Business capabilities define “what” an organization does – or intends to do. In general terms, a capability is the ability or wherewithal to achieve a specific purpose or outcome. Capabilities are what businesses need to create value for their customers.
For example, many organizations need to “Make Products”, “Sell Products” and “Service Customers.” These can be thought of as high-level capabilities, which can then be broken down into more fine-grained capabilities.
Capabilities support business goals or may be impacted by them. They are a key means of describing what the organization needs to do to deliver its strategy and achieve business goals. They are also a key means of describing the organization’s business model – i.e. what is does for its customers, and the associated key activities, revenues and costs.
Capabilities are independent of organization units, and tend to be stable over time. They are operated by business processes, as part of a business operating model also comprising people, technology and data, in support of value streams that create value for customers and the organization.
In fact, capabilities are the only concept that connects business strategy, business models and operating models:
The key challenge to organizations and their management is the optimal allocation of scarce resources.
The Capability Lens is the enabler of the optimal allocation of an enterprise’s scarce resources to achieve its strategic goals, through a capability-based planning approach connecting strategy with business and operating models. This enables a consistent and coherent method of analyzing capability gaps, as well as the investments required to close those gaps.
According to research firm Gartner, managing the lifecycle of business capabilities is the single most valuable thing senior management can do for their organization.
As organizations face ever-increasing pressure to digitally transform and create greater resilience and adaptability for themselves, the Capability Lens is critical to cut through the complexity and create business-led transparency and line-of-sight for all transformation stakeholders, connecting Change Leaders (the senior executives accountable for achieving business goals) and Change Experts (the experts designing and delivering business and operating model innovation and transformation).
The Capability Lens is the business “Rosetta stone” that provides a common language for business and technology stakeholders to discuss and prioritize the investments needed to advance strategy, optimize operations and manage risks in the pursuit of business goals.
It provides the framework for an “apples to apples” comparison and evaluation of competing demands for funds and resources, enabling fact-based decisions from an enterprise-wide business perspective. It provides the means for relating new and innovative technologies with the business outcomes they enable, and the dependencies for exploiting them and into scalable business and operating models.
Learn more about how Bizzdesign’s solutions can enable your organization to unleash its full potential using the Capability Lens.