Business Capability Models

A business capability model is a representation of an enterprise, using simple business language, showing what the enterprise does at various levels of detail and abstracted from the organisational structure.  A future-state model will clearly show what capability needs to change to achieve the business strategy.

The business capability model facilitates conversations between the business and IT around delivering the enterprise’s strategy without the distraction and politics associated with organisational silos. Specifically, around the prioritisation of the capabilities that need to be invested in to deliver strategic business outcomes, those that are adequate and those that are no-longer needed.  This effectively bridges the gap between strategic planning and successful execution by providing an actionable focus on priority business capabilities, something that many enterprises struggle with.   This is largely because execution of the strategy is impacted by inevitable changes in the operating environment that drive tactical decision making that may not help realise the desired strategic business benefits .  This situation is exacerbated when execution is not happening at the enterprise level.

There are inevitable risks to the successful use of business capability models with business stakeholders:

  • The most challenging is the fact that this modelling technique tries to break down silos between business units by identifying common capability and common solutions, which may not be welcomed by senior business leaders.
    Mitigation:  ensure that there is real support from the CEO and the board.
  • It forces stakeholders to think about the strategic business requirement first rather than demanding the latest and greatest trendy IT solution.
    Mitigation:  engage with the business early to build close working relationships and trust.
  • It requires the business to take a long term view, this may be a challenge for enterprises that only have a yearly planning cycle.
    Mitigation: use the capability map to move the thinking forward and demonstrate the benefits of multi-year planning.

It is important to remember that modelling is a means to an end and not an end in itself.  That is to say, the focus has always got to be on business value and what the desired outcome is.  Initially this may be as simple as providing a common language for describing the enterprise. As the use of these models in the enterprise matures they can used to support strategic planning and execution.   A great place to start is to use the model to highlight duplicated solutions (i.e. multiple solutions delivering the same business capability) and the impact on running costs.

3 comments… add one

  • Simon Whittle 21/05/2013, 11:58

    Thanks Tony, a useful summary. An additional obstacle can be the fact that these models force business stakeholders to think more than one year into the future as there are always going to be more capability gaps than can be delivered in a year. From my experience, this can be really challenging for organizations that don’t take the longer term view.

    Reply
  • Tony Bright 22/05/2013, 20:49

    That’s a really good point simon, I’ll weave it into the article. Thanks.

    Reply
  • Simon Whittle 23/05/2013, 17:47

    All you need now are some example capability models : )

    Reply

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