Organizational Capability Analysis Task
An Organizational Capability Analysis Task is an analysis task for business capabilities.
- AKA: Business Capability Analysis.
- Context:
- It can support a Organizational Capability Management Task.
- Example(s):
- …
- Counter-Example(s):
- See: Production Process Capability Analysis, Business Capability Management.
References
2008
- (Merrifield et al., 2008) ⇒ Rick Merrifield, Jac Calhoun, and Dennis Stevens. (2008). “The Next Revolution in Productivity." Harvard Business Review, Jun 1;86(6):72.
- QUOTE: … The first step involves drawing a diagram of the activities, capabilities, and subcapabilities in your business. Collaborating with the people who run a particular area of the business, you should describe its operation in terms of outcomes or fundamental purposes. This is easier said than done because people are used to describing the work they do (“We send a customer an invoice that requests on-time payment”) and how they do it (“We check the order against our invoice. Then we call the customer to ask who should receive the invoice and how we should send it. On the due date, we check to see whether we have been paid.”). They are not accustomed to talking about its fundamental purpose or outcome (“bill customer” or “collect customer payment”).
The next task is to describe the crucial capabilities that support most of your business activities, including all the key ones. For the area “generate demand,” the managers at one financial services firm listed three activities: manage partner relationships, market products and services, and sell products and services. We then asked them what capabilities supported each. They came up with seven, for instance, for sell products and services: manage orders, manage sales, manage immediately filled sales, configure product pricing, manage contracts, qualify prospects, and conduct business intelligence. In all, it took about three weeks to define the entire company’s capabilities and subcapabilities.
There are three basic criteria for determining which activities are most important to your business, which have underlying capabilities that need to be improved, and which are candidates to become web services:
- Business value: Does the activity (or the capabilities that deliver it) differentiate your company from competitors, greatly influence whether customers buy from you and remain loyal, or drive a key performance measure such as cost of manufacturing, product quality, or time to market with new products?
- Current performance: Is the performance of an activity’s underlying capabilities excellent, inconsistent, or poor in terms of your company’s needs and relative to competitors? How much investment is necessary to raise performance to the required level? Would the higher performance justify the investment?
- Predictability: Are the outcomes that an activity delivers (in terms of cost, time, quality, and so on) inherently predictable or not? The answer to that question is important because if the outcomes are highly unpredictable, the activity (or at least its user interface) will be difficult to automate. If it cannot be automated according to SOA guidelines, sharing it with other divisions or shifting it to customers or suppliers will be difficult.
- QUOTE: … The first step involves drawing a diagram of the activities, capabilities, and subcapabilities in your business. Collaborating with the people who run a particular area of the business, you should describe its operation in terms of outcomes or fundamental purposes. This is easier said than done because people are used to describing the work they do (“We send a customer an invoice that requests on-time payment”) and how they do it (“We check the order against our invoice. Then we call the customer to ask who should receive the invoice and how we should send it. On the due date, we check to see whether we have been paid.”). They are not accustomed to talking about its fundamental purpose or outcome (“bill customer” or “collect customer payment”).