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Business Capability Heatmaps

Capability heat maps - Simple capability assessment

What is a Business Capability Heatmap?

Business Capability Heatmaps are a substantial artifact to create compelling and colorful views, which can be a valuable artifact in highlighting and showcasing essential considerations regarding business capabilities and context to senior management.  At a foundational level, a business capability heat map is a two-dimensional chart with X and Y axis and the intersection of the rows and columns populating a score. Sometimes, one may use three or four dimensions – for example, a bubble chart, which may include the traditional X and Y axis and then the size of the bubble to indicate a volumetric dimension and color to indicate state or status. 

How are Heat Maps relevant in the Business Architecture Realm?

If you are a business architect, business analyst or enterprise architect, it will behoove you well to create and present business capability heatmaps. And most business architects do develop several heat maps. 

The business architecture heatmaps include juxtaposing various information entities and assets against each other to analyze coverage, footprint, impact, and metrics. 

But, what is a Heatmap?

So, first things first. Cormac Kinney coins the term heat map in the institutional securities trading context.

Wikipedia defines a heat map (or heatmap) as a graphical representation of data where the individual values contained in a matrix are represented as colors. Fractal maps and tree maps both often use a similar system of color-coding to describe the values taken by a variable in a hierarchy.

What are Business Capability Heatmaps?

First, to be sure, let’s agree on the definition of what is a business capability. Capabilities are “What” a business does. And business capability heatmaps are where one uses business capabilities, which are decomposed into a granular level of detail to capture the essence of what business does, and juxtapose them with various assessment parameters and generates a visual artifact that shows a range of values, often represented in different colors. There is a conceptual/theoretical paper for those of you who are academically inclined.

Is there a List of Business Capabilities Heatmaps?

The sky is the limit regarding what types of business capabilities heat maps one can generate. The following are but a few examples. 

Capability Assessment heat map:

One can assess capabilities in multiple dimensions, such as strategic importance, maturity, technology enablement, resource adequacy et al.

Capability heat maps - Simple capability assessment

 Example Capability Heat Map: Capabilities to Strategy Mapping

Most companies struggle with aligning execution with strategy and capabilities are a great way to bridge the strategy-execution gap.  

Capability Heatmaps - Capability to Strategy Mapping

Capability-based Vendor Evaluation Heatmaps:

When you are considering a system implementation (buy or build; replacement or initial), you can take the capabilities you need in a system, decomposed to a lower level of granularity, and the vendors you are considering to create a heat map. The evaluation parameters can be functionality, usability, deployment options, etc. and rate the vendors on a scale to create a Vendor evaluation heat map.

Capability-based Vendor Evaluation Sample Heatmap:

Capability Heat maps - Capability-based Vendor Analysis

Capability-based Merger Analysis Heat Map: A heat map that shows the state-of-the-state of various capabilities between the acquiring firm and the target acquisition.analysis

First, both organizations should have a detailed business capabilities maps as well as conduct an assessment of not only the capability maturity, importance, and related factors but also assess the underlying processes and systems/applications. 

Once the individual capability and related entity evaluation are complete, then comes the next step of relative scoring of the capabilities and underlying processes and applications.  

So, for example, in the case of CRM, it is possible both companies CRM capabilities may have ranked relatively close. However, if one of the CRM systems is architecturally superior to the other – a multi-cloud SAAS CRM (Software as a Service Customer Relationship Management) platform – it could tip the scales in favor of the more advanced platform. 

As another example, the target state of a particular capability may determine which capability and related assets to choose based on their capacity to evolve and meet the future needs. 

A capability-based analysis and heat maps are useful in pre-merger target analysis as well as post-merger integration and capacity rationalization. 

Capability-based Impact Assessment and Prioritization Heatmaps: If you triangulate the state-of-the-state of business capabilities and the projects that are on the anvil, and score them on their ability to bridge the gaps and evolve the capabilities, it will align your spend with your priorities.

capability heat maps - interdependency heat map

Capabilities to Applications/IT Services Heatmaps: Capabilities are an abstraction and are realized by capabilities, data, and applications/systems. A heat map that relates the capabilities to various applications/systems will help in analyzing the footprint, fragmentation, and overlaps.

To create this heat map, you will need an inventory of business capabilities and an outline of the underlying functionality.  Then you will need a list of SOA Services or Applications or Microservices (or a combination thereof if you have a hybrid IT landscape) and the functionality they support.  

Once you have both sets of information, juxtapose capabilities in rows and the Services/Applications in columns and juxtapose the functional footprint. You may use terms such as “Substantial” “Moderate” “Partial” “Negligible” to indicate the level of support of each service/application to capabilities. 

How to build Heatmaps?

Creating comprehensive heat maps is outside the scope of this article, but here are some excellent resources for building heat maps. 

  • CUNY has detailed tutorials on heat maps in Excel
  • Lynda.com offers a tutorial. (Note: It may involve registration)
  • Chandoo.org provides a free tutorial.

 

When should I create a Business Capability Heatmaps?

Some business capability heat maps are triggered based on a specific circumstance – such as an M&A event or a vendor evaluation. Many other heat maps could be periodic, preferably annual, so that there is continuity, and allows the user to generate a sequential year-over-year analysis.

How do I build Business Capability Heatmaps?

First, we assume that you have a well-conceived and validated capability model. Depending on the type of heat maps you want to generate, compile a list of categories, parameters, and scoring values. Assign different colors to represent the scoring values. Then it is actual scoring – whether it is scored once using a Delphi method and arriving at a consensus, or multiple evaluators scoring the same capabilities and coming up with an equal or weighted average – to generate the heatmaps.

Who is the audience for Business Capability Heatmaps?

Probably, one should ask this question first, and the business capability heat maps should be tailored to the said audience. The executive audience will be interested in summary overviews, aggregate scoring values, top ten and bottom ten type representations. The operating level folks – business architects, enterprise architects, solution architects, IT managers, Product Owners – would like the details, such as the interrelationships, individual scoring, and ability to conduct what-if analysis.

How does Capstera help with Business Capability Heatmaps?

Capstera offers a spreadsheet type interface called Lenses. Registered users can leverage existing capability models, and pre-generated templates to create business capability heat maps. And of course, a user can create new lenses. The users can define or customize categories, parameters, scoring values, and display methods. Last but not least, these can be exported to Excel for further analysis.

Write to Support at Capstera dot com to request a free business capability heatmap template.

 

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