Business Capability Analysis

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Business Capability Analysis

Business Capability Analysis

Business Analysis Techniques Series. Business Capability Analysis assesses organizational capabilities to identify gaps between expected performance and actual performance on critical capabilities. Business analyst use capability gaps to determine what the enterprise needs to do to accomplish its strategy.

Capabilities are abilities of an enterprise to act on or transform something that helps achieve a business goal or objective. Capabilities describe outcome of performance or transformation, not how it is performed. 

Capability maps provide a graphical view of capabilities. Each capability is found only once on a capability map, even if possessed by multiple business units. Capabilities impact value by increasing or protecting revenue, reducing or preventing costs, improving service, or achieving compliance. Capabilities themselves don’t have risks. Risks are due to lack of performance in capabilities. 

Strengths

  • Create focused and aligned initiatives by providing a shared outcomes, strategy, and performance.
  • Align business initiatives across multiple units of organization.

Limitations

  • Requires organizational collaboration.
  • Requires a broad, cross–functional collaboration in defining capability model and value framework.
  • No set standards for notation of capabilities maps.

Example:

Business Capability Analysis

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