Capability Planning and Analysis
A business capability is the power or ability to perform something of value to your enterprise. A capability defines what your enterprise is capable of doing, without stating or limiting how it is done.
By way of contrast, a business process, when decomposed into elementary processes and flows, describes what happens in response to a business event. So it explains how the process is carried out to a fair level of detail. A business process could make use of several business capabilities to achieve the required outcome.
For example, a fulfillment process would require the services of several logistics capabilities. A logistics capability may decompose into capabilities supporting storage, scheduling, transportation, etc, which are used by the steps in the fulfillment process. These required capabilities can be identified without determining specifically how they are done.
At the same time, a coarse-grained business capability might itself be implemented by business processes: each high level function of the capability could be realized by a process, which in turn uses several smaller-grained business capabilities. The concept therefore can be viewed as recursive.
Confused? As well you might be. In fact assessments of numerous capability analyses show a high level of variability in the way capabilities are identified and defined, which may mean the purpose of the exercise has been compromised right at the outset. So a consistent approach in capability identification is essential.
Characteristics of a Business Capability
As shown below, a key characteristic of a business capability is that it should be enduring, and should outlive the business processes or the way it is realized at any moment. While the consuming business processes and the providing realization of the capability come and go, or get reengineered, the capability is likely to remain remarkably constant. For example, a company will always have the capability to “sell goods or services”. How they are sold – by sales people or ecommerce – or where sales fits into the end-to-end business processes, or what the process of selling involves, or how the company is organized to perform selling, will constantly evolve. But as long as that company stays in business you would assume it will always possess the capability to “sell goods or services”.
There is no reason why CP&A should be applied only to the business capabilities. It could be applied to any domain, either business or technical. In CBDI-SAE we have for example applied the concepts to SOA adoption.
In this report we provide a structured approach to identifying, analyzing and managing the full lifecycle of a capability in an integrated way across the business and IT domains. We are interested in its place in the business model, plus how and where it is implemented, and how well that implementation is performing. We are not divorcing capability from realization and only dealing with the abstract. This is not meant to be a theoretical exercise!
- Enduring: A capability should outlive changes to how it is realized or the business processes that use it
- Process Independent: The same business capability may be useful within several business processes
- Realization (Implementation) Independent: The capability definition should be independent of how, where or by whom the capability is realized
- The capability definition (stating the distinct actions it offers) does not pre-empt how each action gets carried out internally
- The capability’s internal processes could be changed while still conforming to the capability definition.
- Dependency: A capability may depend upon another, in the sense it:
- needs some other capability to have been exercised first (temporal dependency)
- it utilizes some finer-grained capability when performing one of its actions (internal dependency)
- Some capabilities can be independent or self-contained
- Measurable: A capability’s performance must be measurable
What is Capability Planning and Analysis?
A capability plan & analysis provides a structured report on current and planned capabilities. For example the capabilities required to provide a logistics service.
As well as providing an understanding of the capabilities an organization requires or already possesses, a key purpose of CP&A is to drive decision making.
The capability analysis is usually produced from a combination of
- a modeling exercise to identify the set of capabilities and their dependencies
- together with a data gathering exercise to establish some level of evidence based assessment on the performance or suitability of the current state of a capability usually in terms of its current realization, and to gather input on the planned state based on the outcomes the organization is trying to achieve.
The analysis can use metrics to highlight areas of weakness in the realization of current capabilities, prioritize their improvement or determine the need for the provision of new capabilities, and allow comparison between capabilities as well as between peer or benchmark organization units where data is available, as well as with current and planned state.
A common use of CP&A is to support the identification of common capabilities that should be shared across an organization, and drive the rationalization of the resources used to realize those capabilities, looking for duplication, inconsistency or gaps.
Capabilities can be analyzed and understood in several dimensions. This includes,
- Organizational: Ownership and responsibilities
- Realization: How the capability is realized (implemented)
- Service: How the capability is provided as a service (physical or software)
- Process: Which processes use the capability or which processes the capability contains
- Dependency: An understanding of the relationships between capabilities
- Commonality: of the realizations
- Value: of the capability to the business
- Metrics: measures of the capabilities performance, etc
Each of these dimensions can be considered on an as-is or to-be basis.
Continued in PDF
Document Download: Capability Planning and Analysis
The Capability concept is widely accepted as a useful technique to bridge the business perspective and the service architecture. But capability identification is frequently as far as it goes. Our experience is that capability can provide a really powerful mechanism to justify, drive and govern service delivery and provide integrated business and IT planning and management. This report outlines a structured approach to the analysis and planning of business and IT capabilities.
File Size: 753KB
Published: 26 Jun 2012 06:59