Capability vs Capacity
Scenarios Capability Capacity Decision
1 No NA Go ahead
2 Yes No Go ahead
3 Yes Yes Return
What is Business Capability Analysis?
Framework For Scoping And Planning
Identifying Alignment With Strategy
Providing A Scope And Prioritization Filter
Need for Business Capability Analysis
• Business capability analysis describes what an enterprise, or part of an enterprise,
is able to do. Business capabilities describe the ability of an enterprise to act on or
transform something that helps achieve a business goal or objective. Capabilities
may be assessed for performance and associated risks to identify specific
performance gaps and prioritize investments. Many product development efforts
are an attempt to improve the performance of an existing business capability or to
deliver a new one. As long as an enterprise continues to perform similar functions,
the capabilities required by the enterprise should remain constant—even if the
method of execution for those capabilities undergoes significant change.
Why for Business Analysts?
• Providing the necessary structure for stakeholders such as the scope and
context under which to effectively align organisational projects
• Identifying the most important aspects of the business. It can be used to
highlight what is most important to the business and channel efforts in the right
• Improving core business processes that form part of the value chain.
Capabilities are the abilities of an enterprise to perform or transform
something that helps achieve a business goal or objective. Capabilities
describe the purpose or outcome of the performance or transformation, not
how the performance or transformation is performed. Each capability is
found only once on a capability map, even if it is possessed by multiple
Resources Capabilities Products
Elements: Using Capabilities
Capabilities impact value through increasing or protecting revenue, reducing
or preventing cost, improving service, achieving compliance, or positioning
the company for the future. Not all capabilities have the same level of value.
There are various tools that can be used to make value explicit in a
Elements: Performance Expectations
Capabilities can be assessed to identify explicit performance expectations.
When a capability is targeted for improvement, a specific performance gap
can be identified. The performance gap is the difference between the current
performance and the desired performance, given the business strategy.
Elements: Risk Model
Elements: Strategic Planning
• Provides a shared articulation of outcomes, strategy, and
performance, which help create very focused and aligned
• Helps align business initiatives across multiple aspects of the
• Useful when assessing the ability of an organization to offer new
products and services.
• Requires an organization to agree to collaborate on this model.
• When created unilaterally or in a vacuum it fails to deliver on the
goals of alignment and shared understanding.
• Requires a broad, cross–functional collaboration in defining the
capability model and the value framework.
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Mr. Venkadesh Narayanan, BSME, MBA, CBAP®, PMI-PBA®, CPRE-FL, CBPP® , CSCP
Former Indian Civil Servant [IRAS 2001 Batch]