I referenced capabilities in my post "Total Addressable Market for Typical and Enterprise Product Managers," but what the heck is a capability, and how does it relate to product managers? While it may be less critical for traditional product managers, enterprise product managers, or product managers focused on internal products and services, need to have a critical understanding of how their products serve business capabilities.
What is a business capability?
There's an entire discipline around business capability management, and much ink has been spilled. If you search the internet it's possible to go down any number of rabbit holes. For example, understanding how capability management fits into the "theory of the firm" or how The Open Group Architecture Framework (TOGAF) utilizes a map of business capabilities to ensure a holistic enterprise architecture. For our purposes, it is sufficient to use a simple definition:
Capabilities are the firm's abilities to do things that are considered valuable (in and by the market).
Its common for large enterprises to organize themselves along the lines of capabilities. For example, one capability of The Coca-Cola Company might be the ability to manufacture soda. Others might include marketing, distribution, sales, vending, and so forth.
Manufacturing soda comes with a plethora of needs and associated costs that enable this capability. These may be served by a product or service, or portfolio of products and services.
The Coca-Cola Company may have a product manager for Inventory Management. That product manager may have a product portfolio that consists of
- Inventory Management Software
- Handheld Scanners and Scanner Management Software
- RFID Tags and RFID Scanners
In this way, products can be aligned to capabilities. This can help in many scenarios that are sometimes murky for enterprise product mangers. It can help draw a line to business value a product provides to the enterprise, clarify key customers, and assist in discovering the total addressable opportunity of a product.
Kommentare