Business Capability Modeling: Explaining “What” Your Business Can Do

9 Mar 2023

by Ian Stendera

Business capability modeling (BCM) helps a business understand and showcase its possibilities. These capability models help companies understand and evaluate themselves and, more importantly, connect the strategic “what” a business can do with the more tactical “how” it’s done. Connecting this information to strategic goals allows organizations to identify what kind of groundwork needs to be done to ensure a successful outcome in various organizational change projects. This ranges from procurement of a new system to department restructuring after acquiring or merging with another company.

Should Organizations Always Start With Business Capability Modeling?

There are no hard and fast rules about having to start digital enterprise management or a transformation project with business capabilities. It varies greatly depending on the need of a given organization and where the critical data lives.

However, business capability modeling can be a great starting point for getting a common framework to analyze performance across the business and IT. Modeling the business’ capabilities can quickly bring the following benefits: 

  1. An achievable, understandable asset that can be utilized across the entire business. 
  2. A bridge that connects strategy and IT architecture, becoming an intuitive common language for both.
  3. Data-driven insights into many different areas across the organization.
  4. A means of evaluating the business, such as measuring the success of change projects or analyzing performance.

For a quick, expert-guided approach to modeling business capabilities, read our 6 Best Practices for Defining Your Business Capabilities.

business capabilities

Start Small, Drive Better Decisions Sooner

A common pitfall with business capability modeling is teams getting stuck arguing over the nuance of what a capability is. Another pitfall is getting too involved in developing a complete model. The beauty of a business capability model is that it does not need to be fully defined or complete to start adding value.

A good reference model and the motivation for progress mean that capabilities can provide a quick win from the get-go for building an understandable vocabulary of what an organization does.

It is still important for architecture or digital change project teams to begin the process with some foundational discussions over what is valued as core to the business and how the business differentiates itself from competitors. Putting these things “down on paper” helps make the unspoken parts of the process clearer and more actionable, improving alignment across the enterprise.

Bridging Strategy with IT

Bringing the strategy out of the boardroom and connecting it to the business’ architecture is no easy feat. Too often, this is left to the Enterprise Architects or change-makers mediating between the business and IT, leading to solutions sometimes being lost in translation.

Business capability models address this communication issue by becoming the common language between business and IT, building alignment across the organization. This improves the translation and operationalization of strategy, a critical factor to successfully achieve enterprise-wide goals. By drilling up to the capabilities different domain experts support, models help the team see how they are or should be positioned to deliver on a given strategy.

hierarchical business capability model ardoq
Example: A Hierarchical Business Capability Model

Building on a Business Capability Model

Capabilities can be the evaluation point of how well the business is currently doing in a given area. By connecting the capability model to other parts of the technological infrastructure, more insight can be unlocked for the organization.

By adding the technology or applications that realize capabilities, a business can identify:

  • Cost savings through redundant or duplicate systems
  • Risks where it is dependent on underperforming tech
  • Opportunities where the right investment can increase the enterprise’s ability to differentiate in the market

An organization’s people can be an interesting way to evaluate a business when connecting them to capabilities. People can provide insights into expert networks, bottlenecks, or single points of failure. Including them in the architecture can also be useful in many other ways.

Including people in an application portfolio management initiative, for example, can provide insights into responsibility and expert networks. It can also set the foundation for a far more data-driven approach to collaboration. By connecting capabilities to people, a business can identify:

  • Domain expert networks critical to business
  • Insights into responsibility
  • Areas of risk and opportunity (e.g., if some core differentiating capabilities are dependent on contractors or consultants)

Building out your business capability model in nearly any direction will provide additional value and actionable insights into how a business model is being implemented. 

business capability model with people
Example: How Business Capability Models can be connected to people, application portfolios, and departments 

Business Capability Modeling Tools: Leverage the Power of People

It’s both valuable and important for people to be included in an Enterprise Architecture effort, yet many business capability modeling tools are not equipped to include them. Ardoq places specific importance on ensuring that the tooling is people-focused by: 

Including People-in-the-Graph

Having people in a graph-based, data-driven tool like Ardoq provides additional value to EA models. As mentioned above, it lends additional insight, such as who the domain experts are in an organization, who is responsible for a given application or system, and identifying areas of potential risk or opportunity.

Engaging People With Relevant Information at the Right Time

Mapping people into the graph means that Ardoq is able to identify the right people to notify for a given issue. This could be a crisis like a server outage or a technical error stopping a critical service. Having people included in the model means that it’s quick and easy to notify the correct individuals to mitigate and resolve issues. It is also possible to integrate this functionality with Slack or Gmail so that individuals can receive notifications on a platform they prefer.

One customer was able to use Ardoq to inform external hosting providers of exactly what their servers and applications were supporting, giving them better insight into the business impact of what they were responsible for. This improved their vendor relationship and reduced the number of avoidable outages like scheduled maintenance unintentionally impacting key banking services.

Keeping People Accountable To Drive Quality

It has long been a challenge to keep people engaged to ensure the documentation is kept updated. While integrations help reduce this workload, it has also been found that including ownership and visibility across domains also motivates people to maintain their information. These factors help to create a new level of awareness of how people depend on each other. Understanding that others depend on you to maintain documentation encourages a culture of ownership and quality in documentation.

Business Capability Modeling Best Practices: Where to Begin

If you’re beginning with an Enterprise Architecture framework, remember to model what is most important and relevant to the enterprise’s key challenges or objectives. Keeping sight of the business drivers motivating these Enterprise Architecture efforts will prevent scope creep from derailing them.

To help companies get a head start on the modeling process, Ardoq comes with out-of-the-box industry-specific reference models. These models are great accelerators for a BCM initiative and can be readily adapted to the nuances of any organization. Data can be easily imported via Ardoq’s wide selection of APIs and integrations


Share Business Capability Models, Early and Often

Remember that building the business capability model is just the beginning. To uncover real value from it, it should be shared with peers, stakeholders, and managers. Only then does this visualization of the business and what it can do enable more meaningful discussions that drive better decisions.

Ardoq’s Presentations and Surveys allow organizations to begin sharing capability models, even as they are being developed, in a context that suits the recipient best. It is highly recommended to embed this model in the organizational intranet, Sharepoint, or Confluence pages, to bring awareness and transparency to the work being done. Exposing the model to more people in the company also means more opportunities for data collection or correction.

Surveys are an effective way to encourage users to contribute data without needing to understand the core Ardoq platform. They are quick and easy to use, ideal for gathering data from teams outside the architecture or IT function.

Broadcasts are another function that aids engagement and improves communication. It allows Ardoq administrators to send the right messages to the right people at the right time. Using Broadcasts to send out surveys is a fast and efficient way to collect and validate data, keeping it up to date. 

What Can or Should Be Done Next?

After following our business capability modeling best practices, look back to key business drivers and assess where the model would be best expanded on. If managing IT spend is a critical priority, Application Portfolio Management and Application Rationalization are logical next steps.

If an organization has just undergone a merger and acquisition, and needs an improved structure, adding people, departments, or business units to the model will aid this process. Organizations can align strategy with the project portfolio using our approach Strategic Planning and Execution, connecting the business strategy to how it impacts the architecture.

A New Level of Insight From Your Enterprise Architecture

Always remember to bring data to the business capability modeling exercise that is actionable. Look at how people are actually critical components of the architecture and use them to drive better processes for investment, innovation, and managing change.

Getting the business capability model out of static and isolated tools and into the greater organization will improve alignment and significantly increase the quality and level of insights.

Seeing Ardoq in action clearly shows how quickly you can get value out of your capability model. Reach out for a demo today.
New Call-to-action

More to Explore
Ian Stendera Ian Stendera Ian is Ardoq's VP of Product. A multi-talent, he’s worked at Ardoq since 2014 and has built several teams across the company.
Ardoq Insights & Events

Subscribe to Ardoq's Newsletter

A monthly digest of the latest news, articles, and resources.