what business should do to achieve business outcomes?
A Business Capability (a.k.a. Capability) describes:
what a business needs to do to achieve its business outcomes. Capabilities provide a common business language for technology and non-technology stakeholders alike, which facilitates strategic conversations without being pulled into technical details, leading to broader stakeholder support and buy-in.
Capabilities are a combination of organizational resources such as human capital (competencies), processes, technologies, applications, initiatives, partnerships and information assets which can help the organization deliver value to its stakeholders and create differentiation (figure 1). By using capabilities, organizations can anchor what they can do to its business strategy thus creating common linkages between business model, business strategy and operating model (figure 2).
figure 1: Business Capability is a combination of resources
Categories of Business Capabilities:
Advantage - create distinction in eyes of customers AND drive financial results
Strategic - with high customer value but little Financial Impact
Essential - drive financial performance but not customer Value
BusinessNecessity - are necessary but are not seen as creating value for customers or driving financial performance
