How do you differentiate between a Business Function and a Capability?
29 April 2009
Recently I was asked about the concepts of a Business Function and a Capability, and how it is unfortunate that these concepts tend to be blended together.
a) How do you differentiate between these concepts?
b) Is there a value to modeling both, or do you find that organizations that use one tend not to use the other?
My answer is copied below.
I have also often found that people confuse Function and Capability. They are certainly different in my opinion.
Many enterprise architecture efforts don’t really focus much on either of these concepts and instead just focus on modelling business processes, applications and infrastructure.
This is because the Organisation Architecture and Strategic Planning domains are not included with the scope of Enterprise Architecture within their organisations.
However since ArchiMate includes the concept of a Business Function and now TOGAF9 (Capability-Based Planning – http://www.opengroup.org/architecture/togaf9-doc/arch/chap32.html) includes the concept of a Capability so I’d expect more Enterprise Architects to start using both these concepts more than they have previously.
A Business Function is a concept used in the Organisation Architecture domain and represents what work is done by that organisation, organisation unit or business role. An organisation can be designed as a set of Business Functions and usually the structure of the organisation units within an organisation is closely based on the business functions.
Those Business Functions are more stable than the organisation structure itself and often an Organisation Unit or Business Role may be responsible for multiple business functions. A Business Function is only ever carried out by a single Business Role/Organisation Unit within an organisation.
Examples of Business Functions include: Sales, Mаrketing, Supply Chаin Management, Finаnciаl Mаnаgement, Operations, Customer Relationship Management, Product Management, Supplier/Pаrtner Relаtionship Mаnаgement.
A Capability is a description of an ability to do something in terms of expertise and capacity.
It is associated with strategic planning and not the Organisation Architecture or Business Architecture domains. A Capability is delivered through the establishment of a number of different changes usually at together as a group of changes delivered in an iteration.
These changes are likely to include new or changed organisation units, business functions, business processes, business services, application services, application components, infrastructure services, infrastructure components (Nodes etc), business objects, data objects etc.
A Capability is used as the unit of change in strategic portfolios and Capability Increments (TOGAF9) are used in programme and project portfolios.
Examples of Capabilities include: Capability to sell a new Product, Capability for eCommerce, Capability for rapid merger and acquisition activities, Capability to survive the credit crunch, Capability to conduct research, Capability to achieve delivery objectives and be ready for future unknown challenges.
References:
ArchiMate (http://www.archimate.org/ART/) defines a Business Function as:
A business function is a unit of internal behaviour that groups behaviour according to for instance required skills, knowledge, resources, etc., and is performed by a single role within the organisation.
A business function describes internal behaviour performed by a business role that is required to produce a set of products and services. For a consumer the products and services are relevant and the required behaviour is merely a black box, hence the designation: internal.
There is a potential many-to-many relation between business processes and business functions.
Informally speaking, processes describe some kind of ”flow” of activities whereas functions group activities according to required skills, knowledge, resources etc.
Complex processes in general involve activities that offer various functions. In this sense a business process forms a string of business functions.
In general, a business function delivers added value from a business point of view. Organisational units or applications may coincide with business functions due to their specific grouping of business activities.
TOGAF9 defines a Function as:
Function describes units of business capability at all levels of granularity.
The term “function” is used to describe a unit of business capability at all levels of granularity, encapsulating terms such as value chain, process area, capability, business function, etc.
Any bounded unit of business function should be described as a function.
[a Function] Delivers business capabilities closely aligned to an organization, but not necessarily explicitly governed by the organization. Also referred to as “business function”.
TOGAF9 defines a Capability as:
A business-focused outcome that is delivered by the completion of one or more work packages.
Using a capability-based planning approach, change activities can be sequenced and grouped in order to provide continuous and incremental business value.
(Unfortunately in the TOGAF9 meta model at http://tinyurl.com/czrmpj, Capability is shown on its own as an unrelated concept, so I think that there is more work to be done on the TOGAF9 meta model.)
Civil Service Capability Reviews at http://tinyurl.com/cuyta9 has an interesting model of Capability.
CBDI_SAE defines a Business Capability as: The power or ability to perform something of value to your business.
MODAF defines a Capability at: http://tinyurl.com/c5lhaq
MODAF defines a Function at: http://tinyurl.com/cvkkua
Business Motivation Model: In the Business Motivation Model the concept of a Desired_Result is closest to that of a Capability and illustrates that we should measure Capabilities in terms of Goals and Objectives and their measures.
Filed in Archimate, Enterprise Architecture, Enterprise Architecture Meta Model, TOGAF
29 March 2011 at 11:59
For a distilled exploration of functions, capabilities and organisations – in ArchiMate, TOGAF and elsewhere, read “Function!” top right of the page at http://avancier.co.uk
7 June 2011 at 16:02
[…] How do you differentiate between a Business Function and a … Apr 29, 2009 … A Business Function is a concept used in the Organisation Architecture domain and represents what … […]
11 October 2011 at 19:17
That is really attention-grabbing, You’re a very professional blogger. I’ve joined your rss feed and look ahead to in search of more of your great post. Additionally, I’ve shared your site in my social networks
14 August 2012 at 22:25
How many business fuctions do we have? Can you please send them to me via email with definitions please.
29 August 2012 at 7:38
Can we write Business Functions of product developed by the organization, where we can only define its technical specifications which are helping that product to get deploy by the customers ?
10 September 2012 at 17:35
Thank you, this helped me very much for a better understanding of the core concepts of TOGAF.
24 December 2013 at 0:55
Adrian did you steal this from me?!
‘A Capability is a description of an ability to do something in terms of expertise and capacity.’
Joking aside, I have been trying to promulgate the notion of capability as know how + capacity for a while now, but very few people get it, particularly the capacity part. Also the implications of ‘know how’ as being central, also seems to pass people by.
In support.
Best wishes
Ron
15 January 2015 at 13:44
I think your post leaves the key distinction between Business Function and Business Capability unanswered.
TOGAF may use capabilities as units of change, but a capability is not defined as a unit of change. It is something more significant.
I believe business capabilities are abstractions of _what_ an organisation does that are completely divorced from _how_ it chooses to do them. Capabilities exist at many levels of scale, from “Manage Corporate Finance” at a high level, down to “Raise an Invoice” at a lower level.
A Business Function is much as you describe it – it is often a manifestation of an important high-level capability (eg “The Finance Function” might have sole responsibility for implementing the capability to “Manage Corporate Finance”.
So for me the key difference between a Business Function and a Business Capability is that one is an implementation and the other is a useful abstraction. That is why TOGAF finds capabilities are useful as units of change – because their definitions are separate from the way they used to be done and the way they might be done in the future.
24 March 2016 at 16:55
I long ago proposed Capability = Function + target qualities + resources required. But I have never seen a Capability decomposition that was distinguishable from a Functional decomposition, and there really is no need to distinguish them.
For an explanation, read the 6 slides at this link
Click to access TOGAF%20Business%20Architecture%20-%20with%20ArchiMate%20symbols.pdf
24 March 2016 at 21:06
Have to agree with Graham. The ‘capability maps’ that I’ve seen are little more than functional decompositions with a different name. Rather what I believe is trying to be conveyed by ‘capability’ over ‘function’ is more related to differences in ‘potentiality’. E.g. in business ‘funds plus know-how’ equals capability to achieve almost anything, yet this is not a function.
14 February 2019 at 16:24
Precisely . . . “A Capability is a description of an ability to do something in terms of expertise and capacity. ”
Our rendition of this for “decision making re proposed initiatives” is a bit more wordy, but same message “knowledge, information, intuition, wisdom, experience and capacity”
The Nature of Strategic Decision Making
14 February 2019 at 20:40
Yes, ‘know how’ plus capacity, which can themselves often be generated with sufficient monetary funding and time. It’s a pity that TOGAF9 is so far off kilter with its definition. Best wishes, Ron.
16 February 2019 at 15:34
I think it is probably futile to expect a generally accepted definition for a business capability, although I suspect there is rather more consensus around what a business function is.
For me, as a capability mapper, a capability is the separation of the ‘what’ from the ‘how’. It is slightly too simple to say a capability is the ‘what’ and a function is the ‘how’ because they don’t always neatly align, but this seems in the right sort of ball park.
4 January 2024 at 3:22
[…] How do you differentiate between a Business Function and a Capability? […]
4 January 2024 at 4:13
[…] 參考.什麼是任務、活動、流程?.將活動作為任務分配給用戶.業務能力.業務能力定義和範例.能力與業務功能:相同的差別嗎?.您如何區分業務功能和能力?.業務職能與業務能力.業務功能、服務與能力:簡短指南.什麼是業務功能? | 業務功能的範例和定義 […]