All project success starts with knowing what done looks like in unitys of measure meaningful to the decision makers. These units start with effectiveness and performance. These Capabilities are the foundation of defining the technical and operational requirements of the product or service produced by the project. Without the defined capabilities, those requirements have no reason for being
Capabilities‒Based Planning principles include:
- Decisions based on explicit criteria of agency interest, not on compromises.
- Needs and costs considered simultaneously.
- Major decisions made by choices among explicit, balanced, feasible alternatives.
The use of capabilities‒based planning is widely credited for the success of several large businesses, most notably the phenomenal growth of Wal-Mart.
In 1979, K‒Mart was the leading discount retailer in the United States, while Wal‒Mart was a regional discount outlet in the southern United States. K‒Mart produced approximately twice the revenue per store compared to Wal‒Mart. By 1989, Wal‒Mart was the leading discount retailer in the United States, if not the world, and was producing twice the return of K‒Mart.
Some analysts believe that the fundamental difference between Wal‒Mart’s twenty‒five percent per year rise and K‒Mart’s decline is that Wal‒Mart focused on capabilities‒based planning.
Wal-Mart’s goals were simple to define but hard to execute: to provide customers access to quality goods, to make these goods available when and where customers want them, to develop a cost structure that enables competitive pricing, and to build and maintain a reputation for absolute trustworthiness.
The key to achieving these goals was to make the way the company replenished inventory the centerpiece of its competitive strategy.
Capabilities-Based Planning is the Shared Foundation Between Agile and Traditional Project Management Processes
Capabilities‒Based Planning provides guidance on the specific capabilities and levels of capability that will be expected to be developed and maintained.
The key difference between Capabilities‒Based Planning and Requirements Elicitation is that CBP starts with a top-down definition through scenarios, case studies, or Use Cases.
A capability may be delivered with any combination of properly planned and organized work efforts that produce the outcomes needed to fulfill the scenario. ‡
This example describes the increasing Capabilities of a provider network management systems of a Health Insurance company.
This Capabilities Map is also the Product Roadmap for the deployment of incremental and iterative capabilities to process the provider network enrollment and payment disbursement processes based on an ERP system that replaced the legacy system.
Starting with a Pilot project and ending with a full production system.
The Capabilities-Based plan is not a schedule, it’s not a list of features, it’s not a project management plan.
It’s the map to the destination of a full set of capabilities needed to transform the business from legacy applications to ERP based operations.
Here's an example of a map of increasing Capabilities of a Health Insurance Provider Enrollment system:
Effectiveness of Capabilities-Based Planning
- Top down, whole organization process, to break down department silos by shifting from a functional view to a capability view.
- Focuses directly on what an organization needs to do to execute its strategy.
- Provides a map of the organization’s overall capabilities to ensure nothing is missed.
- It directly links initiatives and projects to capability changes and to organization’s objectives.
- Separates wheat from the chaff to determine highest priority capabilities needed to develop related initiatives to clarify and optimize investment.
- Delays solution definition by putting conclusions context of capabilities, opening alternatives rather than incrementing existing solutions.
Provides systematic way to identify change initiatives.
‡ “Concepts, techniques, and tools that support performance budgeting,” LTC Erin Reeder, USA, Defense Resources Management Institute, Naval Postgraduate School, Monterey, California.
† “Competing on Capabilities: The New Rules of Corporate Strategy,” George Stalk, Banyan Global
