How to Know Your Business Capabilities and Use Them to Drive Change

7 Oct 2020

by Ardoq

Over the years, IT has evolved from being a company's support function to becoming core of the business. It makes sense considering that we live in a digital age where data (in all its many different forms) is traded and processed at breath-taking speeds.

So, if an organization is going to make full use of all the great IT tools at its disposal (i.e., hardware, software, and everything in between), it’ll need a strategy that can align its IT with the business side of things.

But, let’s not get ahead of ourselves. Before any strategy development can actually happen, you first need to map out your business capabilities. Mapping out your business capabilities will not only grant you an oversight of your present business, but it will also give you critical insight into how to proceed into the future. 

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Building Your Business With Your Business Capabilities

When you get past all the jargon, business capabilities are just simple expressions of what a company does and can do. It’s a great way of pin-pointing holes and redundancies within an organization, identifying pain points, and prioritizing where to focus resources.

By defining your business capabilities, you identify where your organization is and where it needs to be to ensure it can adapt to current trends and future changes. 

👁See how one of the world's largest media organizations became agile by using Ardoq to map their capabilities and more.

Define the What Without the How

Before you can set out and map your capabilities, you need to know what they are. So, you’re essentially asking, “what are the tasks that I need to do to keep my business going”?

For example, let’s say your company needs to know how much it would earn at the end of the month after tax. The capability is identified as “Monthly Net Revenue Management.” Here, the capability tells the what, not the how (e.g., which digital tools or systems to use) or the who (e.g. which team or department would be responsible for it).

Don’t worry; we’re not ignoring these details. They just come later on in the process.

It’s important to bear in mind that while your tools may change over time, your company’s objectives will almost always stay the same. So, by separating the what and the how you can enable any future transformation to be more streamlined.

Want to know this best way to do this? Check out the best-practice guide here:

Defining Business Capabilities: 6 Best Practices

Know Which Capability Is Which

Before you can start assigning business capabilities to everybody in the company, you still have to determine what function these capabilities will serve.

For example, you have a product/service, and your objective is to get this product/service from the drawing board to your customers. The business capabilities involved in that are your core capabilities.

But, there’s more to running a business than just making all your clients happy. The business has to run like a business and do all those things that businesses do, like manage its budget, attract and hire new talent, maintain relationships with other businesses, etc. None of these things directly affect the customer, so these are supporting capabilities.

On top of all that, you have your strategic capabilities. Meaning an organization’s ability to monitor and influence its position among its peers (in other words, it’s trying to stand-out and be the popular kid on the playground).

The point is that not all business capabilities aim to serve customers. Knowing which do will let the powers-that-be analyze how investing in these different capabilities will have different results for all concerned stakeholders.

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Setting the Foundation Through Your Business Capabilities

A business capability map is a lot like a jigsaw puzzle, with all the capabilities making up the pieces. With adequately defined capabilities, you can get an excellent overview of the picture you’re trying to build.

Remember:

🚀 Through digital transformation and increasing IT demands, business capabilities must align with IT at scale

🚀 Identifying necessary business capabilities will allow you to maintain focus on fundamental business goals

🚀 By dividing your business capabilities, you will gain oversight on different budgetary scenarios and their potential outcomes

 

Curious to see what mapping business capabilities with a collaborative and super flexible tool looks like?

Try Ardoq

 

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