We are migrating from System Architect to Hopex and adding the new use of Business Capabilities to Hopex. However, some of the Business Units maintain that Business Functions (BF) are parents of Business Capabilities (BC) and others hold the opposite view, that BCs are Parents of BFs. As you may imagine, this does not allow for rationalization across the enterprise nor does it allow for easy data sharing and re-use.
My question to all of you is, how have you either resolved a similar situation or how are you handling BFs and BCs? Do you make the distinction between a BC and a BF or are they all captured as one or the other, a Function or a Capability?
Thanks in advance for your thoughts.
Hi, business functions and business capabilities dont mean the same thing. A function is what you organization-wise have or should have in place, like marketing, sales etc, which then is "Instantiated" by one or many org-units. A business capability describes what your company must be able to do for current or future business. That's a more strategic element, and it has to be instantiated of course - sometimes by a process, sometimes by an org-unit, then you'll need maybe specific skills etc. A good example is M&A, if your strategy is to grow. M&A is not a single process, not only one org-unit will be involved etc.
Does that make sense?
My view is that a Business Capability is the higher, stable, abstract concept of what a business does (e.g. Marketing, Sales, etc.) - independent of the organization's structure, processes, people, or domains.
The Business Functions are the implementation decomposition/breakdown of the Bussiness Capabilites into processes/activities/roles in how a Business Capability is delivered.
A great article: Rethinking the Function of Business Functions
Another great article: Leveraging business capabilities for strategic planning
Gartner is often engagd to help businesses define their Business Capabilities (L0, L1, L2 - for example)
A few additional definitions from various Google searches:
Thanks for your reply and yes, it makes perfect sense. I only wish I could get the rest of the folks at the company to understand and agree with this. They insist that functions are at the top of the stack and capabilities are subordinate.
Kevin, thanks for the very complete reply! I agree and just wish I could convince the rest of the folks that the internal "we've always done it this way" answer is not in alignment with the rest of the world. The company uses functions as the top while capabilities are subordinate.
Now that is what I call a complete answer! Thank you so much Kevin for this answer and the references.
I've been cross-referencing Business Capabilities / Business Functions / Business Services / Business Processes for a while and trying to reconcile the subtle variations, particularly with regards to Business Capabilities vs. Business Services (e.g. ArchiMate / TOGAF / ITIL / etc.). I'd love to hear your insight on this aspect as well.