Operating Model
Designing a CAO Operating Model
A CAO operating model sets out which administrative services exist, where the work is done, who owns each decision, and how performance is reviewed. This guide covers the core pillars, design steps, a worked service catalog entry, a sample decision-rights matrix, and a governance cadence you can adapt.
Updated 2026-10-029 min read
Model elements
- Shared services
- Decision rights
- Governance cadence
- Service metrics
Framework
Core pillars of a CAO operating model
Use these pillars to align administrative services with enterprise strategy.
Shared services
Define which services are centralized and how they support business units.
Decision rights
Clarify who owns approvals, budgets, and service policy decisions.
Governance cadence
Set weekly and monthly operating forums to track service delivery.
Metrics and SLAs
Establish service-level measures, cost transparency, and stakeholder reporting.
Design
Operating model design steps
Follow these steps to build a model that is practical, measurable, and aligned.
Assess and map
- Inventory current services and delivery teams.
- Identify duplication and gaps in accountability.
- Map stakeholder pain points and bottlenecks.
Design and govern
- Publish a service catalog and ownership matrix.
- Create governance forums and decision rights.
- Define service metrics and reporting cadence.
Deliver and improve
- Implement service-level agreements and feedback loops.
- Track performance metrics and cost-to-serve.
- Iterate quarterly based on data and stakeholder input.
Enable digitally
- Modernize systems that support service delivery.
- Automate workflows to reduce cycle times.
- Use dashboards for enterprise-level visibility.
Decisions
Decision rights as the load-bearing element
Operating models break most often at the seam between two leaders who both believe they own a decision. A CAO operating model is only as good as the clarity of its decision rights, so they deserve more attention than any other element in a redesign. Use a simple matrix: for each significant administrative decision, name who decides, who must be consulted, and who is informed. Resist the temptation to make every decision a consensus. Consensus models survive in stable environments and collapse the moment a tradeoff has to be made fast.
Decisions a CAO usually owns
- Service catalog scope and the definition of what is centralized.
- SLA targets for shared services and the escalation paths behind them.
- Vendor selection for administrative platforms and major procurement categories.
- Internal policy on workplace, travel, and access to enterprise systems.
Decisions a CAO shares
- Capital allocation across administrative portfolios — shared with the CFO.
- People-services scope and total-rewards policy — shared with the CHRO.
- Customer-facing operations boundaries — shared with the COO.
- Major risk and compliance thresholds — shared with legal, audit, and the CEO.
Example decision-rights matrix
The table below is an illustrative starting point, using R (responsible for doing the work), A (accountable for the final decision), C (consulted before the decision), and I (informed afterward). Every organization will adjust it, but each row should end up with exactly one A.
| Decision | CAO | CFO | CHRO | Business unit or department heads | CEO |
|---|---|---|---|---|---|
| Which services are centralized (service catalog scope) | A/R | C | C | C | I |
| SLA targets for shared services | A/R | I | C | C | I |
| Administrative operating budget proposal | R | A | I | I | C |
| Capital allocation across administrative projects | C | R | I | C | A |
| Chargeback or cost allocation method | C | A/R | I | C | I |
| Selection of major administrative platforms and vendors | A/R | C | C | C | I |
| HR policy and total rewards | C | C | A/R | I | I |
| Office footprint and facilities changes | A/R | C | C | C | I |
| Risk appetite for operational and compliance risk | R | C | C | C | A |
Common mistakes
Operating model anti-patterns
Most failed administrative redesigns share a small set of mistakes. Catching them early is faster than fixing them after the model has been published.
Building org charts before services
Drawing reporting lines before the service catalog is defined produces a structure that fits today's people, not tomorrow's services. Always start with the services and the SLAs. Decide who reports to whom only once the work is clearly grouped — see the CAO team structure guide for how that translates into direct-report design.
Centralizing for its own sake
Centralizing administrative work can lower cost, but it can also slow the parts of the organization that need tailored support. Centralize where consistency or scale clearly wins, and federate where local knowledge or speed matters more. A pragmatic mix outperforms a doctrinaire one.
One cadence for everything
Weekly service-delivery reviews and monthly portfolio reviews answer different questions. Forcing them into a single forum produces meetings that are both too frequent for strategy and too infrequent for delivery. Keep the rhythms separate and let each one do its job.
Metrics without owners
A dashboard that lists dozens of metrics and assigns none of them creates noise rather than accountability. For each KPI on the executive view, name a single owner who can move it and show that owner's interventions in the next review. See the KPI patterns in the CAO metrics dashboard for a tighter starting set.
Worked example
What a service catalog entry looks like
The service catalog is where an operating model becomes concrete. Each entry tells internal customers what they can ask for, how, and what to expect, and tells the delivery teams who owns what. The example below shows the fields a useful entry usually contains. The service is illustrative; the structure is what matters.
| Field | Example entry |
|---|---|
| Service name | New hire setup |
| Description | Everything an incoming employee needs from administrative services before day one: workspace, equipment, system access, ID badge, and payroll record. |
| Who can request | Hiring managers, once an offer has been accepted and recorded in the HR system. |
| How to request | A single request form in the service portal, triggered automatically by the accepted-offer record. |
| Included | Desk or remote equipment kit, standard software access, building access, payroll and benefits enrollment setup. |
| Not included | Specialist software (requested separately through IT), recruitment, and role-specific training. |
| Service level | Ready on the start date when the request arrives a set number of working days in advance; the target is published in the catalog. |
| Service owner | Head of administrative services, with IT operations and HR operations as delivery partners. |
| Cost model | Funded centrally; no chargeback, but volume and unit cost are reported by department. |
| Measures | Share of new hires fully set up on day one, hiring-manager satisfaction, and unit cost. |
| Escalation | Service desk, then the service owner, then the CAO's operations lead for repeated misses. |
| Review | Reviewed quarterly at the service performance forum; catalog entry refreshed annually. |
Why this entry works
- It names one owner even though three teams deliver the service.
- It says what is excluded, which prevents most scope disputes.
- The service level depends on the customer doing their part on time.
- Its measures match what the hiring manager actually cares about.
Building a first catalog
- Start with the services internal customers request most often.
- Write entries in the customer's language, not the delivery team's.
- Publish a short first version and expand it, rather than waiting for completeness.
- Use the service catalog template as a starting format.
Cadence
A governance cadence that fits the model
Each forum in the operating rhythm should answer a different question. If two meetings regularly cover the same material, merge them; if a type of decision has no forum, it will end up in corridors or email.
| Forum | Typical frequency | Who attends | Purpose |
|---|---|---|---|
| Service operations huddle | Weekly | Service owners and delivery leads | Review queues, SLA misses, and incidents; assign immediate fixes. |
| Service performance review | Monthly | CAO and direct reports, with finance input | Review KPIs, cost, and risks by service line; agree corrective actions. |
| Customer or stakeholder council | Quarterly | CAO, service owners, and representatives of business units or departments | Hear customer priorities, agree changes to the catalog and service levels. |
| Portfolio and investment review | Quarterly | CAO, CFO, and relevant executives | Prioritize administrative projects and capital requests; track benefits. |
| Operating model review | Annually | CAO and executive team, reported to the CEO, board, or council | Test whether the model still fits strategy; refresh decision rights and the catalog. |
The operating cadence checklist helps set up each forum with a clear agenda, inputs, and outputs.
Delivery models
Centralized, federated, or hybrid
Every administrative operating model makes a choice about where work is done. Most organizations end up with a hybrid, but it helps to make the choice service by service and on purpose.
| Model | How it works | Works best when | Watch for |
|---|---|---|---|
| Centralized | One central team delivers the service for the whole organization. | The work is standard, high-volume, or carries compliance risk. | Slower response to local needs and a sense that the center does not understand the business. |
| Federated | Business units or departments run their own teams to shared standards. | Needs differ sharply by unit, or local knowledge is critical. | Duplication, inconsistent data, and standards that drift over time. |
| Hybrid (center of excellence plus local delivery) | The center sets policy, systems, and standards; local teams handle day-to-day service. | The organization wants consistency without losing proximity to customers. | Unclear handoffs between center and local teams unless decision rights are written down. |
| Outsourced or managed service | An external provider delivers the service under contract, managed by a retained team. | The service is well defined and not a source of differentiation. | Weak contract management and loss of internal knowledge needed to re-tender or bring work back. |
For more on how centralized services are organized and priced, see the CAO shared services guide.
Related guides
FAQ
CAO operating model questions
What is a CAO operating model?
A CAO operating model describes how administrative services are delivered: which services exist and who uses them, where the work is done, who owns each decision, how performance is measured, and which forums review it. It turns the CAO's portfolio into a set of commitments people can rely on.
What are the main parts of an administrative operating model?
Most models have four core parts: a service catalog that defines what is offered, decision rights that say who decides what, a governance cadence of regular forums, and metrics with service levels. Technology, people, and funding arrangements support all four.
What is a RACI matrix and how does a CAO use it?
RACI stands for responsible, accountable, consulted, and informed. A CAO uses it to record, for each significant decision, who does the work, who makes the final call, who must be consulted, and who needs to know. Each decision should have exactly one accountable person.
What should a service catalog entry include?
A useful entry includes the service name and description, who can request it and how, what is included and excluded, the service level, the named owner, the cost model, the measures used, the escalation path, and when it is reviewed.
How long does it take to redesign an administrative operating model?
It depends on the size of the organization and how much changes. Many CAOs publish a first service catalog and decision-rights matrix within their first few months, then phase structural and systems changes over a longer period, reviewing the model at least annually.
Use the operating model toolkit
Download templates and build a clear administrative structure. The shared services guide goes deeper on the catalog and SLA pieces, and the 90-day plan shows how to sequence the rollout.
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