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Everything You Need To Know About Business Capabilities And Why They Are Important

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There is demand for IT to allow and assist business transformation at a moment when corporate digitization has advanced and so every project plan is an IT project. Business capabilities are a crucial idea that enables business and IT groups to communicate by identifying what the organization does. But what is it? Why has it become important? Keep reading to learn everything you must know about the business capabilities.

What is a Business Capability?

A business capability is described as an illustration of a necessity within a company.

Business capabilities are an institution’s depiction of its needs and of what it can and will do. They represent the fundamental operations of the company and deconstruct them into functional units that are organized into business capability mappings. They can be divided into smaller capabilities if necessary.

Enterprise architects or company designers can identify and prioritize the IT initiatives that coincide with the company’s needs with the aid of their frequent assessments. Thus, it conducts the market analysis.

What Is An Example Of A Business Capability?

Consider a car rental company for instance. In this situation, an “online reservation” capability may be a great illustration of business skills. This skill is facilitated by one or more applications, such as the mobile app for automobile rentals. Another illustration would be a company’s capability to offer “mortgage loans,” which is supported by an internal program that quantifies loans.

The Importance Of The Business Capabilities

Following are some of the top factors that make business capabilities an important factor to consider:

1. Business Capability is the Foundation of the Strategic Planning.

Business capability is the foundation of the strategic planning business capabilities

Strategic planning is built on corporate competencies. An industry’s strategic plan outlines its long-term objectives and contains resources and action strategies that will assist the firm reach them. An enterprise architect will be enabled to see how business projects will affect their applications and the IT landscape by connecting business strategy with capabilities. It will assist them in organizing the next architectural designs designed to maintain these business capabilities. A business capability is also a type of investment management. So, strategic planning assists in the attainment of organizational goals.

2. Agile Development Experiences With Customers.

Agile businesses are designed with the client in mind. Even if product managers convert business needs into user requirements, which in turn leads to software improvements, they may They do not always have a complete understanding of the value provided to or the experience of the customers. Enterprise architects can codify the delivered value by using value streams. To describe the ideal client experience, they often employ customer journey maps.

3. Rationalization of the Applicant

Due to business expansion or previous acquisitions and mergers, firms frequently have a large collection of apps and other IT resources. Because they only look at costs, many IT firms frequently fail to rationalize their utilization of assets. Companies won’t get rid of a business-critical program just because it’s too expensive!

4. Risk Management for Technology

Organizations and software frameworks that enable applications, including those such as EA libraries, are tied to the application fields themselves, which are connected to company capabilities and business goals. Enterprise architects can quickly comprehend how an outdated technology component affects strategic objectives by keeping track of these technology parts’ end-of-life. This also holds for applications that make use of technologies that are forbidden by company rules.


Linking business capabilities to the implementation of business strategy is essential. Business capabilities are well planned. So, the strategic goals serve as the comprehensive business strategy. As strategic objectives change, it is also simpler to reprioritize projects, particularly in agile organizations. Therefore, business capability significantly contributes to raising income generation.

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