Business capabilities: A powerfull tool in your strategic planning

Figure 1 – Business capabilities roles in Strategic planning

  Organizations leverage business capability modeling to express and explore “what is done” so that decisions can be made on “how it’s done”. To make the most of this definition of business capabilities, it should be done in close collaboration with the organization’s leaders. Therefore, business capability modeling must be linked to the organization’s strategic axes.  

Figure 2 – Value streams and Business capabilities

Business capability modeling should identify both current capabilities and new future capabilities to be implemented in relation to the organization’s new objectives and strategic axes. This modeling will also identify the links with the organization’s system and technology architecture.

Technological trends and disruptive innovations can also help identify new business capabilities and influence and enrich the business model. For example, for a manufacturing company, mastering additive manufacturing technology (“3D printing”) can bring a new differentiation business capability.

The following diagram shows business capability modeling at the junction with other business architecture modeling techniques or formalisms (Source: Trisotech).

The characteristics of a business capability model are as follows:

• It covers the entire enterprise with cross-functional units and functions.
• It is a common language to standardize communication across the enterprise.
• The purpose is to describe what the enterprise does without going into the details of how it is done.

Here is an example of a business capability model for a manufacturing company:

Note: We recommend using different layers with color codes to classify capabilities, identify their maturity state, prioritize work, etc.

Although capabilities may be confused with business processes, they are different components of a business. Capabilities define what needs to be done while processes describe how capabilities are executed.

At the higher levels, they may be very similar. Process models are dynamic, with continuous improvements evolving over time, while capabilities remain stable. Business processes reveal how business is done at a given time. Capabilities, on the other hand, are stable, concise, and change little.

Capability provides a more stable view of the business to management compared to a process view. In summary, capabilities orchestrate the different processes that implement them.

Business capabilities can also be classified in different ways to give strategic meaning to each of the organization’s capabilities. The diagram above shows a typical “Strategic-Control-Execution” classification.

Our article “How to classify Business capabilities“ presents another way to classify business capabilities.

Connect business processes to the business capability model.

The EA (Enterprise Architecture) function must link the high-level process view to the business capabilities to enable impact analysis across interdependencies. The most obvious way is to map higher-level process areas into at least one of the targeted business capabilities. It is often convenient to use the value chain model to demonstrate the links. The EA will also link each business capability to other architecture views in addition to processes, such as data, applications, and technologies.