Business capability modelling: Part one

The ICT department within any enterprise can benefit from a structured approach to understanding business capability of the enterprise. Business capability modelling (BCM) is an enterprise architecture technique that can play a key role in transforming the relationship between ICT and the business.

For medium and large enterprises in Australia, the ICT department can be grouped into one of two models:

• Subservient supplier: ICT supplies infrastructure and other services in response to business requirements.
• Business service provider: ICT works in close partnership with business areas to provide business services in a partnership relationship.

There are pros and cons with either model. However, ICT departments that act as a business service provider are elevated to the level of partner, while those that fall into the supplier mould are subservient to the rest of the business. Many organisations do not necessarily sit at either extreme end of the scale, and might fit into a middle ground or mixed model, but for the purpose of explanation, the two are discussed and compared.

Commodity supplier

The subservient model often has following characteristics:

• The head of the ICT department has low status in the executive – often not called a CIO.
• ICT is not well respected throughout the organisation, from the senior executive (who can’t understand why ICT needs so much money) down to the graduate knowledge worker (who can’t understand why he or she isn’t allowed to connect his or her favourite knowledge sharing application or device at work).
• Major projects involving information technology are run outside ICT, with ICT being a supplier to the project.
• The ICT department may provide business application services, but these will generally be in the form of software development and integration – business areas write the specifications (and typically struggle to understand why they can’t get better solutions – projects run over-time and over-budget and do not meet quality expectations).

Business partner

The business partner model often has the following characteristics:

• The CIO reports directly to the head of the organisation. The CIO is an influential and respected member of the top executive board.
• ICT is seen as a key enabler of the business and staff members from business areas are happy to work alongside their ICT colleagues to support projects which add value to the organisation. ICT and business areas work together to jointly deliver business services.
• Major business transformation projects are run in partnership with ICT, since information technology is seen as both the driver and a valuable enabler of business outcome improvement.
• The ICT department sits on an equal footing with the business areas that own the key enterprise functions. This means that ICT jointly owns the applications and information in partnership with business, and are the experts in the system and how it is used. It also means that even though business areas are responsible for the business outcomes that the system supports, they realise that they need the expertise that comes from ICT.
• Business lines provide project and infrastructure funding to ensure project success, and to reap the positive returns.

There is a right model and a right time for every organisation, but a full analysis of that requires a deep understanding of the organisation, its purpose, culture and history. Business capability modelling is a key strategic mechanism that can assist in moving an ICT organisation from the status of subservient supplier to business partner.

Why consider business capability modelling?

Business capability modelling is an enterprise architecture discipline that offers several benefits over other structured approaches to modelling business requirements:

• BCM can be understood by a wide range of audiences. If used well, we see the BCM as a central reference point at a wide range of levels in the organisation and often the BCM is mounted on the CEO’s office wall and posted in the junior programmer’s cubicle.

BCM has direct links to several other high-value models:

• Organisation structure
• Strategic Sourcing Models
• Business process models and business process hierarchies
• Application Integration Architectures and SOA Principles
• Technology Models

A BCM is a relatively stable model and therefore an investment in BCM can provide returns over a longer time-frame, for the same effort investment, compared to other approaches.

Next steps:

• Assess the relationship of your ICT organisation with your wider enterprise.
• Identify any failures that have resulted from a lack of partnership between IT and the business, and quantify these in terms of business impact.
• Consider the benefits of increasing the status of the ICT organisation within your enterprise.
• Include business capability modelling in your strategy to transform your relationship with the enterprise.

Where ICT deeply understands the business, a close relationship between respected partners can develop – often this is reflected by a direct reporting link between the CIO and CEO. Failure to appreciate the business capability consigns the ICT department to be a subservient commodity supplier, rather than a business partner.

Justin Butcher is an IBRS advisor specialising in enterprise architecture, solution architecture, business systems analysis and complex systems procurement. He provides insights into the practical application of enterprise architecture to address real issues that face modern enterprises. He focuses on the strategic alignment of technology to business goals and objectives, drawing on experience in software engineering, infrastructure solution design, data architecture and large project architecture leadership.

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