Using Capability Models for Strategic Alignment

In many enterprises there is a gap between strategies and their implementation by business processes and information systems supporting those processes. Capabilities can bridge this gap by offering a common language (for business and IT) and a means to systematically map strategy (expressed in business models) to capabilities, which are then implemented using, e.g., people, business processes, and also information systems. Therefore, capabilities form a central element in business architecture management, easing the execution of a business strategy as expressed, e.g., in various forms of business model canvases. This chapter explains the general concept of capabilities. These can be divided into so-called operational capabilities, which are the ones to implement and execute a strategy, and dynamic capabilities, which are needed to formulate business models, to develop strategies, and to configure the right set of operational capabilities. The main part of the chapter deals with methods that help manage a portfolio of operational capabilities, such as so-called heat mapping, or the use of capability footprints, and provides hints on how to obtain a capability map for an enterprise in some given industry.