The basic idea of capability modelling is simple: structure the business of a company hierarchically by capabilities it needs to create customer value.
A business capability is defined as ‘a particular ability or capacity that a business may possess or exchange to achieve a specific purpose or outcome. Capabilities represent the basic building blocks, or DNA, of a business’. Capabilities define what, not how, a business does something’ [BIZBOK®].
Examples of Level 1 business capabilities are: sales, risk & compliance, payments
Why is it important to model business capabilities?
- Capabilities clarify terms and concepts across organizational borders.
- Capabilities provide a robust skeleton, a framework for assigning all the other elements of the enterprise architecture.
- Capabilities can be used as the central structure for heat mapping in order to answer questions such as: ‘Which strategic fields of actions do we see in which capability’; ‘In which capabilities are we planning to invest how much?‘; ‘Which capabilities are not supported enough by IT?’
- Assigning IT-applications to capabilities is a powerful way to support business & IT alignment.
In recent years, the idea of business capability modelling has emerged in the EA community. Much has been written about the idea of capability modelling, and it can even be said that we are facing a ‘capability hype’. You can find capability models for many industries on the internet. There are many industry-specific consortiums that try to model the business functions of that particular industry in the form of capabilities.
Example for Business Capabilities of a Bank (simplified)