June 2, 2020

Business functions vs services vs capabilities: a short guide

Business functions vs services vs capabilities: a short guide

Continuing my studying of solution architecture I ran into the terms of services and capabilities from the business perspective and I wanted to enhance my understanding there as it is crucial for a successful SA.

A classical definiton of a business capability is the following:

A business capability is an abstraction of a business function, answering the question what a company needs to be able to do to be successful[Man12]

Business capabilities consist of the Elements which include Processes, People and Technology. Business capabilities are important as you can map them and identify the ones which are essential for the success. Should the business done that, it can also put new capabilities to support the strategic vision.

For example, scheduling a flight is a primary business capability for an airplane company. Supporting an IT systems which helps to do that is also a capability.

Business function on the other hand is

an actual activity performed by the enterprise[ec].

These activities either yielding the income themselves(core functions) or help others functions to do that(support functions).

As for the business services, those are

the business functions performed by the enterprise for another enterprise and or public administration.

Essentially, the business services do not create a tangible product, but perform some work, e.g. fixing the roof of your office.

For a Software Services Company the actual software designing, development, testing and supporting are the services it provides.

As for the customers for the business services, they should be external to the service itself, but not necessarily to the enterprise. Same for the capabilities, services have the expertise, the technology and the organization(people) to execute it. The capability for that matter can deliver the service.