The Business Capability Debate & Review

Roger Burlton from the BP Trends gave a great talk at the BBC conference about “A Process Centric approach to Business Capability”.  This was in response to a large debate held on Linked-In about “Capabilities, Processes, Value Steams and All That”.

A central issue is whether there is a difference between “Business Capability” (BC) and “Business Process” (BP).  No matter how this is resolved, there will never be one thing that solves all your problems. The history of technology is rife with searching for the single holy grail. Business Process & Business Capability is like the collision of two worlds.

  • Some feel that BP is a low form of BC.
  • Some feel that BCs are the building blocks of BPs.
  • Some feel that BC is the know how, while BP is the doing.
  • Some feel that BPs are simply ineffective without BCs.
  • Some feel that BC is a latent BP, ready to spring into action.
  • Some feel that BC is an emergent property of a BP.
  • Some feel they are precisely the same thing.

This is sort of like the chicken and the egg problem.  They seem somehow co-dependent.  The military talk about capabilities as being the potential to carry out a process.  That is, the battle might be the process, but the capabilities are what they need to be ready for the next engagement.  This is in line with the idea that a process is composed of capabilities.

Some ask: why do we need something new?  This is strongly represented by those people who believe that every action is part of a process, and a process is just a sequence of actions, therefor everything in a business is a process.  It seems that others who talk mostly about business architecture like to use the term capability, but improving a capability always improves a process, and vice versa — they are two sides of the same coin.

Others say that the entire argument is nothing more than people trying to make their own favorite thing the big thing at the center of the universe. Maybe all the children should make up and become friends again.

I greatly appreciated Burlton’s admonition to define your terms first. Beyond definition, there is also a concept of “shared meaning” which goes beyond words, but at the very least we should use the same terms.

  • Business – An organization or group of organizations with the purpose of providing goods, information or services (from BP Manifesto).
  • Process – a series of actions or operations conducive to an end. This is maybe a little too narrow because of the word “series”.  A process can be an un-ordered set and not necessarily a sequence. Even in cases where every sequence of steps occur in a unique order, it can still be a process. You get into trouble if you think that things that are not sequence means that it is not a process.
  • Business Process – “the work performed by all resources involved in creating outcomes of value for customers and other stakeholders.” Value for the recipient that is beyond the things that were put into it.

“at one end a process is ‘just’ a series of tasks. At the other extreme you have all the attributes of adding value.” – Roger Tregear

  • Capability – “the quality or state of being capable; also ability.” The ability of an organization or a business process to achieve a desired outcome.
  • Capable – “having attributes required for performance or accomplishment
  • Able – having sufficient power, skill, or resources to accomplish an object.

Landing on Mars is a process. A seven-second process made more challenging by the 14 seconds it takes for radio to get to Earth. NASA clearl has a capability to get a machine to Mars.  But what if you ask the question: is NASA is capable of making a deep sea diving expedition?  Clearly, if they wanted to do it, they could.  But we would not count this as a business capability of NASA because it is not useful to them.  Thus a capability implies more of an alignment with strategy than simply raw skill.

process or capability are used in a context.

Why do businesses exist? Only to provide value to the core stakeholders of the business: owners, product or service recipients, society. You have to “find your north star.” Understand those stakeholders needs and expectations. The need of a bus rider is not to ride the bus: it is the need to get from point A to point B. What are the capabilities that you need to achieve this?

Stakeholders identify strategic capabilities, but capabilities by themselves are not enough.  If something go into an organization, it must connect with a process, and it something come out it must be produced by a process.  Processes are key to consuming and producing things.

Both business process and business capability are means to an end. If it comes up from the bottom of the organization by function, it is a capability. Portfolio management sucks at most organizations. Instead it is usually done by the “loudest voice.” Why is it that we assume that a group that got $3M last year will probably need $3M this year?  We don’t know how to assess to-down what an organization will need, so we just take the easy road of assuming that spending should remain the same as a starting point.

Both business capability and business process is needed at every level. The business process connected the business capability to a customer outcome. Each value chain provides services to a market. Value chain is expanded to processes, and those to more processes. From this define your measures.

The main reason for doing Business Architecture is to create an organization that can be changed easily in the right ways.   Your customers don’t care about your org chart, but they do care that you deliver what is expected.

Too much money is spent creating capability that is not connected to strategy.

He talked about the example of the great investment that companies make customizing SAP to their particular requirements.  It is not clear that all that investment ever really pays off.  Maybe you don’t need to customize SAP to do some things.  That is, maybe you should just live with the default behavior.

People who think capabilities are the “what” are delusional.

There was acknowledgement of an article written a few years ago by Mike Rosen, where he said “Simply put, a business capability describes what an enterprise does, not how it does it.”  The implication that the process was how to do it.  I neat clean distinction, but if you go back to Hammer and Champy who essentially invented the term BP, they use BP  clearly to mean what a business does.

It is not a hierarchy of capability to process, or process to capability. You need to have both at the same time. Capability and process work together.

1) Business must be capable of conducting work that has value of someone outside the organization
2) business process make a unique connection to business performance
3) business process are natural aligners of resources used to do work
4) business capabilities make it possible to do the right work in the right way.

Assessment

Alec Sharp has argued that you can use the term BP and BC interchangeably.  Some people think of process as negative (like procedure) and for those people he substitutes the term capability.  There is no question that the term “capability” is sexier than “process” when you are talking about investing in the company.  Process is often confused with procedure, and procedure sounds like red-tape, and nobody likes creating more of that.  However, who can argue against creating more capability?

After reading almost 200 comments on the discussion thread, it is clear that there is no general agreement about the differences of these terms.  Some imagine that capabilities are small, like “printing a document” and processes are made from them.  Other see capabilities as large, like “waging war” and would need many many processes to support them.

Part of the problem is that some people think of a process as an instance of a process, and others see it as the general ability to do the process.  This latter meaning is lot like capability.  When you talk about a business “having a process” you generally aren’t talking about having an instance of a process, but rather having the capability for running processes of a certain kind.  I purposefully used both the words capability and process in that last sentence, because that is how I see them really working out:

a business process is essentially the same thing as a business capability.

At least there is no compelling reason to make a strong distinction between them.  A business capability is like a process definition along with resources to make it happen.  Similarly, having a business process means that you have a definition as well as resources to make it happen.  A definition by itself is not good enough; if you don’t have the resources for a process, you can’t really say you have the process either.  It would seem inconceivable to say that you have a capability for something, but no process to deliver it.  Similarly, it would be inconceivable to say you have a process for something, without capability to deliver it.

There may be somethings like “Satisfy the Customer” which may be easier to discuss in terms of a capability because it is abstract, however it is clear that building this capability is no different than building the processes that deliver with high quality.  Similarly, you may find it easier to discuss “Check clearing” as a process than a capability, because it seems such a minor thing unworthy of the inflated term, but it is never-the-less a capability.  My recommendation: use the terms interchangeably as required to communicate effectively to your audience.

References

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2 Responses to The Business Capability Debate & Review

  1. You write “A business capability is like a process definition along with resources to make it happen”. I think this is key; capability = process + resources. Resources here are both actors (roles) and the different tools / artifacts needed for process performance. You may “have” or “know” the process, but without necessary resources it is difficult to instantiate it (perform it).

  2. AS says:

    capability, noun
    the proven possession of characteristics required to perform a certain kind of work (i.e. as a particular service to produce a particular result) with the expected performance

    The keywords are “proven” and “performance”

    Functions is an internal view of an enterprise (or supply-side). Services is a consumer view of functions (or demand-side). Capabilities is a performance view (or matching demand and supply) including both expected and realised performance.

    process, noun
    explicitly-defined coordination of services and/or activities to produce a particular result

    Thus a process is a way to guarantee a capability of a service to perform a function.

    And substitute terms by their definitions:

    Thus an _explicitly-defined coordination of services and/or activities to produce a particular result_ is a way to guarantee a _proven possession of characteristics required to perform a certain kind of work with the expected performance_ of a service to perform a function.

    In more detail – http://improving-bpm-systems.blogspot.ch/2013/03/bizarch-artefacts-definition-again.html

    Thanks,
    AS
    .

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