HOW BUSINESS CAPABILITY MODELLING HELPS WITH STRATEGY AND EXECUTION?

Business Capability Model is a model that represents an organization’s distinct and
differentiated business capabilities, independent of the organization’s structure, systems,
processes, people or domains.

Organizations are leveraging business capability modeling as a way to express and explore
“what we do,” so they can make decisions about “how we do it.” Leveraging
business capability modeling should be done in close cooperation and collaboration
with business leaders,and ideally be driven by the business units, rather than IT.

According to Betsy Burton at Gartner Business capability should always

1. Start by articulating business strategy and targeted business outcome.
2. Focus on Future-State Business Capabilities First and Foremost

The organization makes a mistake and start building the capability model with their
currentstate. You should not take this approach as it will always create frustration, bottlenecks,
and results in failure.Define the future state and then compare with your
current state to ascertain the gap.

In this Part 1 of the series by taking an example we will look into few of the activities and
see How Business Relationship Management can help with Business Capability Modelling?

future state business capability modeling

future state business capability modeling

 

 

 

 

 

Figure 1:  Example of Future State Business Capability Model – Source Betsy Burton @ Gartner

Once you have identified your Future Business state capability you then need to work
on what to do differently. By this way, you can define what objectives are to be
achieved, prioritized and measured
1. Gap Analysis of Future Business Capabilities Versus Current State Business Capabilities

In this analysis, we will be able to identify the gap in our capability and look into where significant changes are required to meet the business needs. We will also be able to
identify newly required capabilitiesand capabilities that are no longer required. This exercise
will help prioritize your investment and Portfolio Strategy

Current State Gap Analysis comparing with Future State Model

Capabilities Gap Assessment

Business

People

Process

Information

Technology

Priority

Contextualized Interactions

3

3

2

2

2

Medium

Manage Customer Identify and Preferences

5

5

5

3

4

High

Model New Fraud

5

3

5

5

5

Medium

Offer corporate Tax Services

2

3

2

1

2

Low

1 — Capability exists and meets future-state business needs

2 — Capability exists and will need minor changes to meet future-state business needs

3 — Capability exists and will need significant changes to meet future-state business needs

4 — Capability exists but will not be needed for future-state business needs

5 — Capability does not exist but will be needed for future-state business needs

Strategic, Future-State Business Capabilities (Three Years) and Incremental Investments

Business Capability Model can be used as a strategic investment Planning tool. With an ability to comprehensively assess all key capabilities, organizations are better equipped to understand the impact of their investment decisions. Utilizing metrics like Importance vs. Performance, Cost-of-Ownership, and more, it’s easy to analyse business capabilities, record investment decisions, and generate investment programs specifically designed to transform core capabilities.

Capability Model

Figure 2: Business Capability Representation and the Investment Strategy – Source Betsy Burton @ Gartner

The Path to a Capability-Driven IT Organization -How Business Relationship Management can help with Business Capability Modelling?

A foundation for the success of BRM implementation is clarity. Clarity involves being as crystal clear as possible on why you are implementing the BRM organizational capability, what the BRM role entails, and the dynamics and interactions with business partners and provider partners.
The first step in getting to a successful implementation of the BRM role is to understand specifically what you are trying to achieve with the role. Some examples often heard in organizations include the following:
• Highest value return on investment, or as one organization put it, “highest and best use of resources for the company”
• Partnership, which often translates into having a ‘seat at the table’ with your business partners, with them trusting you as an advisor
• Coordinated, responsive supply – the orchestration of the supply side to meet the demand; this is not all up to the BRM but often the business looks to the BRM as a role to help facilitate here

 

brm organizational capability implementation

If you are interested in implementing Business Relationship Management or Business Capability Modelling at your organization, please reach out to us at info@taubsolutions.com

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