enterprise transformation.
If you’re not actively building and iterating your digital operating model, you’re falling behind.
Richard Keenlyside is a Global CIO, PE&MA Advisor, Endava TAC and a former IT Director for J Sainsbury’s PLC.
Call me on +44(0) 1642 040 268 or email richard@rjk.info.
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