Friday, August 7, 2020

Capability Design and Reconfiguration to shape Differentiated Business Competency

The digital capability is modular, dynamic, and nonlinear, having many visible and invisible business elements.

Nowadays we don't live in a "closed system" but the dynamic digital ecosystem which is complex, interrelated, and interconnected, full of opportunities and risks. Every business should spend sufficient time on developing their own unique set of strengths and capabilities. As a matter of fact, a cohesive set of business capabilities becomes the digital competency of the organization. 

In practice, the enterprise capability design and configuration is uniquely challenging because of business constraints, a mixed bag of old and new processes, structures, as well as skill or knowledge gaps.

The differentiated capability as products of creative design must fit inside very strict business constraints: Business capabilities are fundamental pillars to achieve the corporate strategy. Because there are competitions, conflicts, and controversies all over the place in today’s complex marketing environment. Often, business capability design needs to be done under extreme pressure of time, cost, and functionality. There are a couple of important ingredients for configuring business capability such as people, process, knowledge, technology, etc, and you also have to fine-tune soft business elements such as communication and culture for dealing with business frictions, and ensure capability design must fit inside very strict business constraints, make it truly underpin a well-defined strategy.

Capability can be mapped to the processes that instantiate the capability, the technology used, or the information required. The business management should readily consider services, information, asset dimensions of the adequacy of the capability to fulfill their business strategy, as well as the emerging technology, people, or process impact on capability effectiveness. One capability may be implemented by multiple business processes for multiple products and services. Information Technology is usually an important glue to integrate all-important business elements into differentiated enterprise capabilities.

It needs to break down outdated processes, and reconfigure different pieces of components to shape differentiated capabilities: Capabilities oftentimes include dependencies, one is part of another, or depends on another. One of the building blocks of dynamic capability are processes for coordination, integration, and reconfiguration. If the underlying structures and processes are dynamic and flexible the business capabilities can be reconfigured dynamically without reinventing the wheel. 

The business capability is at a higher level than a business process, evaluating processes is an important step in making an assessment of capability. It would be probably best to bracket processes with a capability, then analyze it for redundancy and complexity, and provide a pathway into process optimization. The dynamic capabilities can be built via sensing changes within the business ecosystem. So important business processes need to be reviewed regularly, refined regularly, and are transparent across the business for improving organizational maturity. 

It has to deploy organizational assets in combination and disentangle dynamic capabilities in clusters of processes and managerial orchestration: With fierce competition and demanding customers, designing and building business capabilities becomes a constant process irrespective of the economic conditions. The high-performance digital organizations need to do this under all circumstances. Companies can disentangle dynamic capabilities in clusters of processes and managerial orchestration, continue deploying their business assets and resources, designing and configuring a set of differentiated business capabilities to shape differentiated business competency.

Organizational capabilities continue being considered the market-relevant bundles of resources with the potential to drive business competitiveness. Dynamic capabilities are their strategic routines by which firms achieve new resource configurations as markets emerge, collide, split, evolve, etc. The maturity of a business capability would be based on its ability to deliver on either customer needs or to achieve the desired capability outcome. Dynamic Capability is a firm-specific resource/asset that is difficult if not impossible to imitate. Often, they cannot be transferred because of the degree of organizational learning, unique culture ingredients, and organization that goes with it.

The digital capability is modular, dynamic, and nonlinear, having many visible and invisible business elements, for improving organizational competency. The unique business competency differentiates your organization from competitors, to reach the next level of organizational management maturity. It’s important to map business capabilities and strategies, re-purpose well-designed components and systems for designing and configuring dynamic business capabilities, to ensure that strategic goals can be accomplished quickly and consistently and reach the next business growth cycle effortlessly.


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