IT as the Digital Business Capability Builder

Defining your enterprise business capability is part art and part science, and building your business capabilities is more science than art.

A capability is an ability that an organization, person, or system possesses. Capabilities are typically expressed in general and high-level terms and require a combination of organization, people, processes, and technology to achieve. How to run IT as a business capability builder via integrating all those critical business elements into the differentiated organizational competency.

Digital IT is the integrator and superglue to recombinant dynamic business capabilities: Capability can "contain" many services, processes, and functionality in which IT as one of the most critical elements in weaving them together and building up business competency. The capability is the ability to achieve the desired effect under specified performance standards and conditions through combinations of ways and means (activities and resources) to perform a set of activities. The business is then designed around these experience. In any case to monitor or seek disruptive opportunities requires businesses’ transformational capability with agility to adapt to changes. IT plays a more important role in such a digital paradigm shift.

IT capabilities directly make an impact on business capabilities: The capability is the ability to achieve the desired effect under specified performance, standards, and conditions through combinations of ways and means, activities and resources to perform a set of activities. To improve overall competency, digital organizations shift from process-oriented practices to capability-based strategy management. Digital IT is the integrator and superglue to recombinant dynamic business capabilities, without them, strategy execution cannot be sustained, and IT maturity is proportional to overall organizational maturity. Strategies fail either because of improper execution or more likely because the strategy was flawed. It implies the potential organizational capabilities would play the crucial role in setting or resetting the strategic direction of the business in order to implement strategy effectively.

A business capability maturity should be measured by how well it builds the competitive business advantage to shape a people-centric organization: Since a capability is made up of people, processes, and technology, you can use overall process maturity as one part. With a maturity attribute like "adoption," you can measure the percentage of business units engaging the capability on a year by year basis. As it increases, the maturity rises. The organizational capability can be assessed via how well it does for the management of projects and multi-project programs that translate strategic direction into real changes within the organization as well as maintain strategic fit. One way to measure capability maturity is by assessing the capability's effectiveness in achieving the desired outcome. This can also be accomplished by measuring how technologies impact on capability effectiveness as well as how processes impact on capability effectiveness. Overall speaking, the capability maturity can be measured against the achievement of desired business or customer outcomes.

Defining your enterprise business capability is part art and part science, and building your business capabilities is more science than art. Business capabilities are fundamental pillars to achieve the corporate strategy, the capability-based strategy management has a much higher success rate statistically. As IT is in a unique position to oversee the underlying processes and functions, It needs to become the digital capability builder of the organization via weaving all the important business elements and to orchestrate digital transformation seamlessly.

Posted in: Enterprise Capability,IT Transformation