Friday, October 1, 2021


The value of capability mapping, design, and improvement is to provide visual understanding of business logic, improve business strategy management effectiveness.

The organizational capabilities today are the result of its history and this history constrains what capabilities the firm can perform in the future. Business capabilities are fundamental pillars to achieve the corporate strategy. 

Capabilities evaluation is a good starting point to assess business strength, and estimate probability of strategy management success rate. A comprehensive capability identification, mapping and business case development help the company achieve its targeted performance and realize the clarified business vision.

Identify key business capabilities: Business capability is the firm’s ability to integrate, build, and reconfigure internal and external competence to address rapidly changing business environments. There are competitive necessities and competitive differentiators. There are many "ingredients" in the business capability: Among them, capability encapsulates people, process, technology and other tangible and intangible resources to improve business performance. 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. And business architecture is an effective tool to identify business capabilities as primary build blocks for the enterprise and enable capability-based strategy management.

To improve business performance and reach a high level of organizational maturity, enterprise capability management, in essence, consists of a portfolio or matrix of capabilities that are used in various combinations to execute the business strategy and achieve expected business outcomes. Both threshold capability and distinctive capabilities are important for the organization to enable the strategy and build their business long term advantage. An unavailable but necessary capability must be created or purchased, or the strategy must be revised.

Identify technical capabilities: Nowadays information technology is permeating everywhere in the organization. Information is useless if it cannot transform into business insight or foresight, and technology by itself is the means to the end, not the end itself. Business capability can "contain" many services, processes, and functionality in which IT is one of the most critical elements in weaving them together and building up business competency. It is important to first define what an IT capability is; create a technical architecture for the enterprise which would have identified the technical capabilities upon which these business capabilities will be reliant; in many cases, applying technical capabilities to business opportunities is where the magic happens. Technical capabilities directly make an impact on business capabilities building and maturity.

All resources, business applications, etc, belong to business processes. While at the age of information, all key business processes are enabled by enterprise IT capabilities. The focus area for building technical capabilities or IT-enabled business capabilities include: effectively leveraging the existing and new technologies to shape dynamic digital capabilities; help innovate business via the process optimization and capacity building; and recombine capabilities to the new distinctive capabilities to improve business agility. In today’s business environment, IT-enabled business capabilities are a fundamental building block in business transformations with which companies can transform the customer experience, operational processes, and business models, to reach a higher level of business agility and maturity.

Create a business capability heat-map and related technical capability heat-map:
IT is often the thresholding business capabilities. This implies contemporary digital business is driven by information technology. As it is an IT capability in most cases would be enabling one or more business capability. The relationship between business and technical capability is that of enabling. If you want to map business applications to business capabilities, you can do this by mapping all the applications associated with business processes to the business capabilities which use the processes. Such business-IT capabilities mapping is trying to assess and define how interconnected the IT organization is to the business, and trying to determine the return on investment for their technical architecture (delivery - services costing) that is mapped to a businesses' capabilities.

The IT architecture is used as a collaboration instrument to create a decent IT-enabled business capability map. The best scenario is to leverage IT architecture for creating a comprehensive capability map through cross-functional collaboration. With IT architecture as an effective mapping tool, those business capabilities with gaps are evaluated more deeply, which produces a list of remediation work that needs completing to improve differentiated business capabilities. Organizations may also use such mapping to identify business capabilities that are neglected by IT and these usually appear as business capabilities that do not have any IT enablers. Business could go one step further to identify business capabilities that are over-enabled by IT(these usually appear as a business capability with so many IT capabilities mapped to it), identify over extended IT capabilities and duplicate IT capabilities and solutions.

Create a business initiative to improve an identified business capability and associated technical capabilities for achieving business outcomes: Capability is still the means to an end - for achieving certain business performance. Create a business initiative brief that describes objectives, scope, business outcomes, business and technical capabilities within scope, approach, costs, time frames, risks, etc as the initial basis for launching the business initiative. First focus on "why" (understanding, qualifying and quantifying the problem and outcomes, etc.), then “what” (the solution, often the technical solution, etc.) In essence, it must deal with cost/revenue/ regulatory /or risk.

If addressing in a business initiative case for business or technical capability improvement, after the “why” clarification, the management needs to clarify: “What” can include both from a business perspective and from a technology perspective. What are the key drivers behind this initiative? What problem or event is driving the need for it? What is wrong with maintaining the status quo? What impact are these problems currently having? How can such an initiative improve the circumstances and solve problems effectively? What’re the financial projections from such initiatives, especially from the intermediate or long term business development perspectives? These are the principal justifications through thought-provoking inquiries behind undertaking the initiative for ultimately improving the organizational competency.

One of the beauties of working with capabilities is that it keeps you from being dragged into all the detail of the processes involved too early. The value of capability mapping, design, and improvement is to provide visual understanding of business logic, improve business strategy management effectiveness, highlight the value of having a good understanding of current and future capabilities, as well as develop and improve the overall organizational competency.


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