Links to articles from series:
Business Capability Modelling Overview (article 1)
Business Capability in-depth explanation (article 2)
Business Capability Model and its use cases (article 3)
Business Capability Modelling workshop recipes (article 4)
Business Capability Model
Business Capability is a way to encapsulate business volatility inside of the abstraction. Suppose you apply this concept to your whole organization. In that case, you will end up with business blocks around which you could build your organizational structure and systems because you can be reasonably confident that this structure will remain unchanged or be changing very slowly in time. In fact, the only good reason for the change is when our Business Strategy would change. Each of those blocks (Business Capabilities) will work like sections within a hull of a ship that is divided using bulkheads. Even if one of the sections will catch fire or be destroyed by an external force, damages will be limited to this section alone. This way, we will reduce the flood-ability of our business and system landscape.
Vacation Rentals Example
There is a well-known company based in San Francisco, California. Founders of this company rented out an air mattress in their living room that turned their apartment into bed and breakfast. Let’s assume we were living a few blocks from them, and we heard about the idea, but to stand out from the crowd, we bought a water mattress instead. A few years later, we were standing on the top floor of our skyscraper with the big “WaterBnB” logo behind us. And start asking ourselves a question – what is our business really about?
As you can, Business Capabilities are forming hierarchical structures. On the highest level, there are fundamental building blocks of an organization. A big part of them will be identical in most of the companies like “Sales and Marketing,” “Accounting,” or “Human Resources.” It becomes more interesting when you will zoom in into those specific to your industry, like “Customer Service” or “Apartment Preparation.” Capabilities became more tangible with every level, but if you decompose too deep, you could end up with steps in some process defined by their outputs, not outcomes, so you need to be aware of that.
How can we use the Business Capability Model?
Domain Decomposition – strategic domain-driven design workshops
As I mentioned in the beginning Business Capability Model is a missing link between the business domain and Bounded Context, the domain-driven design concept. It is an older but better version of the Domain-Driven Design building block called subdomain. When I was facilitating strategic DDD workshops, it was always a struggle for me to come up with proper domain decomposition. I was still creating subdomains based on my gut feelings. I lacked a methodology and a framework around that. When I stumbled upon Business Capability, it was a revelation for me; suddenly, I connected the dots and was guided the whole way on the journey from business to bounded contexts. I am now using the Business Capability Model as a complementary activity and artifact to Domain Storytelling/Event Storming, Context Mapping, etc.
My strategic DDD workshop agenda looks like that:
- Impact mapping to understand why we gathered in one room in the first place
- Domain Storytelling / Event Storming to understand the domain
- Business Capability Modelling to decompose the domain
- Context Brainstorming to discover Bounded Contexts
- Context Validation with Message Flow, Context Mapping and Bounded Context Canvas to verify the correctness of Bounded Contexts
As you can, Business Capability Modelling nicely fits between domain discovery and bounded contexts discovery. I have noticed that applying the “Arrange by Business Capability/Subdomain” heuristic helps create better-bounded contexts from the beginning.
Mergers and acquisitions
In the big corporate world, mergers and acquisitions are happening almost on a daily basis. Companies are sometimes bought for their IT portfolio that could supposedly fill the gaps of a buyer. But how could we possibly asses such an assumption? Business Capability Model looks like a great candidate. We could analyze both companies’ current IT landscape, compare the gaps, and focus on assessing the quality of the narrowed group of systems. We could also prepare the heat map to apply scoring to all capabilities and systems underneath and then analyze if an acquisition is worth it.
Reduce software redundancy in a corporation
Software redundancy is a common problem in big organizations. When a company grows, departments slowly became kingdoms with their government, rules, and budget. It is often easier to create a new software system instead of reaching out to hundreds of people in different parts of a company if, by any chance, they already have similar software. Unfortunately, even if we invest time to do that, it is hard to establish if systems cover the same requirements.
Future state envisioning
The Business Capability Model is a great tool to plan the target state of our enterprise. Whenever we discover some business opportunity using a business capability model, we can assess if we are ready to deliver a new value proposition from the business and IT landscape perspective.
New lingua franca between business and technology
The same way Domain Experts, BAs, Product Owners, and Dev Teams are using Ubiquitous Language, in Domain-Driven Design to enable unambiguous and precise communication, Software/Solution/Enterprise Architects with C-level and Business Stakeholders could use Business Capability Model as new lingua franca. Executives could describe business strategy changes as new Business Capabilities or emphasize and invest in an existing one.
The cornerstone for IT and Business Organisational structure
The Business Capability Model’s two characteristics make it a good inspiration for a Business and IT organizational structure: Stability and Hierarchy. By definition, the Business Capability Model should change very slowly in time, and significant changes should happen only when the business strategy has changed. It seems reasonable to use it as a blueprint of organizational structure. The hierarchical nature of business capabilities gives us a chance to choose granularity that fits our purpose. Suppose we want to make Enterprise Architects responsible and accountable for parts of the IT landscape. We could cut the dough using 1-st or 2-nd level activities (depends on the team’s size).
Key takeaways:
Business Capability Model:
- is a way to encapsulate volatility
- is a hierarchical structure
- can be used during strategic domain-driven design workshops, mergers, and acquisitions
- can help reduce software redundancy in a corporation
- can be a language used between business and IT to form vision or plan strategy
Links to articles from series:
Business Capability Modelling Overview (article 1)
Business Capability in-depth explanation (article 2)
Business Capability Model and its use cases (article 3)
Business Capability Modelling workshop recipes (article 4)
