I've started a new engagement to help an Enterprise Services planing team get a handle on where they are there and how much it's going to cost to finish. Enterprise Services is the consolidation of core business processes in centralized organization to reduce cost, increase the leverage of the resources, and unify the delivery of capabilities.
The focus on capabilities is the approach we've taken. This is not the normal starting point. Normally features and functions are planned for these projects. It starts with the "out of the box" features of the ERP system. Customization of the ERP features is next. Requirements are defined and developers make changes.
All this effort is planned by defining the deliverables - the software components specified in the requirements. This approach is implemented in a variety of ways, ranging from simple task scheduling to agile iterative release cycles. The focus on "value" is the current method - although this term is usually too broadly defined. In many of these approaches the concept of "Capability" is not made explicit. The capabilities are pushed Second-Order outcomes. Features and Functions take the first order position. Use Cases are sometimes defined, but they don't state explicitly what capabilities result from the development effort. Or how these capabilities are connected to the strategy of the business - Balanced Scorecard connections for example.
A simple definition of Capability Based Planning is
Planning under uncertainty, provides capabilities suitable for a wide range of challenges and circumstances while working within an economic framework that necessitates choice.
Like all management terminology, this is a nice set of words, but not very useful in practice. Here's a starting set of outcomes:
- Focus on the "possibilities" rather than a set of defined behaviors.
- Define what we need to do to achieve the desired capability
- Define how much of each system component we need to achieve the desired capability
Capabilities versus Functions
Here's an example of the differences between capabilities and functions.
- Function - maintain a list of new employees that need training in the regulatory aspects of the business, train them, and put them to work.
- Capability - deliver a trained cadre of new employees capability of starting work with a minimum (defined in units of measure) in a one week orientation course.
At first glance it looks like these are two views of the same deliverable. Turns out they're different. Functions are "work flow" entities, taking an input and delivering an output. They are necessary for the operation of the business. But functions don't define a capability. The capability to produce trained (initially trained) employees in a specified time frame with defined skills is a capability of the system that makes use of the functions, but requires more than just the functions. It requires an explicit intent on the part of the user to exercise the capability once the functions are present.
Planning for the delivery of capabilities starts with the definition of the desired capability, an understanding of how the capability matures over time and the functions needed to deliver the capability. This makes sense once all the pieces are on the table. But having the capability and planning for the capability are two different things. Planning starts with the assessment of the needed maturity at a point in time. Assessing this maturity is the role of Integrated Master Plan / Integrated Master Schedule. Starting with Program Events, delivering Significant Accomplishments, assessed by Accomplishment Criteria and delivered through Tasks - IMP/IMS provides the planners with the tool to deliver capabilities not just functions.
Here's an example
- Capability - Financial Shared Services Centers Operations
- Significant Accomplishment - 100% of the Tier One vendors submit electronic invoices to the system.
- Accomplishment Criteria - no paper invoices processes for Tier One vendors
- Tasks - install and operate a scanning document management system in the Shared Services Centers to capture and route Tier One vendor invoices
The features and functions of the scanning system are the enabler of the capability. Planning, deploying, and executing the scanning system is a Critical Success Factor, but it is the not the same as the delivery of a capability.
Focusing on capabilities changes the point of view of the system, its planners and its developers.
- There is a vertical connection between each technical component. Scanning, routing, storing, presenting, processes, payment, tracing, reconciliation, closure.
- Risks are trade offs across the business process rather than just in specific technology areas
- With a capability new and unforeseen requirements can be addressed
All of these outcomes are the goal of Agile Project Management's Declaration of Interdependence. Having a set of actionable outcomes enables the promise of DoI.
