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How to Build a Business Capability Map?

How to Build a Business Capability Map?

This article by Capstera focuses on basics of how to build a business capability map.

How to build a Business Capability Map?

Building a business capability map is a thorough, involved and an iterative exercise. As a business architect chartered with the task of creating a business capability map, there are a few initial questions to ponder and decisions to make:

  • If there were past efforts involving business capability modeling, what lessons can be learned to make the current attempt go smoother and offer better results?
  • Is there buy-in from senior business and technology leadership for building a business capability map?
  • Should we create a business capability map from scratch? Or should we buy a model from a business capability vendor?
  • Is the business capability map built as a part of a transformation program?
  • What are the desired outcomes from the business capability mapping exercise?

Let’s assume the path you’ve selected is to build the capability map from scratch. There are two options for crafting a business capability map from scratch:

  • Whiteboard Elicitation: A cross-functional team from business and technology disciplines may be assembled to brainstorm and create a model from scratch. While in theory, this looks fine, in reality, the exercise is fraught with wasted effort over an extended duration.
  • Straw model-based approach: A faster and practical approach to building a business capability map is to create a straw model. A capability straw model sample can be done by one or two individuals – with the understanding of business architecture and capability modeling, and innate knowledge of the business. The straw model can be an excellent starting point with a broader group for iterative refinement

How to build a business capability map? A business capability map is not just a list of boxes and arrows, but an integral and coherent set of items of what a business does.

Irrespective of the method, the following are the critical steps and best practices that are necessary to craft a viable and valuable business capability model.

Start with capturing the value chain of business. Michael Porter defines a value chain as a chain of activities that a firm operating in a specific industry performs to deliver a valuable product or service for the market. Establishing a value chain itself is an exercise in itself and will be addressed in a future insight. Suffice it to say that once you’ve defined your value chain, building a capability map can begin in earnest.

Michael Porter’s Generic Value Chain:

How to build a business capability map - value chain representation

An Example Value Chain:

Value chain sample - apparel retail and manufacturing

 

 

 

 

 

 

Decompose the Level 1 Capabilities into lower levels of granularity. The foundational elements of a value chain can be a logical starting point for a capability model. Often, the value chain blocks can become level 1 capability.

How to build a business capability map - Sample Level 2 Decomposition

  • Use nouns, as opposed to verbs, to denote capabilities. Take this best practice as a guideline, not a mandate.
  • Try to keep the capabilities mutually exclusive, collectively exhaustive, and individually a whole.
  • Ensure the granularity at each level, across the stacks, is maintained at a similar level. That is, at the same level, having one capability at a super high level and another in the weeds does not lend itself well to maintaining the structural integrity of the capability model.
  • At level 4, 5 and 6 of the business capability map, it is possible that capabilities will start looking like processes and activities. That is fine at lower levels of a capability model.
  • Once you have a robust model, keep iterating and refining the same. It is an evolutionary process, even though the results and benefits may be revolutionary.
  • A capability model is excellent, but without broader level details, it is nothing but a wall art. So please ensure that you capture the attributes of the capabilities to enrich the understanding of these crucial atomic building blocks of business. While one can go overboard with dozens of attributes and semantics, keeping it simple will save you a lot of time. You can always keep adding more attributes.
  • Try to do a sanity check of the model with a few contemporaries and in actual project situations. Make use of capability models as Lego blocks in the conceptualization, planning, and designing of various IT enablement efforts

Once you have taken the time to decompose each pillar to its logical level, you may end up with a Level 4 or 5 capabilities model.  Below is an example sliver of one of the HR capabilities decomposed further. 

Sample decomposition of a HR business capability

Remember building a business capability map is an odyssey. Another point to note is business capabilities provide a solid foundation and a common language for business-IT alignment, but not a panacea to solving all the issues afflicting the business/IT dynamic. 

No tutorial on how to build a business capability map can be complete without the following caveats:

  • A business capabilities model is a means to an end, not an end in itself.
  • Business capability maps are more than boxes and arrows.  Without proper use cases and actual demonstration of value, many will deem capability modeling endeavors to be academic and ivory tower deliverables.
  • Time to value is critical.  It is important not to waste a couple of years drafting the perfect capability model. Iterative refinement is the way to go. 
  • Eliciting capabilities from subject matter experts is not an easy task as it is difficult to abstract the underlying functionality into elemental building blocks. 

Do you need help on how to build a business capability map? If so, please contact Capstera business architecture consulting team

Capstera’s Customizable Capability Maps to Jump Start your Endeavors:

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