March 10, 2011, 2:57 PM — You might think that technology supports your business, but you're wrong: Technology has become your business. The 21st century reality is that you don't have a business without technology; it has become as integral to the way your business operates as are people, finances, suppliers, business partners, and all the rest. That means it's too risky to build your business and only then look to put supporting digital technology underneath. Instead, business and technology must be designed and built together, as a unified whole - there are simply too many design tradeoffs between the physical and digital aspects of your business to risk doing it any other way. The new mindset is that "your business is embodied in your technology," and this calls for a new approach to business technology architecture and strategy.
Rather than IT's current focus on siloed applications and outsourcing arrangements to support your business, Forrester's Business Capability Architecture starts with the reason you're in business - to produce the best business outcomes for your organization - bringing businesspeople and technology staff together around continually improving how your business achieves its outcomes.
By viewing - and specifically designing - your organization's overall outcomes as the sum total of the outcomes of your business capability implementations, you create a clearer view of your organization as an intricate network of people, processes, technology, and resources (both physical and digital), making it easier to identify areas where application and technology silos lead to broken business outcomes.
For example, social technology may help your customer service business capability, but customer service also needs the benefits of BPM, SOA, event processing, embedded analytics, and more. When your focus is on customer service as a capability, you get above technology silos and capture interrelated synergies from them all, while avoiding the pitfalls of conflicting designs between the various silos.
To recenter your strategy around your business capabilities, answer this series of five key questions:
• What metrics represent your most important top-level business outcomes? Clarity on top-level outcomes is the lens that focuses your organization's success. Across the range of both financial and soft metrics (e.g., customer satisfaction), some metrics have much more correlation with your organization's near- and long-term success than others, and these metrics become the central priority and focus of your business capability design efforts.
• Which capabilities most drive your top-level metrics? Clarity on the connections between top-level and capability-level outcomes narrows and focuses business improvement analysis. For example, if capital spending is a critical top-level metric, opportunities to reduce capital investment for a manufacturing capability become more interesting.