Capability Definition

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Dragon1 Definition for Capability:
A capability is defined as a set of tasks that a system is potentially able to perform (acquired skills) at a certain performance level (available capacity). Often only with the use of external resources.

Let us define Capability

A capability is defined as a set of tasks that a system is potentially able to perform (acquired skills) at a certain performance level (available capacity). Often only with the use of external resources.

A capability can become an ability (acquired skills) if it is done frequently. A capability is very pure when its name points to high performance or extremes.

Talking for hours is an ability. Talking for 48 hours in a row is a capability. You could train yourself to do it after some practice, but normally you don't do these things. Maybe only if you are challenged.

'Potentially' means that you can reach a certain level of performance if needed. For example, Google is capable of handling trillions of search requests. Every day, Google needs to be able to handle that, and they can and do.

With resources, we mean the support of something or someone else. For example, Google as an organization needs certain knowledge and hardware it did not create or build itself.

Let us define Business Capability

A business capability is a set of tasks or activities that a business function of an organization is potentially able to perform (acquired skills) at a certain level of performance (available capacity), but only when it is needed. Often, it is not all by itself, but with required resources, like other persons and organizations, their services, knowledge, and technologies. Strategy (objectives & initiatives) and ambitions require certain capabilities.

To put it in a formula: business capability = skills + capacity of a business function.

What is an Ability?

Dragon1 defines an ability (being able) as what a person, system, or organization can do all by itself. An ability is a set of acquired skills (but without stating the capacity).

Business Capabilities vs Business Function

Organizations today identify business functions, business abilities, business capabilities, and business disabilities via business capability studies.

For example, the business function of Sales Management may need modernization. The strategy now requires online sales to be done. If the sales managers and the website cannot make online sales, the sales managers need to be trained, and the website needs to be turned into a webshop.

Once the sales managers are trained and the website is a webshop, online sales have turned from a business disability into a business capability. When 'online sales' is done (executed), 'online sales' becomes a business ability.

In practice, a business capability will be formulated more ambitious than an everyday business function, process, or ability. For example, 24 x 7 full automated online sales in 100+ countries. That is a capability. Even though you are not doing this, if you ultimately could do this, it is a business capability.

The importance of doing a business capability study is:

• 1. Identifying which business capabilities are needed because of the new strategy and new competition
• 2. Identifying the gaps with the current business capabilities, regarding skills and capacity
• 3. Understanding what partners, suppliers, knowledge, technologies, systems, and training you need to develop a business capability
• 4. Understand what it takes to turn a business capability into a business ability or how to upgrade business abilities with it

Examples of Business Capabilities

Here follow example business capabilities that fit the Dragon1 definition for business capability:

• Google is capable of handling 300 trillion web searches every day
• Netflix is capable of providing streaming content conveniently and uniquely to over a billion people
• Microsoft and Amazon are capable of hosting a cloud for every living creature on earth
• Nasa and Elon Musk are capable of setting up a colony on Mars (pretty soon)
• Startup organizations are capable of competing with Fortune 500 corporations because of new technologies and investments. They need to be able to do this to gain entry into a market. Fortune 500 corporations are, in turn, able to acquire startups (as they do when size, complexity, and age have turned innovation into a disability).

Business Capability Documentation Template

Dragon1 suggests the following template for documenting Business Capabilities:

• Name:
• Statement:
• Rationale:
• Required Skills:
• Required Capacity:
• Literature reference:
• Internal Resources:
• External Resources:
• Owner:
• Workflow Status:
• Version:
• Source:

Examples of Non Business Capabilities

Often, the notion is that the business functions, business abilities, business processes, or business activities are business capabilities, but that is not true. They are nothing special, any organization does them, so they do not at all uniquely define your organization.

Below, you see business functions and business processes that are often mistaken for business capabilities.

• Marketing
• Customer Contact
• Outbound Telemarketing
• Strategic Management
• HR

Many definitions for capability and business capability are vague or bad and accept business functions and business processes to be labeled as business capability.

Why would you call business functions business capabilities? That would only create misunderstanding and confusion!

Definitions of Capability by Other Methods, Frameworks, and Modeling Languages

• ArchiMate 3.1: A capability represents an ability that an active structure element, such as an organization, person, or system, possesses.
• TOGAF 9.1: A capability is an ability that an organization, person, or system possesses. Capabilities are typically expressed in general and high-level terms and typically require a combination of organization, people, processes, and technology. For example, marketing, customer contact, or outbound telemarketing.
• BIZBOK 4.1: A capability is a particular ability or capacity that a business may possess or exchange to achieve a specific purpose or outcome.
• Bas van Gils (Strategy Alliance): CAPABILITY = CAPacity x ABILITY. - ABILITY refers to skills and proficiency in a particular area. It should be noted that ability is a relative term: one actor (human, machine, computer) may have higher proficiency levels than others. The ability level can be increased due to (formal) training and practice. - CAPacity refers to the degree to which actors (human, machine, computer) are available to use their skills to achieve a goal. Capacity can be influenced by freeing up / adding resources to the available pool. More information on the Strategy Alliance Website.
• Michael Poulin: - A business capability is the ability of an entity - person or organization - to create or deliver specific Real-world Effect (outcome) in a particular business execution context. If the context changes, yesterday's capability can vanish. The fact that you did something yesterday does not mean (itself) that you can do this tomorrow. A capability exists only if all the resources needed for capability realization are available. No resources - no capabilities; competencies/knowledge/skills are not enough for having the capability. You lose capability if you outsource it.
• Richard Hillier - A business capability is the ability to perform a business activity that is recognized as being required for success and which needs to be specifically managed

Also Read

Read more about business capabilities in the resources section. Try the demo to generate and analyze a Capability heat map and read about the Data Visualization tool

If you have comments or remarks about this Dragon1 term or definition, please mail to specs@dragon1.com.