The document discusses the challenges enterprises face in aligning business and IT, emphasizing that communication issues and unclear requirements often lead to project failures and wasted budgets. It proposes a capabilities-based framework to improve collaboration between business and technology teams, streamline requirements gathering, and enhance project outcomes. The Capstera framework is introduced as a solution to manage business definitions and drive effective IT enablement.

1. Optimize Your Execution
by Aligning Business and IT
Thought Paper by Capstera.com
Satya S. Iluri
Founder and CEO
www.Capstera.com

2. “I know half my IT Budget is wasted, I just don't know which half.”
(Modified from the famous saying about advertising)
Enterprises the world over spend billions of dollars on technology enablement of business functions. A
significant portion of those dollars end up creating suboptimal solutions. Most IT project problems are
rooted in ambiguous business definition, churn in requirements gathering, scope creep beyond a
minimum marketable feature set, wild cost guestimations, not planning for interdependencies, and a
lack of strong governance.
Everyone agrees that a sizeable portion of IT projects fail to meet or under deliver on expectations.
However, while there is agreement that most technology projects end up in trouble, the business and
technology teams’ disagree on why IT projects fail.
Several research studies have shown that the larger the budget and the longer the timelines, the greater
the cost and schedule overruns, and the poorer the outcomes for IT projects. Business and IT
professionals, in fact, believe that 75% of IT projects are doomed from the start (Figure 1).
Figure 1. The Perception and Reality of IT projects

3. Dissonance and Divergence - The Business / IT interface
A key aspect of this gloomy landscape is the disconnect between business and IT. These teams of smart
and talented people lack a common framework and language to communicate with one another often
leading to missed expectations, frustration, and unnecessary churn.
For every CIO who hears the common refrain: “IT takes forever and does not deliver what we want” and
for every business leader who hears: “If only business provided a big picture with a detailed actionable
roadmap”, this thought paper strives to address these issues and offers a framework to solve them
(Figure 2).
Figure 2. Does this Dialog sound familiar?
Business
IT
Why does this button
cost a million dollars to
build?
We need to go
to market in two
quarters. Why
does a small
feature take so
long to deliver?
How much
detail do you
need to build
something?
We’ve already
provided
volumes of
documents
I can’t wait for other groups in
the firm to agree to a path
forward. Why not build for us
and then add on stuff for others?
Each BU wants
different changes
to the same thing
at different times
Business is
incapable of
thinking through
the implications
of their “small
tweaks”
All business
needs are
urgent – we
are drowning in
unnecessary
technical debt
80% of what we do is
rework because
business keeps shifting
requirements on us

4. Things that can go wrong and those that shouldn’t go wrong, always do!
Depending on the maturity of a firm’s people and processes, large transformation projects and
programs may suffer from many of the following issues.
Challenges

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Project and organizational goals unclear
Scope not well understood
Lack of clarity in business requirements
Constantly evolving needs and requirements
Multiple projects needing/building similar overlapping capabilities
Overlapping capabilities create a complex web of interdependencies
Time to market considerations trump all others
Thinking is encumbered by current system constraints rather than capabilitybased future evolution, especially given the complex interdependencies that
are hard to “untangle”
Focus on User Interface rather than user experience (UXD)
Skill and role mismatch
Lack of balance between content and coordination
What happens if some or all of the challenges afflict your enterprise projects and programs?
Implications
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Disjointed strategy, organizational goals, and execution
Scope creep due to ambiguity of deliverables
Increased complexity and cost due to lack of reuse resulting in unnecessary
redundancy of capabilities
Enablement of convoluted processes rather than reengineering of processes
for the future
Accumulation of technical debt due to unnecessary expediency and lack of
rigor in architecture and design
Regular cost overruns and project delays
Suboptimal solution delivery and stakeholder dissatisfaction

5. How do we get out of this morass?
1. Understand the business motivation
o
It all should start with understanding the why. The business motivation is the
fountainhead decision that leads to strategy, goals and objectives. There are many
models in the industry to help enterprises capture the business motivation - at Capstera,
we use a model called “BuRST” (Business Rationale, Strategy and Tactics).
2. Distill the strategy into a succinct target operating model
o
If the firm’s strategy resides in an ivory tower, it does not help the programs or projects
downstream. It is essential to translate the high level business motivation into a target
operating model. The target operating model creates a blue print of the future state and
allows business to make the right strategic choices to improve the way the organization,
business processes, IT and governance are structured and managed.
3. Focus on the “What” first – focus on the capabilities
o
Business capabilities are the foundational layer of an enterprise. Business capability
modeling represents a stable description of what a business does (capabilities) to reach
its objectives, instead of a dynamic description of how it does it (processes). A capability
map or model decomposes what a business does into a granular, hierarchical structure.
o
A capability model that is decomposed to a level one or two captures a 30,000 foot view
and mostly works as wall art. It is essential that capabilities are defined to be granular
(typically level 4-6), mutually exclusive, collectively exhaustive and individually a whole
at each level of granularity.
o
Also it is paramount to capture rich content and context for these capabilities. The
capability semantics will help define the business services, which in turn will inform and
influence the coarseness and modularity of the IT services. The MODAF (Ministry of
Defense Architecture Framework) SOV (Service Oriented Views) provides a great
exposition on how to transition from Capabilities to IT services.

6. 4. Foster the discipline of composition and capability reuse
o
More often than not, projects and product functionality are developed in silos. Instead,
in the new paradigm, a product or platform owner can compose a new product or
project by leveraging the underlying capabilities as Lego blocks. Since capability maps
are cumulatively exhaustive, it should be possible to describe each project and product
fully using the underlying capabilities and how these capabilities are expected to be
used.
o
Since the underlying capability map is mutually exclusive, mapping projects and
products helps quickly identify overlaps across them, fostering reuse, minimizing
replication, lowering cost, engendering agility, and speeding time to market (Figure 3).
Figure 3. Capabilities help quickly identify overlaps and fosters reuse
Business
IT
Project 8
Products/services,
projects/initiatives are
a conglomeration of
capabilities and their
evolution
Overlap can be easily
identified and managed,
avoiding unecessary
redundancy and fostering
reuse
Product 1
Program 4
Capabilities establish a common
language between business and IT
5. Define requirements as a way to evolve capabilities over the long haul
o
Some of the constant challenges in requirements gathering and analysis are lack of
consistent granularity and detail, and disparateness of requirements with hard to
decipher interdependencies across projects. By gathering capability-specific instead of
project-specific requirements, interdependencies can be easily spotted and the
granularity and required detail becomes immediately obvious. This small change can go
a long way in streamlining roadmaps and eliminating churn.

7. 6. Link funding to multi-year capability maturity, not silo’ed projects
o
Demanding change at the execution layer will only yield minimal dividends if it is not
driven by the top and linked to tangible budgets and resources. Funding capability
refinements and evolution over piecemeal projects can help ensure that strategy drives
execution with complete short, medium and long-term view of expected outcomes.
7. Rationalize the application portfolio
o
Rationalizing the application portfolio can significantly reduce IT complexity. The best
approach to do this is using lenses to evaluate the application footprint across
capabilities and quickly identify overlaps. Lenses can also help assess each application
across key dimensions such as business value, customer affinity, maintenance and
support costs, and architecture compatibility.
8. Layer in process and data
o
Once the capabilities are defined and the landscape mapped and simplified, it is
important to understand how things work or should work. At the highest level, one can
start with Michael Porter’s value chain concept to understand the key demand and
supply drivers and flows. Stakeholder centric value streams, process models and
customer journey maps can further help communicate the business processes and
workflows.
9. Monitor and measure against KPIs
o
“Some is not a number, soon is not a time”. It is essential to set up, monitor and
measure granular success metrics and performance indicators across cost, timeliness
and quality of each area you want to make progress against. KPIs have to be granular
enough to quickly identify and address any problems. If possible, key metrics should be
benchmarked against peers to help provide a point of comparison and highlight areas of
opportunity.
10. Establish a capability-centric organization design
o
The pinnacle of this approach is structuring the organization around capabilities,
supported by communities of practice and centers of excellence. While it is easier said
than done, at least for core capabilities a notional capability-centric organization model
can effectively complement the rest of the traditional structure.

8. Summary
It is possible to align business and IT around a common framework and language, link execution to
strategy, and optimize the IT landscape. It takes leadership, a holistic framework, and a disciplined
implementation plan to make the transformation endeavor a success.
A capabilities-based approach can provide the much needed bridge between business and IT. Here’s
how you can get started:
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Secure executive buy-in and support – Unless the top level support to a better way is not
strong, the changes will be peripheral and impact will be minimal.
Showcase small wins prior to firm-wide roll out – Avoid boiling the ocean. Pick a highly visible
project and celebrate the win. After refining the approach with the lessons learnt, move
forward cautiously.
This is an evolution, not a revolution - The capabilities-based framework is not a rip and replace
method. It is an evolution of various past frameworks and approaches. You can mix it and
match it with different ideas – for example, lean manufacturing, extreme programming etc.
Get training and change management right – Executive fiat does not generally work in fostering
inherent and lasting change. Provide adequate training and support throughout the process.
If you are able to encourage your team to adopt the capabilities-based framework to enterprise
transformation, you will see:
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A common language between business and technology
Better alignment and shared vision
Reduced requirements churn
Capability evolution, rather than project focus
Significantly lower IT complexity
Focus on composition and reuse
Lower cost structure and faster time to market
Reduced complexity by avoiding application proliferation
Global optimization rather than local optimization in silos

9. What is Capstera and how can it help?
Capstera is a framework and software fusing elements of business architecture, capability mapping and
requirements management to help enterprises create and manage effective business definitions and
roadmaps, driving optimal IT enablement and system development.
The Capstera framework eliminates many of the problems with IT development because “what” a
company does (the capabilities) provides a stable, strategy-driven and MECE (mutually exclusive and
cumulatively exhaustive) picture of the business, helping identify and manage project and product
overlaps and conflicts quickly. On the other hand, the current approach of focusing on “how” a company
does these (the processes) tends to be a more fluid footing with frequent cross-capability touch points
that lead to conflicts and complexity, requirements churn, and potential points of failure.
To make your Enterprise Agile and Optimize your IT,
get started with CAPSTERA today.
Contact:
Satya S. Iluri, Founder and CEO
Capstera www.capstera.com
Twitter: @Capstera
Email: Satya.iluri@capstera.com