To effectively drive business transformation, organizations must continuously improve the performance of their business capabilities. Capabilities – comprised of people, processes and technology – represent the operating fabric of your company and act as a bridge between strategy and execution. With the right tools, executives can easily define an enterprise capability model, assess the performance of the critical capabilities they require to execute strategies and generate and effectively deliver programs to accelerate business transformation.
Define The Business Capability Model
Building a hierarchical business capability model makes it easy to catalog the operating functions across your organization. The key is standardizing the data needed to effectively measure and improve those capabilities. This includes standardizing descriptive data, calculating cost-of-ownership and deriving assessment metrics (like business importance, operational performance, risk and more), which puts all the information that the organization needs to evaluate the performance of each capability at your fingertips.
Associate Capabilities With Specific Strategies
Having a clear view into the relationship between business capabilities and strategic objectives is a key component that helps ensure that the organization is focusing on the best ways to drive the required business transformation. With this insight, the organization can quickly assess whether or not a strategic objective has the appropriate capabilities in place to support it, while also quickly identifying if it is investing in capabilities that don’t align with any of its current objectives.
Connect All Enterprise Portfolios
Capabilities are the bridge between strategy and all execution. So it’s important to quickly identify how your organization’s capabilities – people, process and tools – are supported by other enterprise portfolios. By mapping the relationships between each business capability and applications, technology, projects and programs, executives, business and enterprise architects and EPMOs can assess the impact that changes to one portfolio will have on other portfolios. This also provides the traceability to decompose each capability and identify areas of improvement to optimize performance (e.g. enhancing an application which is automating a poor performing capability).
Assess Capabilities & Record Investment Decisions
With an ability to comprehensively assess all key capabilities, organizations are better equipped to understand the impact of their investment decisions. Utilizing metrics like Importance vs. Performance, Cost-of-Ownership, and more, it’s easy to analyze business capabilities, record investment decisions (invest, maintain or enhance), and generate investment programs specifically designed to transform core capabilities. This top-down approach ensures higher quality programs and projects that are tightly aligned with strategic priorities.
Generate Programs, Evaluate Investments & Approve Funds
Through a comprehensive business capability analysis, organizations can quickly build, analyze and approve comprehensive program business cases. This enables organizations to more effectively generate programs, and capture all of the necessary information including program descriptions, Cost & Benefits Analysis, Resource Requirements, Assessment Metrics, and more to evaluate and approve funding publish and review multi-year roadmaps.
Generate Multi-Year Roadmaps
Roadmaps help harmonize investment decisions across organizations and portfolios, enabling the business to better understand and manage the relationships between all investments, business capabilities and strategic priorities. Most companies struggle to automate strategic and technology roadmaps to clearly see how everything comes together. Automating strategic roadmaps will highlight the timing and status of key programs across the organization, while technology roadmaps help you quickly understand the cross portfolio impact of any investment decision – like the cascade of how a delayed project impacts an app, which in turn impacts a capability that supports a strategic priority.
Track Project & Program Performance
An integrated PPM discipline that effectively executes the desired transformation is critical for lifecycle decisions in a roadmap to be meaningful. By integrating the management of both capabilities and project portfolios, an organization can easily see the status of all enhancement initiatives. This provides them with the insight required to rebalance the portfolio to optimize spend and maximize value.
A key step in establishing a robust process for managing business capabilities is tracking and measuring performance. This helps to create a virtuous cycle by providing the metrics needed to pinpoint areas for improvement. By continuing to analyze capability performance, the organization can ensure the right investment decisions are made, which in turn helps to ensure that the organization’s business capabilities are optimized to drive improved company performance and maintain its competitive advantage.