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Business Capabilities: A Systematic Literature
Review and a Research Agenda
Tyron Offerman1,2, Christoph Johann Stettina1,3, and Aske Plaat1
1LIACS, Leiden University, Niels Bohrweg 1, 2333 CA Leiden, The Netherlands
2Capgemini Netherlands, P.O. Box 2575, 3500 GN Utrecht, The Netherlands
3Centre for Innovation, Leiden University, Schouwburgstraat 2, 2511 VA The Hague, The Netherlands
Abstract—The omnipresent need for business transformations,
be it digital, agile, or lean, forces organizations to make good
choices regarding their optimal business capabilities. Business
capabilities can provide the link between strategy (the ’why’)
and implementation (the ’how’). Currently, a comprehensive view
on business capabilities is missing. We conducted a systematic
literature review on business capabilities. We identified 720
scientific studies, of which 20 were analyzed in-depth. In this
review, we investigate how business capabilities are defined, what
business capability frameworks are available, and what future
research has been suggested for business capability research.
From this literature review emerges a new definition for business
capabilities, an extensive analysis on the state of art in business
capability research, and a potential research agenda for future
research.
Keywords—Business Capabilities, Business Capability frame-
works, Capability-Based View, Systematic Literature Review, Infor-
mation and Communications Technology (ICT)
I. INTRODUCTION
In this age of increasing change, organizations need to rein-
vent their business capabilities frequently in order to survive.
Ongoing transformations such as the shift towards digital [1]
and agile ways of working [2] require organizations to un-
derstand and assess their capabilities to make good strategic
choices. Organizations need to decide on ‘how’ activities are
performed [3], and ‘what’ activities are performed [4], [5] —
the latter often referred to as ‘business capabilities’.
After decades of scientific work a comprehensive view
on business capabilities is missing [6]. As of yet there is no
agreed upon definition of business capabilities. Wißotzki [6]
notes that existing literature is (1) fragmented, (2) lacks clear
categorization of capability types, and (3) no overarching view
across different capability types exists.
In order to address this situation we have performed a
systematic literature review. Based on an original selection of
720 articles, we provide an overview of scientific literature on
business capabilities. Our main contribution is:
•an extensive analysis on the state of art in business
capability research
•a focused and aggregated definition for business ca-
pabilities
•a potential research agenda for future research
In the remainder of this article we work towards an
extensive overview of business capability research. In section II
the relevant literature is presented. We provide a brief overview
of the history of business capability research, followed by
an overview of related concepts, and an overview of related
literature reviews. The objective of this research is presented in
section III. This literature review follows a systematic literature
review approach [7]. Section IV details the approach we used
for this paper. The results are presented in section V. In section
VI we discuss the definitions of business capabilities, the exist-
ing business capability frameworks, and the potential research
agenda. In section VII we answer the research questions and
state our contributions.
II. BACKGROU ND A ND R EL ATED W OR K
The notion of business capabilities has been on the agenda
of researchers and professionals for a long time already. It has
been a topic of discussion, because of its role in discovering
the sources of an organization’s competitive advantage [8].
Surprisingly, a clear and agreed upon definition is missing for
business capabilities [6].
Capability research in business environments dates back to
1987 when Ulrich introduced the term organizational capabil-
ity [13]. His main goal was to introduce people management
as a fourth mean to create competitive advantage in addition
to financial, strategic and technological management. Subse-
quently, specific types of capabilities have been introduced
in literature, such as enterprise architecture capabilities and
dynamic capabilities [6]. One particular type of capabilities
are so called ‘business capabilities’, the topic of this paper.
Business capability research has its origins in two dom-
inant literature streams, namely the Resource-Based View
and enterprise architecture. Prior to Ulrich, the concept of
activities/abilities crossing operating divisions was already
mentioned in the Resource-Based View (RBV) of the firm [12].
In RBV research, capabilities refer to a bundle of skills and
the knowledge that is strategically important to manage assets
and coordinate activities effectively [8].
Enterprise architecture research describes the notion of
business capabilities as the combination of process, technology,
economic goods and persons [14], [15]. Business capabilities
are also a key component of The Open Group Architecture
Framework (TOGAF) [16], which is extended by Barroero et
Concepts Dictionary Literature
Capabilities the facility or potential for an indicated use or deploy-
ment [9]
the capacities or abilities within a firm, which can be linked
together as business processes, in order to enable a specific
purpose or outcome [4]
Skills the ability to use one’s knowledge effectively and readily in
execution or performance [9]
N/A
Competences the quality or state of being competent; having requisite or
adequate ability or qualities [9]
Competences are the set of skills and production tech-
niques [10]
Processes series of actions or operations conducing to an end [9] the routines or activities of an organization [11]
Resources a source of supply or support :an available means [9] (tangible and intangible) assets which are tied semi-
permanently to the firm in the RBV-theory [12]
TABLE I: Related concepts of business capabilities
al. to make the bridge to the data, application, and technology
architecture [17].
As of yet these two research streams have not aligned
into a converged and comprehensive view on business capa-
bilities. This results in confusion and misinterpretation when
discussing business capabilities. In this paper we provide a
converged definition and view on business capabilities.
A. Capabilities, skills, competences, processes and resources
Business capabilities are closely related to the concepts of
skills, competences, processes, and resources. Table I shows
an overview of the definitions of these concepts from the
Merriam-Webster dictionary as well as from literature. Skills
refer to the abilities of persons, while capabilities, processes,
and resources refer to organizational components. Compe-
tences comprises of both the personal and organizational
elements.
The Merriam-Webster dictionary [9] provides three defini-
tions of capabilities, namely (1) ”the quality or state of being
capable”, (2) ”a feature or faculty capable of development”,
and (3) ”the facility or potential for an indicated use or
deployment”. There is also a distinction in the essence of the
definitions. The first definition refers to the level of capability,
while the latter two definitions refer to the availability of
a capability. This difference also adds to the confusion on
(business) capabilities.
B. Understanding of business capabilities in previous reviews
To further understand and determine the current state of
art of business capabilities, we explored academic literature
for reviews. Surprisingly, we could not identify any literature
reviews specifically on business capabilities. We did identify
three reviews that are closely related, namely: (1) Wißotzki’s
review on capability research [6], (2) Barreto’s review on
dynamic capabilities [18], and (3) Wu and Liu’s review on
E-business capabilities [19]. We now summarize these three
reviews.
An overview of capability research was given by
Wißotzki [6]. In total Wißotzki identified 184 relevant ar-
ticles in the period 2000 to 2014, by using ‘capability’
and ‘capabilities’ as search terms. Wißotzki found that re-
search fields were very diverse. Therefore, he categorized
them into 8 research subjects, namely; Business Strategy
Management, Software Development, Knowledge Manage-
ment, Project Management, Architecture Management, IT-
Management, Supplier and Contract Management, and De-
velopment and Assessment processes. Within these research
subjects, he categorized five capability types, namely Dynamic
Capabilities, Core Capabilities, Business Capabilities, EAM
Capabilities, and IT-Capabilities. The first capability type is
an external capability, while the latter four refer to the in-
ternal operations of the organization. According to Wißotzki,
capabilities can best be described by the following elements:
resource, (enterprise/business) context, goals, processes, infor-
mation/knowledge, and role/actor. He states future work is still
required to further define a clear categorization of capability
types.
Barreto [18] found 1534 articles that mentioned ‘dynamic
capabilities’ in the period from 1997 to 2007. He identified 40
articles that were published in leading management journals.
He found differences in the conceptualization of dynamic
capabilities, through the definitions of dynamic capabilities by
several authors. Key contributors to these differences were: the
nature of dynamic capabilities (ability versus capacity), and the
outcomes of dynamic capabilities (direct versus indirect effect
on performance). These differences also lead to Barreto stating
that the dynamic capabilities approach is not yet a theory.
Barreto summed the literature review up as that even though
there is a large body of knowledge on dynamic capabilities,
dynamic capability research has been disconnected.
Wu and Liu [19] performed a systematic literature re-
view on E-business capability research. They found that E-
business capability research is divided into three streams:
innovation diffusion model, net-enabled theory, and resources
complementary theory. Wu and Liu state that existing literature
on E-business capabilities provide a better insight in the
relationship between E-business technology and organizational
performance. However, they found that E-business capability
research is mainly focused on the acceptance of the systems.
They concluded that E-business capabilities is the driver of the
success of E-business strategy by linking investment and value
of E-business technology.
III. OBJECTIVES OF THIS REVIEW
Although many academic, as well as professional, literature
uses the term business capability, it remains vague what is
meant. Currently, a comprehensive view on business capabil-
ities is missing. Existing literature [6] is (1) fragmented, (2)
lacks clear categorization of capability types, and (3) has no
overarching view across different capability types. Barreto [18]
describes that, for dynamic capabilities, as the literature being
disconnected. This is hindering further research.
The goal of this research is to identify the current state of
art in business capability research. To reach this goal, we pose
the following research questions:
1) How are business capabilities defined?
2) What frameworks are discussed in academic literature
to assess or improve business capabilities?
3) What future research has been proposed in the field
of business capabilities?
IV. REV IE W ME TH OD
This systematic literature review is based on the guidelines
provided by Kitchenham [7]. Systematic literature reviews
aim at providing trustworthy, and verifiable evaluation of an
existing research topic using a rigorous methodology. Follow-
ing the guidelines, we organized the review in three stages:
(1) protocol development, (2) conducting the review, and (3)
analysis and reporting. In this section, we first present the
search strategy. Second, the inclusion and exclusion criteria
for the different stages are presented. Third and last, we detail
out the data extraction and analysis process.
A. Search strategy
Based on our research questions, we created and tested
search terms. The search key is decomposed as follows: the
main concept — business capabilities, the scope – frameworks
and models, the usage, and the relevant literature streams. The
relevant literature streams is based on the segmentation for
capabilities as identified by Wißotzki [6]. We identified the
selected streams as most relevant for business capabilities.
We used the following search terms, each combined using
an AND operator:
•(“business capability” OR “business capabilities”)
•(map OR model OR framework OR classification)
•(improvement OR assessment)
•(“Business Strategy Management” OR “Architecture
Management” OR “IT Management” OR “Business
and IT Alignment”)
B. Inclusion and exclusion criteria
In the first stage we excluded titles that were clearly not
related to this review. If there was doubt whether an article
should be excluded based on its title, the article was always
included for the next stage. We also cleansed the list from
duplicates and non-English literature in this stage. In the
second stage we collected the abstracts of these articles. We
excluded articles of which the abstract did not clearly refer to
any capability type. In the third and last stage, we read and
conducted an in-depth analysis of the articles which referred
to business capabilities in their abstract.
C. Data extraction and analysis
We entered the search key into Google Scholar in January
2016, which resulted in 720 articles. The citations of these
articles were imported into and managed in Mendeley. We ex-
ported the citations, via JabRef, to Excel. For each subsequent
stage, separate Excel sheets were created.
In the first stage we cleansed the articles and removed
articles based on their title. This yielded a result of 355 articles.
In the second stage we identified 103 articles that referred
to a capability type in the abstract. We categorized each of
these 103 articles to the capability type that was the focus of
the abstract (e.g., including dynamic capabilities, E-business,
enterprise architecture, and organizational capabilities). For
these 103 articles we collected the full documents. Per capa-
bility type, we parsed the PDF documents with QDA Miner.
We used the QDA Miner addon Wordstat to text mine the
articles in order to determine word distribution. In Wordstat
we used substitution, so that conjugations such as capability
and capabilities are counted as the same word, and we used
Wordstat’s standard exclusion list, so that words such as ‘and’
were excluded.
Twenty articles referred to business capabilities in their
abstract. In the third stage we used an Excel-based data
extraction form [20], to collect the relevant information for
our research from these 20 articles. We extracted information
on study description, research design, and study findings. As
part of the study description we retrieved the keywords, the
journal or conference, year, the authors and their institutes, and
the research field. Research design section was used to capture
the study aims, design of the study (quantitative/qualitative),
data collection, and the classification of papers [21]. Study
findings comprised the definition of business capabilities, the
findings and conclusions, the validity, the relevance to practice
and academia, and future research.
V. RESULTS
In this section we present the results of our analysis.
First, we present the authors and institutes. First, we give an
overview of capability types. Second, we present the defini-
tions of business capabilities and other capability types. Third,
we provide an overview of business capability frameworks.
Towards the end, we show the identified future research.
A. Overview of capability types
In stage 2 of our systematic literature review, we reviewed
355 abstracts. In 103 abstracts a capability type was mentioned.
In this phase we identified other capability types next to
business capabilities. Only 9% of the 103 abstracts focused
solely on business capabilities, as shown in Figure 1. Whilst
40% of the 103 abstracts mentioned IT capabilities and 12%
dynamic capabilities. E-business capabilities, organizational
and enterprise architecture capabilities were mentioned, re-
spectively, in 6%, 5% and 4% of the abstracts. The other
category, which comprises 24%, contains capabilities type
that were mentioned less than four times, such as strategic
capability or team capabilities.
B. Research question 1: How are business capabilities de-
fined?
In this subsection we present the definitions of business
capabilities and the other capability types. In Table II we have
listed the definitions per capability type, the source, and the
emphasis of the definition. Per capability type we have sorted
the definitions based on the number of articles that referred to
the definitions.
Fig. 1: Classification of capability types
There is no dominant definition of business capabilities
or a common emphasis on what business capabilities are.
Homann [22] and Wißotzki [6] even contradict each other in
their view on resources as part of the definition of business
capabilities. Homann states that capabilities are regardless
of the resources, while Wißotzki includes resources as an
element of a business capability. Although there is also no
dominant definition of E-business capabilities, the emphases of
the definitions are closely related. Key concepts are Internet,
resources, and value. enterprise architecture capabilities have
one dominant definition, but this definition has been proposed
by the same author, namely Wißotzki.
Dynamic capabilities and IT capabilities both have one
dominant definition and all of the definitions emphasize com-
mon concepts. Six articles referred to the definition of dynamic
capabilities by Teece et al. [23]. This definition emphasizes
competences and the changing environment. The other defi-
nitions emphasize mainly on routines and resources, with the
context of change. Four articles on the topic of IT capabili-
ties referred to the definition by Bharadwaj [24]. Bharadwaj
emphasized resources, infrastructure, skills, processes, and
competitive advantage. Other definitions emphasized routines,
strategy/management, and value. Organizational capabilities
also has a dominant definition, but only one article within our
scope referred to that definition.
In our data there are two key distinctions between the
definitions, namely the view on resources and competitive
advantage. Beimborn et al. [4] does not refer to resources as
being part of a capability. In contrast to that, Bharadwaj [24]
and Wißotzki [25], [6] emphasize the role of resources in
their definitions of, respectively, IT and business capabilities.
Beimborn et al. [4] also does not make a judgement of value in
his definition of capabilities. In contrast to that, Bharadwaj [24]
emphasizes the competitive advantage of IT capabilities. Thus,
there is no alignment in the definitions among the different
capability types.
Frequency of words per capability type. Using a text-mining
approach, we identified the frequency of words used in the
articles per capability type. This resulted in a top 50 of most
frequent words. We compared this top 50 per capability type, to
see which words overlap and which words are only mentioned
per capability type. Table III shows the (1) overlap of words for
each capability type , and (2) the words only used in articles
the specific capability types.
C. Research question 2: What frameworks are discussed in
academic literature to assess or improve business capabilities?
In this subsection we present the identified business ca-
pability frameworks. When analysing the articles in-depth,
we noticed almost no specific frameworks were mentioned.
Only Vermeulen et al. [58] provided a list of business process
capability frameworks. Therefore, we did an additional search
on ”business capability framework” in Google Scholar to
identify any frameworks that we missed. Table IV shows the
list of identified capability frameworks. We identified seven
capability frameworks. Two of these can be categorized as
business capability frameworks [59], [16]. The other ones can
be categorized as process frameworks [60], maturity mod-
els [61], [62], and e-business capability frameworks [63], [47].
We found two business capability frameworks in liter-
ature [59], [16]. Brits et al. [59] provided a conceptual
framework for modeling business capabilities and a capability
construction feedback loop. In their research they propose that
business capabilities are modeled over perspectives (external
environmental knowledge, ends, international environmental
knowledge, and means) and abstractions (elements of guid-
ance, business processes, resources, technology, and people).
TOGAF’s capability based planning [16] provides an approach
on how to model business capabilities in the business domain
of an enterprise architecture. As the capability based planning
is part of the overall enterprise architecture methodology, it
provides a good overview of how to get from strategy, to
capabilities, to implementation (building blocks).
D. Research question 3: What future research has been pro-
posed in the field of business capabilities?
In this subsection we present an overview of the future
research that has been proposed in the articles. We identified
three main directions of future research, namely: (1) future
research into frameworks, (2) future research into finding
empirical evidence, and (3) future research into related fields.
The connection to other fields is the result of the aggregation
of the individual fields (the rows below). The mapping of the
articles and future research is show in Table V.
In four articles to further improve proposed frameworks
and to converge frameworks within this field. In 10 articles it
was proposed to find (additional) empirical evidence for the
findings. In 7 articles, authors identified the relation to other
fields and proposed to further investigate these relations.
VI. DISCUSSION
In this section we will discuss the current state of business
capability research. First, we will discuss the definitions of
business capabilities and delineate the definitions of the other
capability types. Second, we will discuss the existing business
capability frameworks. Third and last, we will propose a
research agenda.
Definition Source Cited in Emphasis
Capabilities
Capabilities are what the business does (e.g. pay employee or ship product) regardless of what
resources being used or how those resources are configured (e.g. whether it is in-sourced or
outsourced, or manual or automated).
Homann [22] [26] what, business, regardless of
resources
A capability represents a manageable unit of change and supports incremental development
through an explicit distinction between systems and their capabilities
Becker et al. [27] [27] change and development
Business Capabilities
A particular ability or capacity that a business may possess or exchange to achieve a specific
purpose or outcome.
Homann [22] [26] ability, capacity, purpose, and
outcome
Referred to a corporate business goal the aim of business capabilities is to activate, use and
maintain resources for specific business activities
Wißotzki [6] [6] business goal, resources, and
activities
Dynamic Capabilities
The firms ability to integrate, build, and reconfigure internal and external competences to
address rapidly changing environments.
Teece et al. [23] [28], [29], [30],
[31], [32], [33]
competences, changing envi-
ronments
Organisational and strategic routines by which firms achieve new resource configurations as
markets emerge, collide, split, evolve, and die
Eisenhardt and Mar-
tin [34]
[30], [35] routines, configurations, strat-
egy
The capacity of an organisation to purpose fully create, extend, or modify its resource base Pult and Manwani [36] [36] resource base
IT Capabilities
The ability to effectively combine and apply IT resources, including IT infrastructure and
human IT skills, to organizational processes, is a source of competitive advantage
Bharadwaj [24] [37], [38], [39],
[40]
combine, resources, infrastruc-
ture, skills, processes, compet-
itive advantage
The ability to execute stable and repeatable patterns of IT management activities in support
of value creation.
Curley [41] [41] patterns, management activi-
ties, value
The focused strategic deployment of IT resources and competencies in support of the
organizations goals in summary, it is what the IT organisation can collectively do for the
enterprise.
Curley [42] [42] strategy, resources, competen-
cies, goals
An organizations capacity to utilize and structure information in a meaningful fashion that
supports decision making
Dutot et al. [39] [39] information, decision making
Combinations of IT-based assets and routines that support business conduct in value-adding
ways
Sambamurthy &
Zmud [43]
[40] assets, routines, value
E-business Capabilities
The application of information and communication technologies to conduct business activities
along value chains
Bi et al. [33], based on
Lin & Lin [44] and Zhu
& Kraemer [45]
[33] ICT, business activities, value
chain
A firm‘s ability to interact with its customers and business partners and conduct businesses
over the Internet
Kevin Zhu [46] [47] interaction, Internet
The combination of e-commerce technology resources, e-commerce managerial skills and
business networks
Chu Jan Tow
Lawrence [48]
[47] resources, managerial skills,
business networks
High-performance routines that can reside within and between organizations and confer a
firm with a temporary competitive advantage
Andersson and
Kaplan [49]
[47] routines, competitive advantage
Mobilize and deploy Internet-based resources, in combination with or in the presence of other
valued resources
Soto-Acosta and
Meroo-Cerdan [50]
[47] Internet, resources, value
A strategic ability to use Internet to share information, promote transaction, improve customer
service and enhance supplier linkage.
Wu and Liu [19] [19] Strategy, Internet
Enterprise Architecture Capabilities
The specific combination of know-how in terms of organizational knowledge, procedures and
resources able to externalize this knowledge in a specific process with appropriate resources
to achieve a specific outcome for a defined enterprise initiative
Wißotzki [25] [51], [25], [52],
[53]
organizational knowledge, re-
sources, outcome
Organizational Capabilities
A companys abilities to perform a set of,tasks, while utilizing organizational resources. Hwang [54] based
on Barnett and
Helfat [55], Carmeli
and Tishler [56], and
Peng et al. [57]
[54] tasks, resources
TABLE II: Definitions
Capability types Frequent words
Business, Dynamic,
E-business, EA, IT
resource, business, system, research, process, model, infor-
mation, management, capability
Business work, flexibility, product, article, hypothesis, time, software,
year, pepsiamericas, china, chinese
IT high, infrastructure, alignment, acquisition, integration, item
Dynamic case, manager, ESR, relate, ability, CRM, respond, compe-
tence, organisation, sense, ESS, organisational, enable, oa
E-business theory, partner, competitor, table, growth, environment,
adoption, commerce, small, doi, fit, impact, orientation,
present, smes
EA framework, approach, identify, specific, method, litera-
ture, paper, artifact, function, block, maturity, EAM, sci-
ence, design, EA, building, practice, element, assessment,
wißotzki, eacn, action, object, architecture, concept, evalua-
tion, MMDP, state, context
TABLE III: Most frequent words per capability type
A. Definition of business capabilities and the delineation of
capability types
In our data we found two definitions for business capabili-
ties, namely: (1) A particular ability or capacity that a business
may possess or exchange to achieve a specific purpose or
outcome [22], and (2) A corporate business goal the aim of
business capabilities is to activate, use and maintain resources
for specific business activities [6]. There is no dominant
definition for business capabilities. The definitions by Homann
and Wißotzki [22], [6] do not align with the most frequent
words used in the articles related to business capabilities, as
shown in Table III. However the definitions do align with the
most frequent used words in articles across all capability types.
Therefore, we propose the following definition for business
capabilities, which is based on Homann’s and Wißotzki’s
definitions [22], [6]: ”A particular ability that a business
may possess or exchange to achieve a specific corporate
goal”.
To illustrate this definition we provide examples and
counter-examples of business capabilities.
•Examples: electronic service delivery [16], Sarbanes-
Oxley compliance [16], human resource manage-
ment [64], develop product or service [65], and cus-
tomer management [6]
•Counter-examples: resources (e.g., people or assets),
Framework Goal Perspective Domain
TOGAF’s capability based planning [16] Planning, engineering, and de-
livery of business capabilities
Operationalizing strategy Enterprise Architecture
The business capability model by Brits et al. [59] Organizational analysis and
supporting the architecture of
an agile organization
Assessment and architecture Business Capabilities
American Productivity and Quality Centre
(APQC) Process Classification Framework [60]
Common language and defin-
ing work processes
Performance management Best practices and processes
Capability Maturity Model [61] Maturity assessment Process improvement Software development and
business processes
Crosby’s Quality Management Maturity Grid [62] Measuring and benchmarking
quality management
Maturity Quality Management
E-business capability framework [63] Identifying factors affecting
business performance of a
firm
Strategy E-business
E-B capability model [47] Assessing a firm’s compe-
tence
Strategy E-business
TABLE IV: Capability frameworks
strategy, processes
In the next paragraphs we will delineate the definitions for
each type of capability. Based on the definition of the business
capability we discuss whether we agree with the dominant
definition in our data. In case we did not agree with the
definition, we propose a new definition.
1) definition of dynamic capabilities: Teece et al. [23]
defined dynamic capabilities as ”The firms ability to integrate,
build, and reconfigure internal and external competences to
address rapidly changing environments”. In our scope this
definition of dynamic capabilities is seen as the dominant
definition. It emphasizes the ability of an organization and
competences to address the changing environment. This em-
phasis is also in line with the frequent used words in the
dynamic capabilities’ articles, namely ability, respond, and
competence. The definition does not contradict the other defini-
tions of dynamic capabilities, and follows a similar breakdown
structure as the definition of business capabilities. Therefore,
we agree with this definition of dynamic capabilities.
2) definition of IT capabilities: Bharadwaj’s definition of
IT capabilities [24],referred to by 4 articles within our scope,
is the dominant IT capabilities’ definition. Bharadwaj’s def-
inition is ”The ability to effectively combine and apply IT
resources, including IT infrastructure and human IT skills,
to organizational processes, is a source of competitive ad-
vantage”. The emphasis of this definition is in line with the
frequent used words in the IT capabilities’ articles, namely
infrastructure, alignment, and integration, where we interpret
alignment and integration as the combine emphasis of the
definition. The definition is however not regardless of the level
of performance. Based on Bharadwaj [24] and our definition
of business capabilities, we therefore propose the following
definition: ”The ability to effectively combine and apply IT
resources, including IT infrastructure and human IT skills, to
organizational processes.”.
3) definition of E-business capabilities: As stated before
there is no dominant definition for E-business capabilities.
As Bi’s definition [33] is based on multiple definitions, it
gets our preference. Bi defined E-business capabilities as ”The
application of information and communication technologies to
conduct business activities along value chains”. The frequent
word commerce is the only one that is mentioned in most of the
definitions. Even though Bi’s definition is based on multiple
sources, it misses the ‘ability’ element in its definition. We
propose to alter the definition to: ”The ability to apply infor-
mation and communication technologies to conduct business
activities along value chain”.
4) definition of EA capabilities: In our scope there is
only one definition of Enterprise Architecture capabilities [25],
which has only been referred to by the same author. He defined
EA capabilities as ”The specific combination of know-how in
terms of organizational knowledge, procedures and resources
able to externalize this knowledge in a specific process with
appropriate resources to achieve a specific outcome for a
defined enterprise initiative”. This definition refers to the
most frequent words specific, EAM, architecture, and EA. To
align the definition of EA capabilities with the definition of
business capabilities, we propose to remove ”with appropriate
resources” from the current definition. This results in the fol-
lowing definition: ”The specific combination of know-how in
terms of organizational knowledge, procedures and resources
able to externalize this knowledge in a specific process to
achieve a specific outcome for a defined enterprise initiative”
B. Existing business capability frameworks
Through this research we identified the breadth of literature
discussing capability frameworks, which is also supported
by Bernoider et al. [29]. However, we only identified two
business capability frameworks [16], [59]. We found limited
empirical evidence in scientific literature of the application of
the framework by Brits et al. [59]. As the capability-based
planning approach [16], is an part of the TOGAF methodology
it is harder to pin-point the specific implementation of the
business capability framework.
Although we identified only two frameworks to model and
implement business capabilities, we were able to identify many
more business capability maps, such as IBM’s Component
Business Models [64] and Microsoft’s capability map [65].
A business capability map is a set of business capabilities,
often composed of different levels of detail, that are appli-
cable for a certain industry or specific organization. APQC’s
process classification framework [60] has also be applied as a
business capability map [73], taking the level one processes as
capabilities. These maps are often part of a capability approach
in which software vendors or consultancy firms use the maps
to assess organizations. These approaches and frameworks are
often not publicly accessible.
[26] [27] [29] [66] [67] [68] [69] [63] [70] [47] [40] [36] [71] [72] [6] [19] total
Frameworks X X X X 4
Empirical evidence X X X X X X X X X X 10
Connection to related fields X X X X X X X 7
Reference architecture X 1
Transformation projects X X 2
Changing business conditions X 1
IT governance X 1
Enterprise Architecture X 1
Strategy X X 2
Post-merger X 1
IT ambidexterity X 1
Investments X X X 3
TABLE V: Identified future research
Capability-Based View versus Resource-Based View. The
Capability-Based View is closely related to the Resource-
Based View. However it is unclear how what the overlap and
the distinction is between the two views. Table VI provides
an overview of the Capability-Based View (CBV) and the
Resource-Based View (RBV). The RBV is a more broadly
researched and applied concept compared to the CBV. How-
ever the RBV has its limits [26]. The definition of resources in
the RBV is very broad, making it an tautology [74]. Another
limitation of the RBV is that source of competitive advantage
is only based on internal resources.
The RBV looks at the organization from a ‘how’ per-
spective, i.e., making it specific which processes, which re-
sources are used to achieve the strategy. The CBV looks at
the organization from a ‘what’ perspective [22], abstracting
from the implementation. Therefore, a business capabilities
does not entail a certain structure for an organization. It also
does not entail a certain structure for an organization. This
is visualized in ??. In the RBV visual there is no overlap
between the silos, while the CBV has an overlapping capability
‘human resource management’. This ability is present within
the product, department, project and process.
C. Potential research agenda
Based on the findings of our literature study we will now
discuss a potential research agenda. Based on Table V, we
particularly identified three different directions, namely: (1)
The designing of an open-source business capability frame-
work, (2) Empirical evidence of business capability research
findings, and (3) the connection to related fields.
Designing of an open-source business capability framework
We mentioned before that the RBV provides an all-inclusive
definition on resources and the firm, which leads to a tautology.
Business capabilities tend to be more exclusive in what it
comprises and more stable over time, which makes it more
convenient for analyzing an organization’s performance [26],
[22]. To what extent do business capabilities explain the
difference in performance between organizations compared to
the Resource-Based View? To answer this question a busi-
ness capability framework would be useful. However, there
is no business capability framework publicly available that
prescribes how to model a business capability, apply a business
capability map, and that prescribes the approach of deriving
the appropriate set of business capabilities from strategy and
implementing the business capabilities. We propose to create
an open-source business capability framework.
We identified two approaches to model business capabili-
ties, one by TOGAF and one by Brits et al. [16], [59]. These
approaches should be incorporated into the open-source busi-
ness capability framework. How can we integrate TOGAF’s
capability based planning and Brits et al. conceptual business
capability framework [16], [59]?
•Soft aspects of organizations. Currently, business capa-
bilities research and frameworks are quite focused on the hard
aspects of an organization, while the soft aspects organizations,
such as culture, ways of working, and change management,
are increasingly being researched and are becoming more
important for professionals [76]. To what extent can the soft as-
pects be covered in the current view on business capabilities?
What extensions will be necessary to the business capability
framework to incorporate soft aspects in order to improve the
assessments of organizations?
•Measuring and evaluating. Business capabilities frame-
works can be used to analyze and improve organizations [58],
[22]. To do this analysis and improvement properly, the busi-
ness capabilities need to be measured. How can we measure
business capabilities? Khalid et al. [63] designed a frame-
work which uses structural equation modelling to evaluate E-
business strategic capabilities. As E-business capabilities are
closely related to business capabilities, we believe that struc-
tural equation modelling could possibly be used to evaluate
business capabilities as well. How can we apply structural
equation modelling to evaluate business capabilities?
Empirical evidence of business capability research find-
ings. Business capabilities research show promising results in
alignment of business and IT [16], improvement of commu-
nication [26], and investment decisions [19]. However, this is
often based on literature or single case studies. Therefore, we
suggest to further validate these findings in practice.
•Alignment of business and IT. Alignment between busi-
ness and IT is still a high priority in organizations [77]. The
concept of business capabilities is argued to improve alignment
between business and IT, by assisting architects to focus on
business value [16]. Does the alignment of business and IT
improve through the application of business capabilities? What
are the benefits for business and IT alignment when applying
business capabilities?
•Improvement of communication. One key aspect of the
misalignment between business and IT is the communication
between business and IT, especially between senior man-
agement [78]. It is hypothesized by Amiri et al. [26] that
Capability-Based View Resource-Based View
Source of competitive advantage Internal and external Internal
Focus Capability building Resource picking
Perspective What an organization does How an organization does it
View on the firm N/A Bundle of resources
View on resources Resources are executing capabilities all assets, capabilities, organizational
processes, firm attributes, information,
knowledge, etc. controlled by a firm
that enable the firm to conceive of and
implement strategies that improve its
efficiency and effectiveness [75]
View on capabilities ‘What’ an organization does regardless
of the resources used [22](i.e., capabili-
ties are distinguished from resources)
Bundle of skills and knowledge to man-
age assets and activities effectively [8]
(i.e., capabilities are a type of resource)
Organizational aspects Hard and soft Hard
Keywords End-to-end, goal-oriented, stable Silo, assets, implementation
Examples Order fulfillment, HR management, Pro-
curement, Resource Management and
Development, Innovation Management
People, Buildings, Machinery, Pro-
cesses, Cash
Counter-examples People, Buildings, Machinery, Pro-
cesses, Cash
Strategy
TABLE VI: Capability-Based View versus Resource-Based View
using the Capability-Based View will improve communica-
tion between senior management, especially focused on the
communication of the CIO towards the other members of
the management team. Does the capability-based terminology
improve communication in senior management [26]? How are
other organisational levels benefiting from the capability-based
terminology?
•Investments. There is a trend emerging of shifting in-
vestments on technical resources to investments on capabil-
ities [19]. To what extent does a capability-based approach
improve investments? What is the role of business capabilities
in future technology investment strategies?
Connection to related fields. As business capabilities cover
the entire organization, it is related to many other research
fields. In our data we identified three related fields, namely
digital transformations, strategy, and changing environments.
•Digital transformations. Bernoider et al. [29] argue that
improved understanding on aligning IT governance effectively
with IT driven business transformation projects is necessary.
As discussed before, business capabilities could make this
alignment easier. How can a business capability framework
make business/digital transformation easier for (project) man-
agers [29]? To become a Digital Master, an organization has to
develop new capabilities [1], but by going through such a trans-
formation not only will there be new capabilities developed,
current capabilities will also be affected. How are IT/Digital
transformations affecting the capabilities of an organization?
What are the benefits of IT/Digital transformations driven by
a change in business capabilities?
•Strategy. Business capabilities provide a missing link be-
tween the strategy and implementation of an organization [16].
However, it is not fully clear on how the alignment between
strategy and implementation is. What is the role of business
capabilities between strategy and implementation? How can
we formalize this role in the business capability framework?
Is there an optimal set or balance of capabilities in for an
organization?
According to its definition, business capabilities can be
exchanged between organizations. In IT capabilities we see
the phenomenon of sharing IT capabilities [40]. This could
also be the case for business capabilities. What are the mecha-
nisms underlying the strategic consequences of shares business
capabilities?
The relationship between ontology and implementation has
already been given form through organization implementation
variables [3]. Business capabilities have resembles with the
ontology of an organization. How do business capabilities
differ from the ontology of an organization? What are the
conditions in which business capabilities are preferred as to
the ontology of an organization?
•Changing environments. Organizations are increasingly
dealing with internal and external changes. This requires them
to be flexible. However, business capabilities are stable [26],
[22]. What is role of business capabilities in an increasing
changing organization? How can business capabilities be
altered over time? To deal with these changes, the topic of
(IT) ambidexterity is increasingly being researched [70]. How
can we apply IT ambidexterity theory to business capabilities?
•Organizational Routines as a Source of Capabilities.
Salvato [79], [80] and others explore the role of routines,
concrete patters of day-to-day activity, in capability evolution.
He argues for a shift of focus in understanding capabilities as
aggregated entities, to that of practical micro activities.How
can we better understand the connection of business capabili-
ties and organizational routines? How can business capability
frameworks account for more fine-grained perspectives on
capabilities so help accounting for their development?
VII. CONCLUSION
The goal of this research was to identify the current
state of business capability research. In order to do this we
performed a systematic literature review, based on guidelines
by Kitchenham [7]. We identified 720 articles of which 103
were subject to a broad analysis, including using text mining
to identify the distribution of words used in the articles, and
we did in-depth analysis of 20 articles.
Our main contributions in this paper are: (1) an extensive
analysis on the state of art in business capability research, (2)
a focused and aggregated definition for business capabilities,
and (3) a potential research agenda for future research.
We found that there are only two business capability frame-
works available in literature and limited empirical evidence on
these frameworks. This is in contrast to professional literature,
where there are more approaches on business capabilities
available. In our analysis, the number of definitions for busi-
ness capabilities were limited and they were also not aligned.
Therefore, we propose the following definitions for business
capabilities: ”A particular ability that a business may possess
or exchange to achieve a specific corporate goal”.
For future research we proposed a potential research
agenda with three different directions, namely: (1) Designing
of an open-source business capability framework, (2) Empirical
evidence of business capability research findings, and (3) the
connection to related fields. For each of the directions we
posed possible research questions such as (1) To what extent
do business capabilities explain the difference in performance
between organizations compared to the Resource-Based View?,
(2) Does the alignment of business and IT improve through
the application of business capabilities?, and (3) How are
IT/Digital transformations affecting the capabilities of an or-
ganization?
Based on our analysis we conclude, that business capa-
bilities and the Capability-Based View provide a stable view
on organizations and their performance, regardless of the
resources implemented. The research directions given in this
article can help fill the gap between strategy and implementa-
tion and provide better analysis tools for comparison between
organizations.
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