Business Capabilities and Business Strategy

Part of the business architecture work that I'm doing is to get business goals and objectives. Business goals are the directions that the enterprise leadership mark to be achieved. Business goals set direction and they are usually high level and without any time dimension. Business objectives are much more specific, they are accurate,  measurable, has time limitation  and realistic . Each business goal has several objectives to support it. So, my first task is to collect business goals and objectives and map relations between them.

When I'm done with Objectives, I'm starting to collect business capabilities, or what the business is doing in order to achieve business objectives. Usually I tend to collect all the capabilities and then to ask the business to relate capabilities to business objectives, or in other worlds to set which capabilities needed to support each one of the objectives. I'm doing this process to identify capabilities that are not related to any business objectives. Such capabilities, as far as I concern, should be retired. If a capability should retire all of IT assets, which support it, can be retire or reuse for other capability.

Whether I collect capabilities and map them to objectives or collect capabilities by objectives (ask which capabilities support given objectives) , In the end of this process I have an hierarchy of current goals, objectives and capabilities. Next task is to  map between capabilities and IT assets that support them.

[AS-IS architecture]

This process helps to create the business "as-is", the question is how to create  "to-be" architecture. Mapping the "to-be" business architecture also starts from business goals. This time I'm looking for new business goals that depict new business strategy. For example if the enterprise leadership decided to penetrate new markets, I would expect to see a new goal "Expanding into new markets". Each new goal has objectives to support it (for example “Trading Gas until mid 2011“ or “Operating another country energy market by the end of 2011“). Part of the objectives are new,  and part of them are existing ones. Sometimes the "to-be" business strategy can only described by new objectives to serve existing goals.

[TO-BE Architecture]

Having the new goals and existing and new business objectives, I'm starting to find out if existing capabilities can be mapped to new objectives. As can be seen in the following figure, I'm using colors to define between new and existing capabilities. Any existing capability that support new objective, needed to be reviewed and validate that it can support the new objectives, be provided by existing role that perform it, etc'. Any new capability should be analyzed to define it non-functional attributes, which role should perform it, etc'. All of the goals, objectives and capabilities (existing and new), are the business "to-be" architecture (it goes without saying that I might add new roles, units, locations and any other business definition). The list of new goals, objectives and capabilities, as well as existing objectives and capabilities that support new goals or objectives are actually the gap between the as-is and the to-be business architecture.

[GAP]

Based on the collected data, I can compose a list of existing capabilities that support new objectives as well as new capabilities and start to work on it. Usually I'll make sure that IT assets that related to existing capabilities can keep on working in the same SLA, after they need to support new objectives. Secondly I'll look at the list of the new capabilities and try to figure out if existing IT assets can support them (and what is the impact on existing IT assets), or if new IT assets needed to be acquire or developed.

I hope that you manage to see how using business capabilities I can create new business architecture and then use capabilities to figure out what exactly are the impact of new Business architecture on the business as well as on IT.