Business capability. Definitions

 

http://en.wikipedia.org/wiki/Capability_management_in_business

Business capability defined [edit]

A business capability is WHAT a company needs to be able to do to execute its business strategy (e.g., Enable ePayments, tailor solutions at point of sale, demonstrate product concepts with customers, combine elastic and non-elastic materials side by side, etc.).

Another way to think about capabilities is they are a collection or container of people, process and technology that is addressable for a specific purpose.^[1] Capability management is an approach that uses the organization's customer value proposition to establish performance goals for capabilities based on value contribution. It helps drive out inefficiencies in capabilities that contribute low customer impact and focus efficiencies in areas with high financial leverage; while preserving or investing in capabilities for growth.

Capability management topics [edit]

Capability vs. process [edit]

A process is HOW the capability is executed. Much of the reengineering revolution or Business process reengineering focused on HOW to redesign business processes.

Business vs. organizational capability [edit]

An organization capability refers to the way systems and people in the organization work together to get things done.^[2] The way leaders foster shared mindset, orchestrate talent, encourage speed of change, collaboration across boundaries, learn and hold each other accountable – define the company's culture and leadership edge.

Capability vs. competency [edit]

Although often used interchangeably, "capability" and "competency" are quite different.^[3] makes a distinction between capabilities and competencies: individuals have competencies while organizations have capabilities. Both competencies and capabilities have technical and social elements.

Individual
Organization

Technical
Functional Competencies
Business Capabilities

Social
Leadership Competencies
Organizational Capabilities

At the individual-technical intersection, employees in the firm bring functional skills and competencies such as programming, cost accounting, electrical engineering, etc. At the individual-social intersection, leaders also have a set of competencies or skills such as setting the strategic agenda, championing change and building relationships. Moving to the intersection of organizational and technical, are business capabilities. In short, they are the technical things or what the firm must know how to do to execute strategy. For example, a financial service firm must know how to manage risk and design innovative products. Finally, we have organization capabilities such a talent management, collaboration, and accountability. According to Ulrich, they are the underlying DNA, culture, and personality of the firm. They integrate all the other parts of the firm and bring it together. When a group of leaders have mastered certain competencies, organization capabilities become visible. For example, when a group of leaders master "turning vision in to action" and "aligning the organization," the organization a whole shows more "accountability."