Business Capability Driven Strategy

There was a time when IT was a black box to everyone else, a sort of Merlin-style magic. We (the IT community) encouraged and enjoyed that too! Those days are long gone and today we live in a very different world where many people in ‘the Business’ are very IT literate and are looking for much more autonomy in their data provisioning.

Equally, CEO’s and CFO’s (and other Business leaders) are very technology-aware and are demanding that their companies are ‘digitally transformed’, ‘agile’, ‘insights driven’ and – especially – are adopting AI.

But what does that all mean? How is a CIO with a limited budget and significant technical debt supposed to deliver that AND support the Business strategic objectives? In a word ‘focus’. But how to focus? Actually, we can break that down to a series of steps and reduce the seemingly insurmountable challenge of delivering on so many fronts to a prioritised, costed, and focussed roadmap. If this sounds like something that is only relevant to ‘BIG’ companies it really isn’t – it applies to any size company.

One excellent method for discovering what to focus on is Business Capability assessment. This is a process of understanding which capabilities (using a generic model) are important to the customer and what their current versus target maturity levels are. Maturity is defined via comparison to industry standard. From this we get key Capability maturity gaps and they are, effectively focus areas by definition.

At Birchman we customise our offerings to what our customers need. It’s not an up-front commitment to 250k just to study what needs to be done. There are logical steps and our customers are not having to commit to all the steps but rather just the first step, then review, discuss and agree further steps if/when the customer is ready. Our key is that we will engage for short-term assignments and by engaging, demonstrate our value and the big wins we can deliver in the next steps. Each step, in itself, can be limited in Capability-focus, thereby reducing the time and cost of that step.

The Typical Process Looks Like This;

#1 Health-Check

A short engagement to work with our customers to understand their current landscape, pain points, strategic goals and short-term direction. Out of this will be recommendations on the achievability of the short-term tactical projects and a mapping of pain points both to those projects and the strategic goals as well as a high-level list of potential projects to resolve significant pain points. This is also an excellent input into the next step of the process.

  • #1 Business capability assessment and ongoing maintenance
  • #2 Road mapping
  • #3 Setting-up project structures, governance and templates
  • #4 Running individual projects

#2 Business Capability Assessment and Ongoing Maintenance

Firstly, discuss with Key Business Functional leaders the current and target capability maturity and which capabilities are value-adding for them. Having done this we get function-specific critical capability gaps which we then feed into the Leadership team to get a x-functional view which then drives a calibrated set of priority gaps. The final stage in this step is to assess all current and planned projects the customer has against these gaps to identify which will deliver the gaps and then to propose potential projects for gaps not being filled by the known projects. The final output will be twofold:

  1. A BCM with importance, current and target maturity defined deriving a score indicating priority;
  2. A project list mapped to these critical maturity gaps.

Critically, this doesn’t have to be a four week process involving everyone in the Business Leadership team. It is also normal to go into this with a defined subset of level 1 capabilities and just focus on those (e.g. Logistics, Procurement, Data & Analytics) which makes it a much smaller and faster task. Other capabilities could be assessed on an ongoing basis over time. The outputs can be in excel or in a sophisticated EA tool like LeanIX.

#3 Road Mapping

This is the process of reviewing current and planned projects (as well as the new proposed projects from step 2), understanding scope, timing and resources and planning them in in achievable waves adopting constraints. The outcome will be some planned projects will be moved (forward or backward), some may be put on hold and some new projects prioritised. This also becomes a working document to be reviewed on a fairly regular basis. This can be just an excel spreadsheet or something much more sophisticated if the customer uses EA tools like LeanIX. 

#4 Setting-up Project Structures, Governance and Templates

The outputs of this step are depending on the level of sophistication any given customer has in terms of Project and Portfolio management. Again, it could just be excel based. In any case we will work with the customer to define standard governance forums and some templates for managing projects and x-project issues as well as the ongoing management of the project prioritisation list.

#5 Running individual projects

In summary, by breaking down the process into manageable steps it becomes much more achievable, and we are able to help our customers deliver to their Business strategies without committing to long term, large-scale engagements up-front. At Birchman, our customers are front and central to our own objectives, and we are happy to adopt and adapt our processes to fit with the customers’ needs.

There are two common themes which run through everything we do: 

  1. Data and insights – we are constantly seeking to understand the data and insights needs for each capability area and to help define the overall data platform and strategy for our customer (again, this doesn’t necessarily mean a sophisticated data platform and toolset – each customer is different);
  2. AI, again, the relevance of AI to each critical capability and the right Ai strategy and platform/tools for the customer is a key output of the process. 

These two areas we pull-out specifically because, at Birchman we believe these are critical to every Enterprise. For some it may well be the conclusion that AI is not (or, not yet) critical, but we will have always done that assessment.

Written by

Pamela Moore                                                                                                                                                    Solution Artchitect                                                                                                                                                    The Birchman Group