Business-capability mapping is the process of modeling what a business does to reach its objectives (its capabilities), instead of how it achieves it objectives (its business processes). Business capability mapping is being used more and more by information architects and can help align IT strategy with business strategy.
Forrester, a leading IT research firm, defines a Capability Map as “a model of the enterprise associating the business capabilities, processes, and functions required for business success with the IT resources that enables them.” The goal of this approach is to model the business on its most stable elements. While the way in which a business implements its processes is likely to change frequently, the basic capabilities of a business tend to remain more stable. For example, “Process Order,” “Activate Service,” and “Generate Bill” are capabilities found in a typical service company. These basic capabilities are fairly stable, but the “hows” of those capabilities are likely to change as changes are made to the process or new technologies are introduced.
The advantage of a model that is based on the most stable elements of the business is its longevity. Changes to how capabilities are implemented (business processes and technology) do not change the base model. A stable business model means good things for the IT infrastructure that supports it. Therefore, business-capability mapping promotes a strong relationship between the business model and the technical infrastructure that supports the business requirements, resulting in a view of the business model that can be understood by both the business and IT. Capabilities are defined and tied to business strategy. Architecture is aligned with those capabilities and, thus, to the business strategy.
Business capability maps generally describe the capability using the items below. Similar to most other strategic methods, capabilities are described in terms of strategy, process, people, and technology.
- Purpose: The purpose of why the capability is needed is described.
- Business Goals and Objectives: (Strategy) Expected outcomes resulting from the capability are expressed as strategies, objectives, and metrics. Business goals are easier to work with when business management defines specific target outcomes for each capability, such as reducing the cost per mile for a transportation capability. But outcomes do inevitably cross multiple capabilities — like the goal of speeding idea-to-product time, which spans market research, product development, and manufacturing capabilities.
- Processes and Functions: (Process) Capabilities consist of business processes and the siloed functions that flow within and across them. For example, the process order-to-ship spans multiple capabilities, such as sales, order processing, warehouse management, and shipping. The process also spans multiple business units.
- Skills: (People) To provide a capability generally requires skilled people. Skills, defined in a capability model generally drive what is needed to establish talent management system, which has become a hot topic with Human Capital Management executives.
- Technologies: (Technology) A business capability is enabled and supported by technologies, such as application software, hardware, software, and other IT services.
- Future-State Capabilities: Capability maps can be the basis for comparing the “as is” and a “to be” state, yielding a picture of capability, process, technologies and a list of gaps between the two states. And because the model maps capabilities to business goals, organizations, processes, and information, the future-state capabilities can form the basis for both IT and business planning.
According to Gartner, Inc., over the next two to three years, CIOs will be tasked to work with business leaders to identify, develop, and implement new strategic business capabilities (SBCs) that will help restore their organizations to full health in the post-recession world. Mark Raskino, VP and Garner fellow, sums it up well with his statement: “If you think the task ahead of you (the CIO) is simply to introduce a new technology, standardize a disparate set of computer systems across the corporation, update vendor agreements and revise the IT governance structure for your company — think again.”
A strategic discussion about where and when technology investments should be made is as much of a business decision and subject as it is a technology one. Companies compete by strategic business capabilities. Customer relationship management (CRM) and supply chain management are two clear examples of what is meant by an SBC. These are not “just” technologies. They involve process changes, mind-set shifts, new job roles, and organization changes.
Well-defined business capabilities can go far in closing the gap between business interests and technology concerns, if they provide the right level of detail and are consistent. Enterprises that have converged business and technology management are no longer in just technology discussions. Instead, they conduct business discussions about where and when technology investments shall be made. Business capabilities that are understood by both groups facilitate these discussions.
Having an organizational capability map can make the enterprise analysis work of the business analyst go much smoother. As part of Enterprise Analysis, business analysts assess capability gaps to identify new capabilities required by the enterprise to meet a business need (BABOK Task 5.2 Assess Capability Gaps). According to BABOK, the purpose of assessing capability gaps is to “assess the current capabilities of the enterprise and identify the gaps that prevent it from meeting business needs and achieving desired outcomes.”
By assessing capability gaps, business analysts determine if the enterprise can meet the business needs using existing capabilities and using its existing organization structure, people, processes, and technology. If the enterprise can meet the business need with existing capabilities, then the resulting change is likely to be small and less complex. However, if existing capabilities are inadequate, a project will need to create the capability. Adding or significantly altering a capability generally requires significant change to business processes, business rules, workflow, staffing, lines of business, business locations, organization structures, knowledge and skills, training, facilities, desktop tools, data and information, application systems, and/or technology infrastructure. A gap analysis is performed by documenting the capabilities that are needed for the business need, documenting the current state of each capability, documenting future state, and then determining what gaps exist between the current and future state.