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Business Capability – a short clarification

posted Jun 19, 2017, 2:54 AM by Alar Raabe

The term “businesscapability” is synonymous with BIAN “Service Domain” (see BIAN How-to Guide), with “business component”in IBM’s CBM methodology (see Component Business Models), and with “business function” in general businessmanagement.

A “businesscapability” describes ability to perform certain set of related activities forproviding a set of business services, by combining people, processes, resources(incl. needed systems) and governance, using the business services from otherbusiness capabilities, if needed.

Where “businessservice” describes externally visible unit of business functionality of abusiness capability, which provides value to service consumers, is provided viaexplicit external interfaces, and realized by business processes.

You can think of a businesscapability a self-contained part of business that could be outsourced as is.

Business capabilitiesthemselves can be hierarchically sub-divided into smaller business capabilitiesif needed, or combined into larger business capabilities up to a businesscapability to provide all banking services.

Business capabilitiesare connected through the business services and form a value network.

The businesscapabilities for a given business domain can be found/formulated, taking as the startingpoint the lists of key activities needed for all the business models of given business domain. The set of business capabilities describes what things given business domain mustbe able to do, to support the business strategy and execute the businessmodels.