Capability Modeling

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The promises of Service Oriented Enterprise Architecture include greater business agility, improved application integration at reduced cost, and the holy grail of aligning IT initiatives with business objectives. Achieving these goals requires organizations to approach SOA from an Enterprise Architecture perspective. Although existing EA processes and tools can be adapted to facilitate SOA, a new approach is gaining wider acceptance as being especially suited to this task.

Capability Modeling focuses on the things that business units can do instead of how they do them. There is a direct corollary to the best practices of service design, where the focus of analysis is on what a service does instead of how it is implemented. Business Capabilities can be described in terms that the business is familiar with, and then mapped directly to services implemented by systems supported by the IT organization.

This presentation covers the basics of Capability Modeling and how this important technique can be used by Enterprise Architects to facilitate an SOA adoption program.

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  • Capability Modeling

    1. 1. <ul><li>Chip Wilson </li></ul><ul><li>Chief Technology Officer </li></ul><ul><li>Geniant </li></ul><ul><li>Using Capability Modeling to Facilitate SOA Adoption </li></ul>Welcome to Transformation and Innovation 2007 The Business Transformation Conference
    2. 2. Four Domains of Enterprise Architecture
    3. 3. Why Business Architecture <ul><li>The forgotten stepchild of Enterprise Architecture </li></ul><ul><li>The least integrated of the four </li></ul><ul><li>The four domains are interdependent </li></ul><ul><ul><li>None should be defined in isolation </li></ul></ul><ul><ul><li>Necessitates a consistent approach to defining Enterprise Architecture </li></ul></ul><ul><ul><li>Need for alignment between business and IT is merely an alternative way of expressing this </li></ul></ul><ul><li>Too little effort has been put into creating a common model that encompasses all aspects of Enterprise Architecture </li></ul>
    4. 4. What’s Wrong with Business Process Modeling <ul><li>Represents how the business operates at a given time </li></ul><ul><li>Documents and communicates how rather than what </li></ul><ul><li>Processes change frequently </li></ul><ul><li>Optimizing for agility implies a desire to facilitate change </li></ul><ul><li>Aligning IT with a business architecture that changes frequently sets a company up for frequent changes in the IT architecture </li></ul>
    5. 5. What Should We Model Instead? <ul><li>Focus on what is accomplished </li></ul><ul><li>Business functions tend to remain stable; underlying processes may change radically and frequently </li></ul><ul><li>Outcomes of processes typically do not fluctuate at all </li></ul><ul><li>The level of abstraction where processes are defined by the purpose they serve </li></ul>
    6. 6. What Is This Approach Based On? <ul><li>A basis can be found in business literature addressing core competencies </li></ul><ul><li>The competencies of the business are the what, regardless of how they are accomplished </li></ul><ul><li>“ Capability Modeling” is an emerging technique for analyzing a business or industry and modeling it in terms of these competencies </li></ul>
    7. 7. Capabilities are the Building Blocks of Business <ul><li>Basic outcomes of business processes </li></ul><ul><li>Encapsulate resources </li></ul><ul><ul><li>People </li></ul></ul><ul><ul><li>Technology </li></ul></ul><ul><ul><li>Procedures </li></ul></ul><ul><ul><li>Other resources </li></ul></ul><ul><li>Joined together in networks to create higher level business processes </li></ul><ul><li>Composed of processes built on lower level capabilities </li></ul>Capability Other Resources People Technology Procedures
    8. 8. Business Unit Capabilities <ul><li>Defines a business unit’s purpose </li></ul><ul><li>Provides a black box view </li></ul><ul><li>Hides internal implementation </li></ul><ul><li>A direct input to service design </li></ul><ul><li>Parallel black box approach encapsulates a service’s implementation behind its interface </li></ul>SOA
    9. 9. Capability Model Attributes <ul><li>Capabilities </li></ul><ul><ul><li>Purpose </li></ul></ul><ul><ul><li>Service level expectation </li></ul></ul><ul><ul><li>Customers </li></ul></ul><ul><ul><li>Level of granularity </li></ul></ul><ul><li>Relationships </li></ul><ul><li>Boundaries </li></ul>
    10. 10. Levels of Granularity <ul><li>Multiple levels model the business in successively finer levels of detail </li></ul><ul><li>Capability Rule of Thumb: </li></ul><ul><ul><li>Coarse-grained enough that it remains constant over time </li></ul></ul><ul><ul><li>Fine-grained enough that all stakeholders understand it </li></ul></ul>
    11. 11. <ul><li>Relationships are as important to the Capability Model as the capabilities themselves </li></ul><ul><ul><li>Dependencies between capabilities and the information that passes between them </li></ul></ul><ul><ul><li>Indirect relationship via a higher level business process </li></ul></ul><ul><ul><li>Capabilities can serve in an oversight capacity , governing execution of other capabilities </li></ul></ul><ul><ul><li>Capabilities can gather metrics on other capabilities or in some way optimize their execution </li></ul></ul>Networks of Capabilities
    12. 12. The Business Boundary Defines The Value Chain Company Customers Suppliers Regulatory Bodies Outsourced functions Influences
    13. 13. The Physical Boundary Defines the Corporate Entity Outsourced value chain functions Environmental Capabilities Operational Capabilities Everything outside the business boundary XYZ, Inc.
    14. 14. Core Competencies Define Strategic Capabilities <ul><li>Delineate core competencies (capabilities) from non-strategic capabilities </li></ul><ul><li>Core competencies converge with physical boundary in an ideal business architecture </li></ul><ul><ul><li>Retain core competencies within the corporate entity </li></ul></ul><ul><ul><li>Outsource non-strategic capabilities </li></ul></ul>
    15. 15. Capability Boundary Defines the Interface <ul><li>Outside the capability </li></ul><ul><ul><li>Black box view of the capability </li></ul></ul><ul><ul><li>What it does rather than how it does it </li></ul></ul><ul><li>Inside the capability </li></ul><ul><ul><li>Implementation of the capability </li></ul></ul><ul><ul><li>Irrelevant to the capability model </li></ul></ul>
    16. 16. Business Context Diagram
    17. 17. Enabling Agile Business Architecture Decouple business processes from IT systems <ul><li>Allow each to change independently from the other </li></ul><ul><li>Reconfigure rapidly to respond to a changing competitive landscape </li></ul><ul><li>Evolve systems on their own lifecycle, without affecting business processes </li></ul>
    18. 18. Enabling Agile Application Architecture <ul><li>IT systems must be decoupled from each other </li></ul><ul><ul><li>Allow each system to evolve independently of others </li></ul></ul><ul><ul><li>Swap out entire systems without impacting dependent systems </li></ul></ul><ul><li>System interfaces must be decoupled from their implementation </li></ul>
    19. 19. Benefits of Decoupling <ul><li>Flexibility </li></ul><ul><li>Reduced IT development costs </li></ul><ul><li>Facilitates outsourcing non-core competencies </li></ul><ul><li>Orchestrating services from multiple systems enables business process automation </li></ul><ul><li>Business analysts can implement new business processes and automate existing processes </li></ul>
    20. 20. Benefits of a Single Point of Contact <ul><li>Consistent self-service experience for all </li></ul><ul><li>Keep systems and processes that provide competitive advantage </li></ul><ul><li>External users receive self-service environment designed specifically for their needs </li></ul><ul><li>Improves employee visibility into company operation </li></ul><ul><li>Facilitates collaboration between remote teams </li></ul>
    21. 21. Requirements for Success <ul><li>Executive Sponsorship </li></ul><ul><li>Communication between Business and IT </li></ul><ul><li>Business Focused IT </li></ul>
    22. 22. Executive Sponsorship <ul><li>An SOA adoption program needs appropriate sponsorship </li></ul><ul><li>Requires a strong vision grounded in SOA best practices </li></ul><ul><li>Must be led from the top down </li></ul><ul><li>Create a common vocabulary between business and IT </li></ul><ul><li>Capability Modeling creates tremendous synergies – aligns the entire Enterprise Architecture stack from top to bottom </li></ul>SOA
    23. 23. Communication Between Business and IT <ul><li>IT must understand the strategic business direction </li></ul><ul><li>An ongoing dialogue on business process will: </li></ul><ul><ul><li>Provide a business context for Enterprise Architecture </li></ul></ul><ul><ul><li>Give the business community a suite of tools to automate, improve, or even redesign business processes </li></ul></ul><ul><li>Business processes: </li></ul><ul><ul><li>Are an important part of the alignment of IT and business </li></ul></ul><ul><ul><li>Should not be the basis for a common understanding </li></ul></ul>
    24. 24. Ensuring IT is Business Focused <ul><li>The technical organization needs to: </li></ul><ul><ul><li>Have a solid grounding in the company’s history </li></ul></ul><ul><ul><li>Understand why the business operates the way it does </li></ul></ul><ul><ul><li>Identify opportunities for greater efficiency </li></ul></ul><ul><li>Technical community must be willing and able to keep communication channels open to: </li></ul><ul><ul><li>Keep abreast of the competitive landscape and the operation of the business </li></ul></ul><ul><ul><li>Identify opportunities to leverage technology to further business strategy </li></ul></ul>
    25. 25. Adoption Process <ul><li>Enterprise Assessment </li></ul><ul><ul><li>Current State – Identify systems, processes and capabilities </li></ul></ul><ul><ul><li>Future State – Envision ideal systems and capabilities </li></ul></ul><ul><ul><li>Gap Analysis – Develop a roadmap for aligning the IT environment with the business objectives </li></ul></ul><ul><li>Implement the roadmap </li></ul>
    26. 26. Enterprise Application Map
    27. 27. Read More <ul><li>Align Journal </li></ul><ul><li>Jan/Feb 2007 issue </li></ul>
    28. 28. <ul><li>Chip Wilson </li></ul><ul><li>Chief Technology Officer </li></ul><ul><li>Geniant </li></ul><ul><li>[email_address] </li></ul><ul><li>www.geniant.com </li></ul>Thank You

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