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Business Capability

 

According to wikipedia, A capability is WHAT a company or organization needs to be able to do to execute its’ strategy (e.g., Enable ePayments, Tailor Solutions at Point of Sale, Demonstrate Product Concepts with Customers, Combine elastic and non-elastic materials side by side, etc.). Another way to think about capabilities is a container of people, process and technology that is addressable for a specific purpose.

 

Do you agree with this definition?

Tags: business, capability, definition

Views: 1191

Replies to This Discussion

It's a good definition. For reference the TOGAF definition of capability is "An ability that an organization, person, or system possesses. Capabilities are typically expressed in general and high-level terms and typically require a combination of organization, people, processes, and technology to achieve. For example, marketing, customer contact, or outbound telemarketing.".

The key characteristics of a capability that need capturing in a definition are (1) it's WHAT not HOW (2) it's an ability possessed by an enterprise so it exists for as long as the enterprise does or until the enterprise divests itself of the capability (in contrast to say a business service or business process that have a beginning and an end), and (3) it is delivered by a combination of the things you note from Wikipedia.

I prefer the active prose naming convention ("Tailor Solutions at Point of Sale") to the pasive ("Marketing"). I like to be able to construct a sentence that goes like "The firm has the ability to....", which works if you have an active prose naming convention.

BTW - Forrester are doing a lot of work on business capability mapping. The firm I work for uses Gartner so I don't have access. If anyone does I'd be interested in what there take is.
Stephen-

Agreed with your definition. We use "business capabilities" to describe WHAT the business needs to do to achieve their obectives. So we can use a traditional strategy framework to categorize and drive the definition of these "abilities". We identify Mission, Vision, Goals, and Objectives (and associated target measures) and use the objectives as a way to engage the business in a discussion about what they need to accomplish (not HOW they want to accomplish--as you indicated). In architecture terms, strategic plans are lists of capabilities that are aligned with strategic goals and objectives. Existing capabilities have known operational costs and expected lifespan. New capabilities are established to fill gaps. Following pictures describes the high level framework:

By placing “capabilities” in the strategic area, we know WHAT the business desires in the future and as well as the business knows the current maturity of those capabilities to optimize the portfolio. EA can provide a systematic and disciplined approach for optimizing portfolio because EA treats portfolio a collection of capabilities associated with Goals, Objectives, and Strategies for achieving outcome (We can start a seperate thread to discuss EA and capability relationship).

I will also consider Microsoft Business Architecture (MSBA) methodology a great place on business capability mapping. According to MSBA, "Capability – An encapsulation of all the relevant attributes, including people, process, and technology, that the business relies on for a specific purpose or outcome." (see the image below).

I don't have any relevant material from Gartner/Forrester to share with you.


Stephen Ray said:
It's a good definition. For reference the TOGAF definition of capability is "An ability that an organization, person, or system possesses. Capabilities are typically expressed in general and high-level terms and typically require a combination of organization, people, processes, and technology to achieve. For example, marketing, customer contact, or outbound telemarketing.".

The key characteristics of a capability that need capturing in a definition are (1) it's WHAT not HOW (2) it's an ability possessed by an enterprise so it exists for as long as the enterprise does or until the enterprise divests itself of the capability (in contrast to say a business service or business process that have a beginning and an end), and (3) it is delivered by a combination of the things you note from Wikipedia.

I prefer the active prose naming convention ("Tailor Solutions at Point of Sale") to the pasive ("Marketing"). I like to be able to construct a sentence that goes like "The firm has the ability to....", which works if you have an active prose naming convention.

BTW - Forrester are doing a lot of work on business capability mapping. The firm I work for uses Gartner so I don't have access. If anyone does I'd be interested in what there take is.
Sample picture below also describes how a business capability "Notify Applicant" evolves over a period of time. In the example below, while the process "send notification" remains same, the technology component and data component have been improved/matured over a period of time. So, implementation of capability evolve while the capability remains the same.


Syed Suhail Ahmad said:
Stephen-

Agreed with your definition. We use "business capabilities" to describe WHAT the business needs to do to achieve their obectives. So we can use a traditional strategy framework to categorize and drive the definition of these "abilities". We identify Mission, Vision, Goals, and Objectives (and associated target measures) and use the objectives as a way to engage the business in a discussion about what they need to accomplish (not HOW they want to accomplish--as you indicated). In architecture terms, strategic plans are lists of capabilities that are aligned with strategic goals and objectives. Existing capabilities have known operational costs and expected lifespan. New capabilities are established to fill gaps. Following pictures describes the high level framework:

By placing “capabilities” in the strategic area, we know WHAT the business desires in the future and as well as the business knows the current maturity of those capabilities to optimize the portfolio. EA can provide a systematic and disciplined approach for optimizing portfolio because EA treats portfolio a collection of capabilities associated with Goals, Objectives, and Strategies for achieving outcome (We can start a seperate thread to discuss EA and capability relationship).

I will also consider Microsoft Business Architecture (MSBA) methodology a great place on business capability mapping. According to MSBA, "Capability – An encapsulation of all the relevant attributes, including people, process, and technology, that the business relies on for a specific purpose or outcome." (see the image below).

I don't have any relevant material from Gartner/Forrester to share with you.


Stephen Ray said:
It's a good definition. For reference the TOGAF definition of capability is "An ability that an organization, person, or system possesses. Capabilities are typically expressed in general and high-level terms and typically require a combination of organization, people, processes, and technology to achieve. For example, marketing, customer contact, or outbound telemarketing.".

The key characteristics of a capability that need capturing in a definition are (1) it's WHAT not HOW (2) it's an ability possessed by an enterprise so it exists for as long as the enterprise does or until the enterprise divests itself of the capability (in contrast to say a business service or business process that have a beginning and an end), and (3) it is delivered by a combination of the things you note from Wikipedia.

I prefer the active prose naming convention ("Tailor Solutions at Point of Sale") to the pasive ("Marketing"). I like to be able to construct a sentence that goes like "The firm has the ability to....", which works if you have an active prose naming convention.

BTW - Forrester are doing a lot of work on business capability mapping. The firm I work for uses Gartner so I don't have access. If anyone does I'd be interested in what there take is.
Syed,

I don't see the point of focusing on business capabilities as something distinctive. It's just a category of capability. We should look at capability architecture in the similar way as service architecture. A capability is something global which can have different realisations as a combination of structure, behaviour, data etc. So a capability is both a "need" and the ability so satisfy such a need. A capability A could be a property of a combination X-Y-Z of business services (realised by people, processes, technology) in business ONE and a combination 1-2-3 of other business services provided by business TWO. So, I see capability as an useful abstraction level very similar to services. As service view abstracts from the realising "infrastructure", the same way capability could be both a feature and a set of properties abstracted from how they could be provided (certain service set).

I know there are different EA definitions of capability and may be that above is may not the most popular one. However it works for me and is shared by many other practitioners.

There is a very good PhD dissertation where this view is explained in a SOA context.

Regards

Ivo
Ivo,

While, I do somehow agree that business capability is just a category of capability (e.g. technical capability, business capability) ;I will say that definitely , business capability and services are two different concepts which leads to different kind of focus. It is the business capability that manages "what service at what service level", i.e. business capability enables services or support identification of common services. Business Capability defines organization competencies /capacity/ability to achieve a desired result. This view also provides organization to identify and focus on activities that are critical to business success & where they can achieve differentiation in delivery (i.e. cost or value). Business Capabilities focuses what the business does or needs. Business Capabilities help linking strategies to tactical plan, identify gaps, redundancies, opportunities in the business. In EA terms, I put business capability at the Strategy level to answer question like 'what is to be achieved', whereas, Services are treated at the business process/service level to answers question like 'how are things (or business needs) to be achieved'.

I agree with you that a capability can be used in several processes or services , however, if multiple application systems are used to implement same capability then definitely it is a potential waste in an investment.

Thanks for forwarding me the PhD dissertation; I looked it at a high level; will definitely take a look it again.
Regards

Syed


Ivo Velitchkov said:
Syed,

I don't see the point of focusing on business capabilities as something distinctive. It's just a category of capability. We should look at capability architecture in the similar way as service architecture. A capability is something global which can have different realisations as a combination of structure, behaviour, data etc. So a capability is both a "need" and the ability so satisfy such a need. A capability A could be a property of a combination X-Y-Z of business services (realised by people, processes, technology) in business ONE and a combination 1-2-3 of other business services provided by business TWO. So, I see capability as an useful abstraction level very similar to services. As service view abstracts from the realising "infrastructure", the same way capability could be both a feature and a set of properties abstracted from how they could be provided (certain service set).

I know there are different EA definitions of capability and may be that above is may not the most popular one. However it works for me and is shared by many other practitioners.

There is a very good PhD dissertation where this view is explained in a SOA context.

Regards

Ivo

Hi all,

The concept of "Capability" exist in for example the Nato Architecture Framework and MODAF etc..

I have another question/issue related to this. What about the "Concept of Operations"? This will define how certain and very important aspects within the business must be done in practice according to several constraints, laws, rules and regulations and also agreements between different stakeholders. This will in turn also affect the characteristics of a specific Capability, how the actual operations will be conducted and the deployed services related to this business.

I do have my ideas but I would like to have your opinions/ideas without pin-pointing from my side :-)

 

Regards

Beata

Hi Beata,

 

I agree with you that the characteristics of a business capability is effected by contraints, rules, regulatory requirements etc.. In fact, when you define a capability, you may capture laws, rules, regulatory requirements, service level acceptance (SLE) etc as it relate to a capability. If any of these attribute changes, the ability to perform the capability is impacted as well. Regarding the "Concept of Operations", It is good to define capabilities from this perspective as well. However, I just want to mention that the capability always exist but the ability to perform the capability or the implementation view changes. So, in your "concept of operations", if you want certain capability at certain service level agreement & how the actual opetrations will be conducted etc , then you need to define future capability implementation view in the "concept of operations". Hope , it is helpful.

 

Regards 

Syed

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