A business unit is a coherent set of teams and departments, usually structured in a hierarchy. Typically, a business is divided into business units, each with their own set of responsibilities.
The role of a business unit is to provide resources (money, staff, infrastructure, governance) to enable business processes to occur.
A business unit capability represents a single capability that a single business unit is required to perform in order to meet the needs of a business model. This element is created by mapping the shared taxonomy of business capabilities to a specific business unit.
The view below illustrates both of these concepts in relation to surrounding concepts.
There are many interesting concepts included in this view of the Enterprise Business Motivation Model.
There are two relationships between business units that are captured. The first is a hierarchical parent-child relationship typical of most organizations. In this sense, each department in a business can be considered to be a business unit, within a larger business unit. Normally, the business model will place expectations on a business unit at the higher (more general) levels.
The second relationship between business units comes in the form of services, provided by one unit and consumed by another. This is a key concept in the EBMM: that any use of one business unit by another takes place through a business service. The business units that offer the service are said to “provide” it while the business units that rely upon that service are said to “consume” it. In smaller organizations, it is uncommon to see a single business service provided by more than one business unit.
A business service is defined as “a collection of business capabilities, offered as the external offerings of a single business unit, and made available to one or more customers.” The customers may be internal (within the enterprise) or external.
The ITIL definition of ‘service’ is a synonym for Business Service, and is defined as: a Service that is delivered to Business Customers by Business Units. For example, delivery of financial services to Customers of a bank, or goods to the Customers of a retail store. Successful delivery of Business Services often depends on one or more IT Services. (ITIL v3) Note that the ‘products’ offered by the business service are not the same as the ‘capabilities’ of that service.
The business model may be aware of some of the business services, and may, in fact, require that some of them exist. For example, if a business model relies upon channel partners to provide support for Fabrikam’s products, then Fabrikam’s business model may require that a partner support business unit will provide a number of services to the partners, including training and readiness as well as the possibility of “second tier support” for product defects or issues that cannot be handled by the partner network.
A company is made up of business units. A “company” in this context is usually a legal entity, and may not have the same scope as the enterprise. The concept of an enterprise is part of the Business Model view, and is defined to be a collection of business models.
A Capability Roadmap is produced as the result of a maturity assessment. A maturity assessment is an element that describes a process that takes place at a specific point in time, and which does not question if the business is doing the right thing, but rather evaluates if the business is doing things right. (The former is the scope of a business model assessment).
Once a capability roadmap is generated, it becomes a driver in its own right. In order to make a change to the business, based on any driver, the business would charter a business program.
A business program is defined as:
- A group of related business projects managed in a coordinated way to obtain benefits and control not available from managing them individually. Programs may include elements of related work outside the scope of the discrete projects in the program.
- An ongoing set of capabilities within a business unit aligned to organizational commitments.
Both the Business Unit and the Business Unit Capability are core elements of the Enterprise Business Motivation Model.