Elaboración del plan de emergencia y contingencia

After having built the combined capability heat map which shows which business capabilities the organization needs to develop, enhance or continue supporting, the organization is left with a rather large set of options. The next logical step is to select those capabilities that hold

strategic importance or, generalizing on the TOGAF definition, those capabilities that are the most valuable for the business and should therefore focus on first. The number of business capabilities to be selected should be not too large, but for an average sized organization approximately five should be selected per iteration. The selection criteria could depend on the organization’s business strategy or in other factors, for example a need for organizational change (business transformation or infrastructure changes). No matter the criteria, a decision

again has to be made about which combination of (upgrades of) strategic business capabilities maximize the achievement of the organization’s strategic objectives.

The general idea for selecting the right combination of strategic business capabilities to be developed or improved comes from the defense literature, where both strategic significance and development costs play a part. More specifically, the choice is dictated by the Balance of Investment, which is in turn directly affected by the resource constraints on the one side and the strategic priorities on the other (The Technical Cooperation Program (TTCP) 2004). There can be two approaches regarding the selection; the first is to consider the business capabilities in isolation from each other and select independently the strategic ones; the second is to create possible combinations of strategic business capabilities and select the one with the optimal trade-off. In this research the second approach for selecting amongst alternatives is preferred mainly for three reasons. First because it might be possible that one strategic business capability can perform better in combination with another one or more out of the other considered strategic capabilities, so it would make sense to select those as well, as long as the overall result justifies the selection. Second, because it ensures that the secured financial resources are adequate for the entire selection by looking at the bigger picture. And third because by considering combinations and not standalone capabilities, different choices might come into light, like for instance downgrading a not so strategically important capability for the sake of a strategic important one. The details regarding Step G are given in Table 15.

Table 15: Attributes of step G

Step G: Plan (evaluate, prioritize, and select)

Goal To select the most urgent strategic business capabilities

Activities  Distinguish the strategic capabilities

 Create possible combinations of strategic business capabilities

 Estimate the Balance of Investment for the considered combinations

 Select the best combination

 Highlight the individual strategic business capabilities on the heat map

 Communicate

Input  Combined capability heat maps

 Capability upgrade and development costs

 Resource constraints (budget)

 Strategic priorities

Techniques  Interviews with business stakeholders

Result A set of approximately 5 strategic business capabilities

It should be noted that an attempt to make this selection more rigorous was made by (Cheng et al. 2011) who developed an optimization algorithm for the national defense sector. The authors designed a simple bi-level programming (BLP) model and a six-step algorithm which, for the sake of simplicity, considered only the constraints of the costs of the resources necessary for

developing a capability. However, their proposition has neither been applied nor tested yet, particularly in the business and strategy field.

Alternatively, a type of analytic hierarchy process (Saaty 1990) can support this type of decisions to be made with full comprehension of both the upside and downside of a particular choice. The original technique developed in the 1970s would require quantitated data that can be placed inside a vector, one for each combination of capabilities. At this point, what a business can estimate early on about a capability is its cost and its strategic criticality of its creation or upgrade, which can be combined and expressed in a single numerical value. It can be then compared against the entire range of values of the other capabilities, which in turn can provide some insight on how they relate to each other. There are many portfolio management

techniques to be found in the literature; for the sake of completeness, we will refer in general to the Multiple-criteria decision analysis (MCDA) and the extension to method of Bedell for IT portfolio valuation. MCDA methods utilize a decision matrix to provide a systematic analytical approach for integrating risk levels, uncertainty, and valuation, which enables evaluation and ranking of many alternatives (covered extensively in (Figueira et al. 2005)). In the extension of Bedell, (Buschle & Quartel 2011) presented a decomposition of the value of IT into the importance and effectiveness of IT in supporting the business, within the scope of using Enterprise Architecture models in conjunction with the original method. Based on these two indexes, an organization’s IT portfolio can be evaluated to better serve its strategic business goals.

Once the selection is made, the chosen strategic business capabilities can be depicted in the same heat map built in the previous step. This could be done by highlighting the selected

strategic business capabilities with thick borders as (Weldon & Burton 2011) suggest, or by other means of visualization.