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Business Capabilities

Best Practices to Define Business Capabilities

Effective capability maps follow a set of clear standards that keep them structured, consistent, and usable across the business. Explore the eight most important best practices to guide new mapping efforts or improve existing capability models.

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Business capability maps work best when they follow a clear and consistent structure. They provide a stable view of what the organization must be able to do, supporting strategy, planning, and business–IT alignment.

Without shared best practices, capability models often become inconsistent, overlapping, or too detailed to use.

This page outlines eight proven best practices that help teams improve capability maps that are clear, stable, and actionable.

The recommendations build on fundamentals from the business capability overview, practical instructions on how to create a business capability map, and complement resources such as the library of capability map examples used across industries. 

📚 Related: 2025 Gartner® Magic Quadrant™ for Enterprise Architecture Tools

 

1. Don’t overlap

Capabilities must be mutually exclusive so every function of the business has one clear home. When two capabilities cover similar outcomes, teams cannot assign ownership, maturity levels, or supporting applications without debate.

This is one of the most common issues in both first-time mapping efforts and remapping projects.

Practical example

A global manufacturing company defined both “Order Management” and “Order Fulfillment” as Level-1 capabilities. Teams struggled to place sub-capabilities such as order validation, shipping, and returns. Some business units placed them under Order Management; others placed them under Fulfillment.

The result: inconsistent reporting, double-counted KPIs, and two application owners claiming responsibility for the same system.

After a MECE review, they restructured:

  • Order Management focused on order capture, validation, and changes.
  • Order Fulfillment covered warehouse pick/pack/ship, delivery, and returns.

Each sub-capability now fit unambiguously into one place.

Capability examples

  • Good separation:
    • Customer Management (relationship, insights, service)
    • Marketing Execution (campaigns, lead generation)
  • Bad overlap:
    • “Customer Engagement” and “Customer Experience” both trying to cover service, support, and feedback loops.

Cleaning up overlaps early prevents major conflicts later when capabilities are linked to applications and users or used for heat maps, rationalization, or roadmap planning.

 

2. Define “what,” not “how”

A capability describes what the business must be able to do — not the activities, workflows, or systems used to do it. This distinction keeps the capability map stable over time, even as processes change, teams reorganize, or applications are replaced.

Practical example

A financial services company initially defined capabilities such as “Process Customer Loan Applications” and “Perform Credit Checks in System X.” These were written as activities tied to specific systems and teams.

When the company introduced a new credit decisioning platform and redesigned parts of the loan process, the capability map became obsolete overnight.

During remapping, they shifted to true capability definitions:

  • Loan Origination
  • Credit Risk Assessment
  • Account Servicing

These terms remained valid regardless of process steps or technology changes. The map then served as a stable foundation for the entire lending transformation program.

Capability examples

  • Good “what”:
    • Product Development (ability to design and evolve offerings)
    • Customer Insights & Analytics (ability to understand customer behavior)
  • Bad “how”:
    • “Run Design Sprints and UX Workshops”
    • “Generate BI Reports in Tool Y”

Clear “what” statements make the capability map more durable, more strategic, and easier to use for portfolio assessments or alignment with enterprise architecture disciplines like business architecture.

 

3. Plan for the long-term

A capability map should remain stable for years, even as processes, systems, and organizational structures evolve. Capabilities describe enduring business functions, so constant restructuring or renaming defeats the purpose. Long-term stability allows the map to support strategy, portfolio management, and transformation initiatives without needing a full rebuild each time something changes.

Practical example

A global retailer remapped its capabilities every time a reorganization occurred — for example, when the e-commerce unit moved under Marketing, they merged “E-Commerce Operations” into “Digital Marketing.”

The problem? Three years later, the retailer’s e-commerce function operated independently again, and the capability model no longer matched reality. IT systems, KPIs, and investment cases were misaligned because the foundational structure kept shifting with org charts.

During a subsequent ERP modernization effort, they adopted stable, business-model-driven capability definitions:

  • E-Commerce Management
  • Marketing Execution
  • Customer Management

These remained unchanged through later reorganizations, allowing the map to serve as the anchor for technology planning and transformation governance.

Capability examples

  • Good long-term capabilities:
    • Supply Chain Planning
    • Customer Service Management
    • Financial Controlling
  • Poor long-term definitions:
    • “Regional APAC Supply Chain Team Activities”
    • “Marketing Automation in Tool Z”

Capabilities should only be updated if the business model changes — not because teams, processes, or applications shift. This stability is what makes capability maps useful across strategic planning, application rationalization, and initiatives like pace-layering or roadmap creation. 

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4. Keep capabilities consistent

A capability map works only when the entire organization uses the same naming, same definitions, and same structure. Inconsistent terminology across business units leads to duplicated work, incompatible assessments, and conflicting interpretations of what each capability covers. Consistency allows capabilities to become a shared reference across strategy, architecture, finance, and transformation teams.

Practical example

A multinational company allowed each region to define its own capability labels. Europe used “Customer Management”, North America used “Customer Operations”, and APAC used “Customer Experience Management.”

Although they described nearly the same scope, the difference in naming caused major issues:

  • Maturity scores could not be compared across regions.
  • IT could not create a unified capability–application matrix because each region mapped applications to different labels.
  • Global COOs disagreed on which region was responsible for customer analytics, because no two regions used the same structure.

During a global standardization initiative, they aligned on one set of capability names and definitions. This enabled unified reporting, a consolidated application landscape view, and consistent strategic planning across markets.

Capability examples

  • Good consistency:
    • Order Management used globally, with shared definitions and sub-capabilities.
    • Workforce Management applied the same way across HR, regional teams, and shared services.
  • Bad inconsistency:
    • Region A uses “Sales Enablement,” Region B uses “Commercial Excellence,” Region C uses “Revenue Acceleration” — all describing similar outcomes.

Standardizing capability names early prevents misalignment later when capabilities are tied to transformation programs, operating models, or application portfolios.

 

5. Start with seven to ten top-level capabilities

A clear capability map begins with a manageable number of Level-1 capabilities. Seven to ten is usually the right range to describe the business at its highest level without collapsing important differences or adding unnecessary complexity. Too few creates categories that are too broad to be useful; too many make the map harder to understand and maintain.

Practical example

A logistics company originally defined 18 Level-1 capabilities, including Transport Scheduling, Carrier Contracting, Route Optimization, Shipment Tracking, and Delivery Management as separate top-level items.

During portfolio discussions, executives struggled to see the big picture. IT couldn’t use the map for rationalization because every capability was so narrow that nearly every application mapped to multiple Level-1 domains.

When the organization remapped its structure, they grouped the many fragmented items into broader, strategic Level-1 capabilities such as:

  • Logistics Planning
  • Transportation Execution
  • Delivery & Customer Service

This allowed the team to analyze capabilities holistically and identify meaningful areas for investment, modernization, and simplification.

Capability examples

A strong Level-1 structure might include:

  • Customer Management
  • Product & Service Development
  • Supply Chain Management
  • Sales & Marketing
  • Finance & Controlling
  • Workforce Management
  • Technology & Data Management

Attempting to elevate operational or departmental activities (e.g., Accounts Payable, Quality Assurance, CRM Operations) to Level-1 creates a map that is too detailed at the top layer and less effective for strategic alignment.

A small, well-defined set of Level-1 capabilities creates the foundation for a readable and stable enterprise capability model.

 

6. Don’t go too deep

A capability map should provide enough structure to support decision-making without turning into a process catalog. Most organizations achieve the right balance with two or three levels. Going further reduces clarity, increases maintenance effort, and distracts teams from the strategic purpose of capability mapping.

Practical example

A regional insurance provider expanded its map to six levels because each department wanted its operational tasks represented. Under Claims Management, they listed steps such as initial triage, review documentation, assign adjuster, update claim file, and issue payout.

Within a year, the map became difficult to maintain. Every process improvement, team change, or system update triggered dozens of edits. When the company attempted to link applications to capabilities, they couldn’t tell which of the detailed levels should be used for rationalization or reporting.

During a remapping effort, they collapsed the lower layers and kept only meaningful levels:

  • Claims Management (L1)
    • Claims Intake (L2)
    • Claims Assessment (L2)
    • Claims Settlement (L2)

These broader capabilities were stable, strategic, and compatible with both business and IT portfolio discussions.

Capability examples

Appropriate depth (L1 → L2 → optional L3):

  • Procurement
    • Supplier Sourcing
    • Contract Management
    • Purchasing & Ordering

Overly detailed depth (turning into processes):

  • “Approve supplier quotes”
  • “Generate purchase requisitions in System A”
  • “Update PO line items after negotiation”

Limiting depth ensures the map is useful for planning, assessments, and linking to applications — without becoming a workflow repository or operational manual.

7. Collaborate

Business capability mapping only succeeds when it is co-created by business and IT stakeholders. Collaboration ensures that the map reflects real operational needs, has strategic relevance, and gains the buy-in required for use in planning, governance, and transformation programs. When created in isolation, capability maps often fail to gain adoption.

Practical example

A global pharmaceutical company tasked its enterprise architecture team with building a capability map on its own. The result looked structurally correct, but business leaders did not recognize the terminology or agree on ownership. During portfolio planning, departments ignored the map entirely and continued using their own models.

The company restarted the effort using collaborative workshops that included:

  • Business executives (for strategic intent)
  • Process owners (for operational insight)
  • IT and EA teams (for structure and governance)

The revised capabilities — such as Clinical Trial Management, Regulatory Compliance, and Manufacturing Quality — were defined in language the business trusted. These sessions also clarified ownership and became a key input for ERP transformation.

Capability examples

Capabilities that benefit heavily from collaboration include:

  • Customer Management — Sales, Marketing, and Service each contribute unique perspectives.
  • Product Lifecycle Management — Requires alignment between R&D, Operations, and Quality.

Cross-functional involvement ensures capabilities represent how the business actually creates value, not how one department prefers to describe it.

 

8. Think strategically

A capability map should always support strategic decision-making, not just documentation. Thinking strategically means using capabilities to understand where the business must evolve, which functions need investment, and how technology and processes should adapt. When capabilities are tied to strategy, the map becomes a practical tool for transformation, prioritization, and long-term planning.

Practical example

A consumer goods company built a capability map but never connected it to strategic priorities. As a result, the map was rarely used outside the architecture team.

When the company launched a digital commerce initiative, they initially focused on system upgrades instead of strategic capabilities. Only after revisiting the map did they realize that E-Commerce Management, Digital Marketing, and Customer Analytics were all low-maturity capabilities holding back growth.

By assessing these capabilities against the new strategy, the company identified clear priorities: enhancing customer insights, modernizing the commerce platform, and strengthening digital operations. The capability map shifted from a static artifact to a guiding framework for investment and transformation.

Capability examples

Capabilities typically influenced by strategy include:

  • Innovation Management — critical when entering new markets or launching new product lines.
  • Data & Analytics Management — central to any digital, customer, or AI strategy.
  • Supply Chain Resilience — relevant when strategic priorities focus on efficiency, risk mitigation, or global scaling.

Strategic thinking ensures capability mapping is more than classification — it becomes a bridge between where the business wants to go and how the organization must evolve to get there.

 

How to embed best practices into governance?

A capability map only delivers long-term value when it becomes part of the organization’s planning and governance routines.

After the initial mapping exercise is complete, teams need clear ownership, consistent updates, and integration with ongoing transformation programs. Embedding the map into governance ensures it remains accurate, strategic, and actively used across business and IT.

  • Assign ownership and maintenance cycles
    Every capability should have a clearly defined business owner responsible for its definition and scope, while enterprise architecture typically manages overall structure, alignment, and updates.
    Establishing ownership makes the capability map a living model rather than a one-time project. Most organizations review and adjust their map during annual strategic planning cycles or when major business changes occur, such as entering a new market or restructuring operations.
  • Integrate capability mapping into transformation programs
    Capability mapping supports large-scale initiatives by providing a consistent view of what the business needs to achieve. Programs such as ERP modernization, post-merger integration, operating model redesign, or application rationalization benefit from using capabilities as the anchor layer that connects strategy to execution.
    This approach aligns business priorities with technology decisions, as described in the practical guide on how to create a business capability map.

  • Use EA platforms for consistency and updates
    Enterprise architecture tools like SAP LeanIX help operationalize the capability map by linking it to applications, users, processes, and transformation roadmaps.
    This centralization enables teams to maintain a single authoritative version of the map, perform capability assessments, visualize gaps, and conduct impact analysis when applications change.
    As a result, governance decisions gain transparency and consistency over time.

 

Common mistakes to avoid

  • Over-engineering the hierarchy: Going too deep turns capabilities into process descriptions. Three levels are usually enough for useful analysis and planning.
  • Mapping based on organizational structure: Org charts change frequently; capabilities should remain stable. Designing around departments makes the map obsolete quickly.
  • Confusing systems or projects with capabilities: Terms tied to tools or initiatives — like “CRM System Management” or “Digital Transformation Program” — are not capabilities.
  • Creating the map in isolation: A map developed without business input rarely gains adoption. Co-creation ensures definitions match real responsibilities and strategic needs.

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Best Practices to Define Business Capability Maps

See how IT and business align with a complete overview of your business capability landscape.

  • Whether you are from the banking or insurance industry, automotive or logistics industries or others, this generic business capability map is the perfect start point!
  • See mapping examples and model your own business capabilities!
  • Additionally, we have added tips and best practices on how to get started with business capability maps and to create a complete overview of your business capability landscape.
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FAQs

What is a business capability map?

A business capability map is a structured view of what an organization must be able to do to execute its strategy. It organizes core functions into a consistent hierarchy and serves as the foundation for business architecture, planning, and transformation. A detailed introduction is available in the overview of business capabilities.

Creating a capability map involves defining Level-1 capabilities, expanding them into sub-capabilities, ensuring they are non-overlapping, assessing performance, and linking them to applications and users. The step-by-step approach is described in the guide on how to create a business capability map.

Business capability mapping is the practice of identifying, structuring, and visualizing the key abilities a business needs to operate and achieve its goals. It helps align strategy, processes, and IT systems and is a core discipline within business architecture.

Teams map capabilities by identifying core business functions, defining their outcomes, grouping them into levels, and validating that the structure is complete and non-overlapping. Workshops with business and IT stakeholders are typically used to build and refine the model, as explained in the practical guide on business capability mapping.

Templates are created by defining a standard set of Level-1 capabilities, naming conventions, and hierarchy rules that can be reused across domains or business units. Many organizations adapt industry examples to ensure consistency and comparability; see the collection of business capability map examples and templates for reference structures. 
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