Business Capability Modelling
We use business capability modelling to assist clients in understanding how their business works and where they can make decisions to strategically improve systems, operations and ultimately investments using this knowledge.
Business capability modelling (BCM) is a method for documenting an organization’s capabilities – what gets done, not how – that helps people to understand the consequences of business plans and decisions by visualizing the capabilities that are impacted by changes in the business.
Once a business capability model is built, we can use it to help clients:
- Evaluate the impact of a strategy change on existing capabilities – To identify how changes will impact existing capabilities, whether any new capabilities are needed, and whether any old capabilities are no longer necessary.
- Manage ongoing operation of a capability – Demand and financial models can be used to estimate the impact of changes in planning assumptions on the business processes, people and physical assets associated with a capability.
- Support merger and acquisition activity – To evaluate acquisition targets and any overlap between target and acquirer. Or, conversely, to identify the processes, people and assets that would be lost through a divestiture.
Evaluate investments across capabilities – By knowing the returns generated by each capability, managers can focus investments on the highest performing capabilities and restrict investment in lower performing capabilities.
Case Studies of Our Business Capability Modelling Work
Using BCM to Understand Industry Change
Presenting Problem: Since the Great Recession of 2008 the insurance market has changed considerably. A major insurance player wanted to understand how these changes had or would impact their business and where they should be focusing infrastructure investments as a result.
NLG Participation: A partner and senior consultant (both with business and IT architecture expertise) were brought in and business capability modelling was chosen as the means to develop an understanding of how things had changed, and develop the basic business architecture on which to base new technology architectures. Working closely with company executives over two years, the NewLink team facilitated modelling of the whole division without dramatically affecting its business operations.
Outcome: The conceptual modeling of the firm’s core business helped to expose the fundamental functional relationships that changed when the organization shifted to ‘liability-driven investing’ as their asset liability management focus and a more structured management of risks, including ‘Enterprise Risk Management’. Modelling the essential capabilities – their boundaries, relationships, and dependencies – revealed the incremental value of each capability in reaching the division’s goals.