Wednesday, February 8, 2017

How to Identify and Close Business Capability Gaps

Business capability is the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments.

Capability is the ability to do something. A capability is an ability that an organization, person, or system possesses for either problem solving or making a certain achievement. The corporate capability is the collective ability to implement strategy, innovation and make changes. Organization’s capabilities can be categorized into both competitive necessity and competitive uniqueness. Therefore, to run a thriving business, it is critical to identify and close business capability gaps and build organizational competency to reach the business vision and achieve strategic business goals.

Capability gap is the lack of a capability to build business competency or manage changes: Business capability provides a differentiation and the more ability to do things and finish tasks in a consistent manner. It is important to take the logical steps for making an objective assessment of your business capabilities: First, identify your business core capabilities, and hone them into organization-wide competency. Identify the capability gaps for strategy management; also comparing your set of capabilities with competitors' to ensure that it is developing differentiated capabilities to gain unique competency. You should also have an in-depth understanding of what capabilities are important to achieve customer centricity (customers truly value them), and business goals, etc, and how to mind the capability gaps. Create an organizational strategy-capability mapping and make a road map that sets goals for capability shaping and competence building.


The digital capability is dynamic, it is the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments: A typical capability life cycle spans needs, requirements, acquisition, in-service and obsolescence/disposal phases. Enterprise capability management, in essence, consists of a portfolio or matrix of capabilities that are used in various combinations to achieve outcomes. It is not necessary to reinvent the wheel in building capabilities; it is more crucial to build the dynamic business capabilities via those existing building blocks; or recombine those existing capabilities into the more sophisticated capabilities for complex problem-solving. And it’s also important to encourage communication and involvement in core capability development across the organization to ensure business capability coherence. The core business capabilities are often built via cross-functional process management and talent management and applying IT as “superglue to integrate all necessary “hard” and “soft” business elements. There are some of the issues where must be aware of integration of a single functional capability into a holistic portfolio of digital capabilities across all enterprises, to build the unique and sustainable business advantage.


Every organization has some capabilities, the capability maturity can be evaluated via these attributes such as "adoption," “agility,” “flexibility,” “quality,” "value, "”measurability”: A capability gap is about lacking the ability to do something, and a capacity gap is a lack of 'the resources' needed by the processes which operationalize a capability to do a given amount of work. Capacity implies 'quantity'- throughput is a quantity. A process which lacks sufficient resources to do a given amount of work is a lack of capacity. The capacity can reflect the gap in capability,  that might either be a throughput gap or it might be a resource/ process gap for the capability to deliver a different product; processes underpin enterprise capability, and processes streamline business capacity. Enterprise capacity management more refers to a process used to manage IT, and its primary goal is to ensure that IT capacity meets current and future business requirements in a cost-effective manner; enterprise capability management should also include how to divest non-core capabilities to free up resources that can be used to develop and deepen core capabilities with desired attributes we listed above, and improve the overall business capability maturity.


It is crucial to identify and close enterprise capability gaps for achieving the high level business capability coherence, as business capability is the decisive factor for the success of strategy implementation. A cohesive set of business capabilities builds into the business competency; and a core business competency is a deep proficiency that enables a company to deliver unique value to customers, engage employees, out beat competitors, and achieve high-performance business results to compete for the future.


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