How the Capability-based Planning process drives strategic change
Oct 5, 2022
Editor’s Note: Business Capabilities are a cornerstone of Business Architecture, and understanding how to implement them is key to success. To guide you through Capability-Based Planning, we’ve created an ultimate eBook, filled with expert insights, strategies, and practical advice to ensure you’re on the right track. This blog post is an excerpt from our eBook.
Architects are crucial in driving Capability-Based Change because they provide the strategic vision and technical expertise to align business objectives with operational execution. Through Capability-Based Planning, architects ensure that the organization’s core capabilities—encompassing people, processes, technology, and data—are optimized to support long-term strategic goals. By mapping current capabilities and identifying gaps, architects can prioritize investments and plan initiatives that address critical weaknesses while preparing the organization for future challenges. Their ability to guide capability-based change through future state architecture design helps ensure business transformations are structured, sustainable, and fully aligned with strategic outcomes. In this blog, we show you the planning stages for future state architectures.
Executing your organization’s strategy requires a wide set of business-as-usual processes to work sufficiently to deliver the strategic goals. Where those processes are insufficient, there is a gap—i.e., something needs to be done to raise performance.
Business capabilities are a great language for describing gaps since they’re stable over time, have definitions, and are enterprise-wide. Most importantly, they can map upwards to strategy and map downwards to people, processes, technology, and data, and their maturity can be evaluated by assessing these dimensions. We explain this process in detail in our eBook.
Having obtained a list of underperforming capabilities, the challenge is to decide which capabilities most need improvement. A scientific/objective approach is needed to quantify each capability so they can be ranked. We recommend the following:
With a set of capabilities quantified against your chosen dimensions, you now need to decide where to allocate budget and people. Break this complicated decision into two stages:
Filter your capabilities to consider only the ones worth investing in – which you can do by only considering ‘strategically important’ capabilities that have a maturity below a certain threshold. However, don’t ignore that you’ll need enabling capabilities that aren’t strategic but are nonetheless critical for supporting your strategic capabilities.
Generate a metric for ranking the capabilities.
The Investment Allocation step results in a list of the capabilities that receive investment. The aim is to determine what changes will be made to improve these capabilities. This means that two aspects need to be considered:
Mapping the capabilities of their people, process, technology, and data components to show the tangible impacts.
Creating different scenarios for the changes, e.g., one option could see people significantly changing work practices but keeping the technology the same.
Decision-makers can then review these To-Be options and decide which is best for the organization. The significant advantage of using capabilities is that changes to related parts of the organization can be considered together and aren’t viewed in isolation.
Below is an example of a target operating model where a capability is broken down into processes, applications, and data. In this case, the people dimension is left out because it is quite simple: a single team performs all the payment processes. In other cases, this may be more complicated, involving different roles and the requisite skills, etc.
Once the future state models have been decided, creating a work package to implement each To-Be model is easy. However, the risk is that a complicated network of dependencies is created and that a large number of overlapping work packages compete for the same resources (e.g., subject matter experts, IT operations staff). This increases the complexity and risk of your deliveries and raises costs and time to market.
To mitigate this, you can restructure your work packages to align with one or more business capabilities. This allows you to focus on changing only specific parts of the organization and minimizing the impacts on key resources. It also doesn’t matter if you’re using agile or waterfall methodologies because alignment to business capabilities improves the efficiency and effectiveness of your transformation.
The initiatives provide the means for delivering the capability improvements, and these two dimensions can be laid out against time on a roadmap. The roadmap below shows how the capabilities identified in the Gap Analysis and selected in Investment Allocation are then improved over time by work packages implementing capability increments.
ALSO READ: “Modeling Capability Increments and Capability Instances to Support Roadmapping”
Capability-Based planning timeline
Using business capabilities to do planning may seem daunting at first, but it gives you a common language across your organization – a language that remains the same year after year. You can use this language with all your stakeholders, from executives to implementers, and describe the end-to-end process from strategy to execution. Moreover, this analysis is already happening to some degree in every enterprise. So, it’s a case of introducing capabilities to simplify the process and make it more effective.
Try the process described in this blog, and let us know if you need any help. Good luck with getting tighter control over your transformation!
Pre-Sales Consultant at Bizzdesign
Sven has experience in Enterprise Architecture, Business Process Modellng and other business engineering disciplines. He has worked with various international organizations on use cases including Capability-based Planning, Risk and Security, and IT architecture in various projects. He has extensive knowledge on structured methods and tools, including ArchiMate, BPMN, TOGAF etc.
Customer Success Consultant
Jeeps has 25 years of experience in defining and delivering strategic and operational change. He is a senior enterprise-wide business architect who has specialized in data and digital transformation and knows how to harness value across business, operations and technology.
