Editor’s Note:
Capabilities are fundamental to Business Architecture, making it essential to understand how to implement them effectively. To help you navigate Capability-Based Planning, we’ve created the ultimate eBook, packed with insights, strategies, and practical guidance to set you on the right path.. This blog post is an excerpt from the eBook, providing a glimpse into the valuable content you’ll find inside.
Today, we live in a rapidly changing world. Senior management is faced with various change initiatives to improve an enterprise’s different functions. Well-informed arguments back these change initiatives and compete for budgets. Although strategic management has access to vast information and tools to support strategic, tactical, and operational decision-making, they often lack a holistic view of budget allocation to track how investments create value for the enterprise.
Using a Business Capability Map as a framework for investment decisions and change designs has received increased traction over the last decade. With a ‘Business Capability Map,’ senior management can analyze an enterprise holistically, through a business perspective lens.
A Business Capability Map describes what the enterprise may be able to do, independent from how those things are done, by people, processes, technology, information, or physical resources. Senior management can now make more effective investment decisions while empowering enterprise and business architects to support them more efficiently.
In this blog post, we show how C-level and Business Leaders can make effective investment decisions by using Business Capability Maps. Additionally, we discuss how architects can increase the efficiency of future operating model designs and analyze business capability improvements.
Who are the primary enterprise stakeholders benefiting from a Business Capability Map? A stakeholder is an individual or organization that has substantive impact on the business of an enterprise and can be internal (for example an employee) or external (for example a customer or a partner). Stakeholders typically utilize capability maps for decision making while architects support them in this function. Therefore, the primary stakeholders for a Business Capability Map are C-level executive management and their direct reports, and senior business leadership with titles such as Vice President or Director. They sponsor the design and use of capability maps to improve the business.
However, many other individuals working “within” this framework (for example, strategists, business analysts, managers/ owners of the processes, technology, information, and resources) may also benefit from utilizing a Business Capability Map. Designing a holistic and sound capability map usually is the responsibility of enterprise and/ or business architects. Capability maps communicate in business terms what a company is capable of, regardless of how it is currently doing it.
Senior management’s top priority is making better decisions while ensuring that investment budgets are allocated effectively. Digital businesses today are becoming a source of competitive advantage. The ability to quickly steer the organization towards its strategic goals and adapt faster and more effectively to changes in this competitive landscape is becoming a critical success factor for enterprise leadership. A capability map provides executives with an enterprise-wide perspective of the impact of their investments and, most importantly, indicates which capabilities will be improved.
Indicating the capabilities that will be improved is crucial when assessing competing demands for investment budgets on a “level playing field,” independent of the specific details of each demand. In other words, it provides a way of comparing “apples with apples” when evaluating the benefits of multiple initiatives regarding which capabilities are improved and how much. This enables visibility and transparency of alignment with strategic priorities, ensuring there aren’t gaps in the investment portfolio where key capabilities aren’t addressed.
A Business Capability Map also helps senior management determine whether their investments are moving in a strategic direction. This is done by assessing business capabilities for strategic relevance. For example, see the map below, which shows how Bizzdesign supports customers in making effective investment decisions by connecting business capabilities with strategic relevance. The map shows in which areas there is a gap between planned investments and the enterprise’s strategic direction.
While Business Capability Maps allow stakeholders to make effective decisions, the next step is to realize the change. A capability touches many aspects in an enterprise and typically includes people, processes, technology, information, and physical resources. How can senior management ensure that everyone and everything operates in the context of a business capability? Additionally, analyzing the ‘as-is’ state and designing the future operation model of a capability is often complex.
ArchiMate and other standards provide a common language that helps architects and business analysts address complexity and improve the efficiency of analysis and future design. ArchiMate provides high-level overviews for heat mapping and detailed designs of processes, applications, technology, data, and security architectures.
Feedback from customers indicates that by utilizing ArchiMate, they were able to decrease the time it takes to create and analyze future designs by 20-30%. However, it’s more than just drawing a diagram. When a common language is used, communication and collaboration between stakeholders improve when designing the future of the enterprise. The view below shows an example of a target operating model design. It highlights the changes in green.
Another important benefit, apart from enabling assessment of the strategic relevance of capabilities, is that Business Capability Maps enable stakeholders to assess and track the maturity of capabilities. A map provides insights on where senior management needs to improve the capabilities of their enterprise. However, can they measure the maturity of current and future business capabilities?
The diagram below indicates how senior management can use spider charts to visualize a capability assessment. Six dimensions are defined for the “Claim management” capability, and it shows how the process dimension is broken down into more details. The baseline analysis for this capability results in values for the different dimensions linked using the red line. The required maturity, broken down into values for the individual dimensions, is indicated with a green line.
If you want to learn more about how Business Capability Maps support the strategic change an enterprise requires, please contact us.
Chief Strategy Officer at Bizzdesign
Nick is responsible for value proposition development, building strategic partnerships, and driving innovation topics, including executing Bizzdesign’s ‘buy & build’ acquisition strategy. He has over 25 years of experience in B2B enterprise software and SaaS, dedicating 15 years to enterprise architecture and portfolio management.
Bernd Ihnen
Managing Consultant at Bizzdesign
Bernd has held various roles during career, including consultant, trainer, and global solutions manager. His expertise includes Business Architecture, Enterprise Architecture, Portfolio Management, and Business Intelligence, where he has guided customers in maximizing value from Bizzdesign Horizzon predominantly in finance and manufacturing sectors in DACH and EMEA region.
