An Introduction To Business Capability Analysis

When projects are launched, they are typically done to improve the performance and support the capabilities of the business. Business Capability Analysis involves modelling what a business does or what it needs to do to achieve its objectives and not how it achieves it (via process/people). The results of such an analysis can deliver value to the business in areas of reduced cost, improved customer service, increased turnaround time, to mention a few. Having a solid grasp of the capabilities of the business can help in maintaining competitive advantage and delivering on unique value propositions to customers.

Business Capability Analysis in simple terms, describes what the business is able to do. It can be done to assess performance, determine the risk areas of the business and prioritise investments, especially in terms of time, effort and money.

Having an understanding of the various capabilities that a business requires to succeed provides a platform for defining an effective business strategy. Conducting business capability analysis, an investigation into the capacity of an organisation to effectively implement a distinctive business activity, can complement business strategy definition. 

Business capabilities form the foundation upon which a business is built; capabilities thrive in an integrated system where people and processes are reinforced by the appropriate technology and information. Many organisations are however, still struggling to clearly define those strengths that may be considered capabilities.

Capabilities can be spotted in:

  • The building blocks of the business: What does the business exist to provide?
  • The functions of the business that are stable: Which aspect of the business never changes, regardless of how the processes surrounding it have changed over time? For example, the “sell” capability is a common function in most profit-oriented businesses. How a business sells may however, change over time.

For more information on the characteristics of capabilities, take a look at this article.

For a business analyst to effectively lay out a good business strategy, a business capability map should be defined.

A business capability map demonstrates how people, processes and functions are integrated to enhance the much-needed values that are championed by the organisation. More so, a well-structured capability map delivers the scope and context needed for business process improvement.

The capability map can also help in identifying where projects are required.

Although capability maps are structured to cover the entire business, they may be created specifically to address particular segments of the business. For instance, capability maps may be modelled to address issues in specific areas of the business such as: marketing, product development, delivery, support and services.

From an organisational standpoint, using analysts to conduct business capability analysis has many benefits:

  1. Providing the necessary structure for stakeholders such as the scope and context under which to effectively align organisational projects
  2. Identifying the most important aspects of the business. It can be used to highlight what is most important to the business and channel efforts in the right direction
  3. Improving core business processes that form part of the value chain.

Businesses that spend time identifying and developing their capabilities will be better positioned to enjoy the benefits of a strategy that focuses on improving their core outputs and services.

Picture Attribution: “Capabilities Word Means Proficiency Words And Potential” by Stuart Miles/