Definition

business capability

Contributor(s): James Denman

Business capability is the expression or the articulation of the capacity, materials and expertise an organization needs in order to perform core functions. Enterprise architects use business capabilities to illustrate the over-arching needs of the business in order to better strategize IT solutions that meet those business needs. 

Systems architects will frequently begin by making a business capability map that takes stock of all the essential functions of an enterprise. Business capability mapping is a useful tool for documenting the relationships between a businesses' core function and software applications, computing systems and components in the enterprise architecture. The goal of capability mapping is not only to align technology with business, but to discover waste and streamline operations.

Business capabilities are sometimes confused with other concepts in business process management such as business processes and business functions. Business processes describe the methods an organization employs in order to provide and leverage business capabilities. Business functions describes the roles that individuals and units within the business play in regards to meeting business objectives.

While functions and roles tend to change rapidly as new employees enter the business, business capabilities remain relatively stable. High-level business capabilities include concepts such as sales and supply chain management that can be met by a number of various business processes, which in turn can incorporate a variety of business roles. Business capabilities can also be broken down into more granular levels. Supply chain management, for example, could be split into product flow, information flow, and finances flow.

This was last updated in November 2011

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Hi Margaret, thanks a lot for providing this content on business capabilities! I totally agree with you that business capabilities are quite suited to help companies better with a couple of use cases than processes could. 

For instance, business capabilities help to improve business-IT alignment by supporting IT´ understanding of the business requirements and demands. On the business side, the connection to the underlying applications, data, or components are better understood. 

Further, they help with strategy-operations alignment by breaking down strategies so that people that do the actual work can understand what the strategy implicates for their daily work! 

Also, business capabilities are often used for inter-company alignments, especially in mergers and acquisitions, as they provide a common framework for discussions that is understood by both organizations. 

Since a couple of years, I am dealing more and more with different organizations applying business capabilities for their use cases and I have experienced quite different situations and outcomes. If you are interested, you may take a look at what my experience with business capabilities is:
 https://www.digitalroadmap.management/blog/tag/Business+Capabilities
 I am always happy to get to know new views on the topic!
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