As for a business capability map or capability model, it is the complete and stable set of business capabilities of an organization. A business capability model provides the visual depiction (or blueprint) of all the business capabilities that are or could be used by an organization[ii]. For example, Figure 1 above shows the typical level 1 business capabilities in the financial services industry[iii]. Each one of these level 1 business capabilities can be decomposed into several levels deep, logically grouped into different tiers to enable analysis and planning.

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In Figure 1, level 1 business capabilities are categorized into 8 functional tiers. In a TOGAF® business architecture certification course, it is recommended that you stratify level 1 business capabilities into 3 tiers: 1- strategic, 2- core, and 3- supporting. In my experience, most business stakeholders are more comfortable grouping their level 1 capabilities by function. The number of functional tiers can vary a lot from one organization to another.

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It should also be noted that seven of the eight tiers in Figure 1 are almost identical from one industry to another. These seven common functional tiers are 1- client-driven, 2- marketing and sales, 3- strategy, 4- human resources, 5- finance and accounting, 6- enterprise support, and 7- governance and compliance. The level 1 capabilities grouped under the financial services tier are unique to the banking and financial services industry. It goes without saying that every client who has used and examined this framework made adjustments to reflect the reality of their own organization.  In the financial services industry, other capability frameworks are available, including the Banking Industry Architecture Network (BIAN) business capability map[iv]. Capability frameworks also exist for other industries[v].

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Why Focus on Capabilities?

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There are four good reasons to use business capabilities, as explained here:

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1. Capabilities are more stable in time than org charts, processes, products, or applications. Business units will usually perform several capabilities. Business units are not as stable as capabilities over time. Why not processes? Processes change often over time and from one business unit to another.

2. Priorities are set more quickly focusing on the most profitable initiatives first.

3. Capability-based agile project planning is more accurate, less risky, and takes less time. Agile requirements, epics, and user stories are described much more accurately starting from a detailed capability-based roadmap.

4. Capabilities allow an organization to sort through and make sense of its supporting applications/systems.

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How to Build a Capability Map?

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A business capability model corresponds to a complete and stable set of business capabilities. The modeling methodology of a grounded capability map should typically include a top-down and bottom-up approach from business design to agile solution delivery and execution.

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To begin with, a capability model may include only level 1, 2, and possibly level 3 business capabilities organized in several tiers. To accelerate the process, many organizations will avoid beginning with a blank page and start instead with an industry-based framework that will then be modified initially by the business and enterprise architecture team to reflect the reality and vocabulary of the organization. Once the architecture team is comfortable with the preliminary capability model, validation and approval in a top-down approach by business stakeholders, usually business managers, needs to occur.

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The decomposition of the top-level business capability into lower levels can occur later in a bottom-up approach, especially if the business process documentation is either absent or outdated. Trying to find and validate all lower-level capabilities is a waste of time. Lower-level business capabilities can be discovered instead while finding the enabling business capabilities of value streams like the ones mentioned in Figure 2 below. Value streams or customer journeys are excellent approaches to identifying problematic enabling capabilities (high priority and low-performance capabilities, for example), as explained in this book. Furthermore, value streams are also used extensively in many agile delivery approaches, including the Scaled Agile Framework® (SAFe®).