In our previous blog, we outlined the relationship between business strategy and capabilities at a high level. But we have not given you any guidance yet as to how to create a good overview of your capabilities. In this blog we look at why identifying capabilities is important for organizations, how they can be defined, how to classify them, and how to include them in a capability map.
Capabilities define what an organization needs to be able to do, in order to successfully achieve the outcomes that are defined as part of the corporate strategy. They are the key building blocks of the business, unique and independent from each other, and tend to be stable over time.
To help you define business capabilities, the following guidelines may be helpful:
A Capability map is a map of the enterprise that visualizes its capabilities in a particular state, for example current capabilities and their current maturity level, or required capabilities in a future state. Each key capability can be made more specific by decomposition. From a top down perspective, capabilities are derived from the strategic direction of the organization. From a bottom up perspective, components and assets (e.g. applications) can be linked to the capabilities they support, providing an indirect link of these components and assets with strategic direction. In this way, capabilities can be used as a starting point for the definition of asset portfolios.
Capabilities can also be classified further, for example in:
Such a classification scheme helps in investment and sourcing decisions:
Coming back to our example from the previous blog, we take a look at the Capability map of ArchiSurance (Figure 1). The first thing you’ll notice is that all of the capabilities in this capability map are named as nouns (e.g.: “Product management”). Furthermore, there are seven main capabilities (e.g. “Claim management”, “Asset management”, etc.), which have been further decomposed into more specific capabilities (e.g. “Claim settlement”, “Contract administration”, etc.). Furthermore, their capability map is stratified into Strategic, Operational, and Supporting capabilities.
The capability map is an essential component which can be used by organizations to perform high-level performance assessments. We will address capability analysis, using heatmaps and spider charts, and other topics such as capability realization in our upcoming blogs. Stay tuned for more!
Next blog post: ArchiMate® 3.0 – Capability Analysis