Business Capabilities Definition and Example

Business capabilities describe the abilities of a company, what it does, and what it can do. They are increasingly used for different objectives and concepts, such as providing structures for an IT landscape, IT architecture, and business architecture. They are used for alignments, such as between applications, departments, or different companies. They are also used to organize teams, microservices, or agile-working organizations.

How is a Business Capability Defined?

A business capability is the ability of a company to do something and achieve a business outcome with the help of the components people, process, and technology.

Many organizations add additional components to the definition of a capability. Common additional components include its data/information, its context/interdependencies, and its investment/maturity of it.

What is an Example of a Business Capability?

Imagine that you would like to “Produce a Cappuccino”. The below list describes the individual components of this capability and what it would translate into:

– Technology: Coffee machine with pumps, water valves, filter, etc.

– Process: Fill the water tank, add beans, press the button, wait

– People: Coffeemaker employee

– Investment / maturity: Good coffee machine brand, automated coffee making without manual work

– Context / interdependencies: Electricity, a location to place the machine

– Data / Information: Coffee machine handbook, list of frequent issues etc.

All components together enable the café to offer a cappuccino to its customers.

Business Capability Maps

A business capability map or model includes all capabilities that an organization has. A business capability map provides different levels of detail, with a one-to-many mapping from the highest to the lowest level of the map. While the higher level is more generic, the lower levels are often more specific to the company. For example, take the capability “Marketing”. On a level below, there would be capabilities such as “Market Research”, “Content Production”, or “Campaign Management”. Below “Market Research” again, there would be capabilities such as “Market Identification” or “Consumer Segmentation”. The below picture shows the relationship within a business capability map.

IT Merger Integration or Microservices Architecture?

A typical capability map has not more than 3 levels of detail, but the number of levels depends on the particular use case. For instance, capabilities applied in the context of an IT merger need to span across the whole company and therefore require rather high-level capability maps.

In contrast, the management of a microservices landscape typically spans across the scope of a program and needs to be much more detailed to satisfy the requirements of the software development teams to structure their microservices architecture.

Both use cases cannot be satisfied with the same level of business capabilities, but it might and should be possible to include the capability maps required for both use cases within the same business capability map model.

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