Business Capability Modeling Primer - Part 1

Recently, I had the chance to talk with Frank Malta, the Chief Architect of drug manuacturer Merck.  Frank’s EA team has been eagerly pursuing a vision of enterprise wide business capability modeling for a number of years and has generated quite a bit of success.  

While you have the opportunity to hear about Merck in our podcast, I thought I’d take a few minutes to provide a foundation on business capability modeling for the A&G readership, as it is a concept that we are hearing more and more about these days.

What follows in this and the next blog posting is a summary of concepts and findings from several thought leaders including Gartner, Forrester and Microsoft, as well as from personal anecdotes from the A&G team.  I hope you find this valuable.  Please send me your own thoughts and comments on this topic at jlamis@architectureandgovernance.com.

The Chicken or the Egg?

Which came first:  The technology architecture or the business architecture?  Ask most architects, and they will say in reality, the technology architecture, yet they realize in a world of evolving service orientation, it is the process of executing the business that all other architectures must now align to. 

Many – too many – organizations are struggling with service orientation because of the gap between these architectures.  Business agility demands a flexible and reconfigurable business architecture layer. Without an understanding of how the business operates tied directly to the IT architecture, it is likely that a continued challenge will ensue.

So how do we become confident that IT investments evolve aligned with business needs? 

In most architectures, there is rarely a well-defined connection between business models and their technology implementation.  While many teams have made substantial investments in BPM, the problem with business process models is that they frequently are limited to the physical environment in which they exist.  While they may accurately capture what processes happen in a physical location, or work done by a specific employee, they lack an understanding of the larger picture they represent – the interdependence and interplay between businesses, value chains and services.  It is within this context that we see the emergence of business capability modeling. 

Not HOW – but WHAT a business does

At the heart of capability modeling is the notion of looking at what a business function does, not how it does it.  How a business function works is an inward focused process-oriented perspective.  What it does, on the other hand, is an external perspective that answers questions like performance levels and goals and values. 

In a world where global supply chains have become fluid and business is done through an ever evolving network of connected partners, the notion of understanding the external – business capability – perspective becomes paramount.

Areas where Capability Modeling shines

The new enterprise is faced with many more opportunities for executing business capabilities.  The business process model can hold up with traditional value chain partners: buying raw materials, producing goods, selling products etc.  But with an overlay of business process outsourcing – from call centers to development to HR to sales to EA itself – a capability modeling view is required.

Layer again with notions like customer self service, crowdsourcing, and freemium business models and you soon have a traditional business process model so scrambled that it is virtually impossible to tie it successfully back to the underling technical architecture with any degree of accuracy.  Remarkably, a business capability model for the enterprise remains constant through these newer business challenges.

Clearly, we may never be able to architecturally catch up to the business process changes that we are facing.  And yet companies like Merck and others have found an excellent strategy for keeping IT decision-making in sync with the business of the enterprise.  In the my next posting, I’ll explore how companies are making business capability models a foundation of their architectural success.