How to create and prioritize capabilities for the SAFe framework - Part Two

By Andy Sio
March 6, 2017

In my earlier post, How to create and prioritize capabilities for the SAFe framework - Part 1, I introduced basic information about business architecture and business capability. I also mentioned about how business architects used business capability models to map value streams. In this post, I will show you how to create a business capability model and how we can use the model to make informative decisions on our strategic intents.

Business capability model

The purpose of a business capability model is to help us identify, organize and understand what an organization needs. Again, the model helps us to focus on what not the how. Far too often, folks get way too detailed in the high level strategic discussions because people tend to focus on the how. I’m not saying the “how” is not important, but those discussions should be deferred to the program and team levels in the SAFe framework.

Usually, a capability model is organized as a multi-tier affinity diagram. The following diagram is an example of a core capability model used by a health insurance payer. It represents the core business values that the company provides to its customers.

Source: Barella, Business Value Measurements and the Solution Design Framework

A capability model is a powerful communication tool that business leaders and transformation agents can use to socialize with stakeholders and help team members connect the dots. The model helps everyone in the company to understand what values the organization provides to its customers.

Business Capability Categories

A company has different types of capabilities. Some capabilities such as sales operations are customers focused, while capabilities such as claim workflow are back office supports. It’s important to distinguish and categorize capabilities. Accelare added a distinction in assessment of the capabilities necessary to operative the business by examining the financial impact as well as the customer impact.

Capability Value Contribution

The categorization of capabilities allow business leaders to understand and develop a balance approach for the investment roadmaps. Companies never run out of ideas in spending their investments. The key is to prioritize funding in the right areas.

This graph shows the allocations of business capabilities in the health payer’s model.

In addition to categorizing capabilities, companies can develop and define a set of criterias to systematically evaluate the capabilities. The following diagram shows the assessment of each capability in the “Advantage” capability. The capability with red indicates the areas the company should focus on.

Heat index reporting.

What does it do with Agile and SAFe now?

The SAFe “big picture” is to centralize strategy and promote decentralized decision making. SAFe is a powerful enterprise Agile framework that connects strategy to the very user stories that a developer produces.

At the portfolio level, Enterprise Architect, Epic Owners, and Program Portfolio Management should be informed and educated about the business capability model. Use the model to identify, budget, and prioritize Enabler and Epic for the value streams.

SAFe Big Picture

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Business Value Measurements and the Solution Design Framework.

Capability management in business.

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