Business Capability Mapping for Telecommunications

1. The Capability Map Advantage for Telecommunications www.capstera.com 1

2. Mapping Capabilities, Unlocking Performance: Transforming Telecom from Core to Edge. In today's hyperconnected world, telecommunications ▪ providers face unprecedented challenges—from network transformation and digital disruption to evolving customer expectations and intense competition. The complexity of telecom operations, with their vast technical infrastructure, diverse service offerings, and intricate business processes, creates a perfect storm of operational and IT management challenges. Business Capability Maps offer telecom leaders a powerful ▪ lens for cutting through this complexity. By providing a comprehensive, structured view of what the business does— independent of how it does it—capability maps create a stable foundation for strategic planning, operational optimization, and IT rationalization. This architectural approach empowers telecom companies to align their operations and technology landscape with strategic priorities while eliminating redundancies and focusing investments where they matter most. www.capstera.com 2 2

3. The Telecom Capability Challenge 1 Telecommunications companies operate in one of the most complex business environments, managing vast networks, diverse service portfolios, and millions of customer interactions while facing unprecedented transformation pressures. ▪ Operational Complexity: Telecom providers must orchestrate thousands of interconnected processes across network operations, customer management, service delivery, and partner ecosystems to deliver seamless services. ▪ Technology Proliferation: Decades of technology evolution have created intricate IT landscapes with hundreds of applications, multiple network generations, and overlapping systems that drive up costs and impede agility. ▪ Organizational Silos: Traditional telecom organizational structures—often divided between network, IT, product, and customer functions—create barriers to end-to-end process optimization and technology rationalization. ▪ Transformation Imperatives: The simultaneous pressures of 5G deployment, digital transformation, network virtualization, and new business model development create competing demands for limited investment resources. ▪ Visibility Challenges: Many telecom executives lack a clear, comprehensive view of how operational capabilities map to applications, infrastructure, and strategic objectives, hampering decision-making and prioritization. www.capstera.com 3

4. Business Capability Maps Defined 2 A Business Capability Map provides a structured representation of what a telecommunications company does to deliver value, independent of how those capabilities are implemented through processes, systems, and organizational structures. Capability Definition: A business capability represents a telecom ▪ company's ability to perform a specific function that enables business outcomes, such as "Service Activation" or "Network Capacity Planning." Hierarchical Structure: Capability maps organize capabilities in a ▪ hierarchical structure, typically with 3-4 levels of increasing granularity, from enterprise-level domains to specific operational functions. Implementation Independence: Unlike process models or ▪ organizational charts, capability maps remain stable over time, providing a consistent reference point even as implementations change through transformation initiatives. Cross-Functional Perspective: Capability maps transcend ▪ organizational boundaries, revealing end-to-end requirements and interdependencies that might otherwise be obscured by siloed viewpoints. Business Context: Each capability encapsulates the people, ▪ processes, information, and technology needed to deliver a specific business function, providing a holistic context for optimization decisions. www.capstera.com 4

5. Core Telecom Capability Domains 3 A comprehensive telecom capability map encompasses several distinct domains that collectively represent the end-to-end operations of a telecommunications provider. ▪ Customer Management: Capabilities that enable customer acquisition, service, retention, and experience management across all segments, from consumers to enterprise customers. ▪ Product Management: Capabilities for designing, developing, launching, and managing the full lifecycle of telecom products and services, from basic connectivity to complex solutions. ▪ Network Operations: Capabilities for planning, deploying, operating, optimizing, and maintaining network infrastructure, from access networks to core platforms. ▪ Service Management: Capabilities for activating, assuring, and managing the services delivered over the network, ensuring they meet performance and quality requirements. ▪ Enterprise Management: Capabilities that enable the telecom provider to operate as a business, including finance, human resources, strategy, and governance functions. ▪ Technology Management: Capabilities for managing the IT landscape, including application development, infrastructure operations, and technology innovation. www.capstera.com 5

6. Operational Optimization Through Capability Analysis 4 Business Capability Maps enable telecom providers to identify and address operational inefficiencies by providing a structured framework for capability assessment and improvement. ▪ Performance Assessment: Systematic evaluation of capability performance against industry benchmarks reveals operational gaps and improvement opportunities across the telecom value chain. ▪ Capability Heatmapping: Visual heatmapping techniques highlight capability gaps relative to strategic importance, directing improvement efforts to areas with the highest business impact. ▪ Process Redundancy Elimination: Mapping operational processes to capabilities exposes redundant or duplicative processes that have evolved over time, particularly in companies that have grown through acquisition. ▪ Cross-Functional Optimization: Capability analysis reveals cross-functional dependencies and handoff points that often represent the greatest opportunities for operational streamlining. ▪ Resource Allocation: Understanding capability performance relative to strategic importance enables more effective allocation of operational improvement resources across competing priorities. www.capstera.com 6

7. Did You Know Industry Insight: According to a 2023 TM Forum survey, ▪ telecommunications companies leveraging business capability maps for operational and IT optimization achieve 34% higher success rates in transformation initiatives and realize an average of 23% reduction in IT costs compared to companies without such practices. www.capstera.com 7

8. IT Portfolio Rationalization Through Capability Mapping 5 By linking applications and technologies to the business capabilities they support, capability maps provide a powerful framework for optimizing the telecom IT landscape. ▪ Application Redundancy Identification: Mapping applications to capabilities reveals functional overlaps and redundancies, where multiple systems support the same business capability due to historical decisions or organizational silos. ▪ Technical Debt Assessment: Capability-based assessment of technical debt helps prioritize modernization efforts based on business impact rather than technical factors alone. ▪ Investment Alignment: Capability maps enable IT investment decisions that align with strategic priorities, directing resources to technologies that support the most critical business capabilities. ▪ Gap Analysis: Systematic mapping of applications to capabilities highlights capability gaps where business needs lack adequate technology support, often revealing critical investment areas. ▪ Architecture Simplification: Capability-based analysis provides a foundation for architecture simplification, identifying opportunities to reduce integration complexity and streamline the technology landscape. www.capstera.com 8

9. 5G and Network Transformation Optimization 6 As telecom providers deploy 5G networks and virtualize network functions, capability maps help optimize these complex transformation initiatives and their supporting operations. ▪ Network Capability Evolution: Capability mapping highlights how traditional network operations capabilities must evolve to support software-defined, virtualized network infrastructure. ▪ Service-Based Architecture Alignment: Capability models help align business operations with the service-based architecture principles at the heart of 5G network design. ▪ Edge Computing Operations: Mapping capabilities for distributed edge computing operations ensures these new environments are effectively managed within the broader operational context. ▪ Network Slicing Enablement: Capability analysis identifies the new operational capabilities needed to support and monetize network slicing in 5G environments. ▪ Transformation Roadmapping: Capability-based transformation roadmaps ensure network evolution initiatives develop the operational capabilities needed to realize the full business potential of new network technologies. www.capstera.com 9

10. Digital Experience Optimization 7 Capability maps help telecom providers optimize digital customer experiences by providing a structured framework for identifying and addressing experience gaps. ▪ Omnichannel Capability Assessment: Mapping customer experience capabilities across channels highlights inconsistencies and gaps that compromise the omnichannel experience. ▪ Digital Maturity Evaluation: Capability-based digital maturity assessments reveal specific areas where digital capabilities lag behind competitive benchmarks or customer expectations. ▪ Experience-to-Technology Linkage: Capability maps connect customer experience requirements to the underlying technologies, enabling more effective experience-driven technology investments. ▪ Journey Optimization: Mapping customer journeys to capabilities and their supporting technologies identifies friction points and optimization opportunities throughout the customer lifecycle. ▪ Self-Service Enablement: Capability analysis highlights opportunities to enhance self-service capabilities, reducing operational costs while improving customer satisfaction. www.capstera.com 10

11. Data and Analytics Optimization 8 Business Capability Maps provide a framework for optimizing telecom data and analytics operations, ensuring these critical capabilities deliver maximum business value. ▪ Data Capability Assessment: Mapping data management capabilities—from acquisition and storage to governance and analysis—reveals gaps and improvement opportunities across the data lifecycle. ▪ Insight Delivery Optimization: Capability analysis helps streamline the flow of insights from data to decision-makers, eliminating bottlenecks and accelerating data-driven decision making. ▪ Analytics Redundancy Reduction: Mapping analytics capabilities and their supporting technologies highlights redundant analytics investments that can be consolidated to improve efficiency. ▪ Data Architecture Alignment: Capability-based data architecture ensures data assets are organized to support critical business capabilities rather than reinforcing organizational silos. ▪ AI/ML Capability Development: Capability maps help identify and prioritize opportunities to enhance business capabilities through artificial intelligence and machine learning technologies. www.capstera.com 11

12. Did You Know Research by Forrester indicates that telecom ▪ organizations using capability-based approaches for portfolio rationalization typically identify 15-20% of applications as candidates for retirement or consolidation, resulting in annual savings of 8-12% of IT operating costs. www.capstera.com 12

13. Partner Ecosystem Optimization 9 As telecom providers increasingly operate within complex partner ecosystems, capability maps help optimize these relationships and their supporting operations. ▪ Ecosystem Capability Assessment: Mapping partner ecosystem capabilities—from onboarding and integration to performance management and commercial arrangements— highlights areas for optimization. ▪ Make vs. Buy Analysis: Capability mapping provides a structured framework for make vs. buy decisions, identifying where partner capabilities should complement or replace internal operations. ▪ API Management Optimization: Capability analysis ensures API management capabilities effectively support ecosystem integration, development, and monetization objectives. ▪ Partner Lifecycle Streamlining: Mapping the partner lifecycle to capabilities and technologies identifies opportunities to streamline partner operations and reduce friction. ▪ Ecosystem Governance Enhancement: Capability-based governance models ensure appropriate oversight of ecosystem operations while enabling the agility needed for 13 effective partnership. www.capstera.com 13

14. Organizational Alignment Optimization 10 Business Capability Maps help telecommunications companies optimize organizational structures and governance models to support operational excellence and strategic objectives. ▪ Capability Ownership Clarification: Mapping capabilities to organizational units highlights ownership gaps, overlaps, and ambiguities that compromise operational effectiveness. ▪ Organizational Streamlining: Capability-based organizational analysis identifies structural redundancies and opportunities for consolidation that reduce complexity and improve efficiency. ▪ Skills Gap Identification: Mapping required skills to capabilities highlights skill gaps that must be addressed through hiring, training, or partnership to deliver critical capabilities. ▪ Governance Optimization: Capability-based governance models ensure appropriate oversight and decision rights for critical capabilities while reducing governance overhead for less strategic functions. ▪ Transformation Change Management: Capability maps provide a stable reference point for managing organizational change, helping stakeholders understand how transformation initiatives will impact their roles and responsibilities. www.capstera.com 14

15. Financial Optimization Through Capability Economics 11 Capability maps enable telecom providers to optimize financial performance by providing a structured framework for capability- based financial analysis and investment prioritization. ▪ Capability Cost Attribution: Mapping costs to capabilities provides visibility into the true cost of delivering specific business functions, often revealing surprising cost drivers and optimization opportunities. ▪ Investment Prioritization: Capability-based investment frameworks ensure financial resources flow to capabilities with the greatest strategic importance and performance gaps. ▪ Value Stream Optimization: Mapping financial flows through capability-based value streams highlights value leakage points where revenue is lost or costs are unnecessarily incurred. ▪ Shared Service Optimization: Capability analysis identifies opportunities to consolidate common capabilities into shared services, reducing duplication and capturing economies of scale. ▪ Financial Metric Alignment: Capability-based performance metrics ensure financial indicators reflect the health of critical business capabilities rather than just organizational unit performance. www.capstera.com 15

16. Merger and Acquisition Optimization 12 For telecom providers pursuing growth through M&A, capability maps provide essential tools for optimizing target selection, due diligence, and post-merger integration. ▪ Target Capability Assessment: Mapping acquisition target capabilities against the acquirer's capability map highlights complementary strengths, redundancies, and potential integration challenges. ▪ Due Diligence Enhancement: Capability-based due diligence provides a structured framework for evaluating the maturity and performance of target company operations and technologies. ▪ Integration Planning: Capability maps provide a stable reference point for integration planning, helping teams identify which capabilities to consolidate, maintain separately, or transform. ▪ Synergy Realization: Capability-based synergy analysis ensures integration efforts focus on areas with the greatest potential for cost reduction or capability enhancement. ▪ Cultural Integration: Mapping cultural attributes to capabilities helps identify potential cultural integration challenges and develop targeted interventions to address them. www.capstera.com 16

17. Did You Know A 2024 McKinsey study found that telecom providers ▪ implementing comprehensive capability mapping achieve 42% higher alignment between strategic objectives and technology investments, resulting in 27% higher return on digital transformation investments. www.capstera.com 17

18. Regulatory Compliance Optimization 13 In the heavily regulated telecommunications industry, capability maps help optimize compliance operations and their supporting technologies. ▪ Compliance Capability Assessment: Mapping regulatory compliance capabilities—from requirement monitoring to implementation and reporting—highlights gaps and optimization opportunities. ▪ Control Rationalization: Capability-based control mapping identifies redundant or overlapping controls that can be consolidated to reduce compliance costs while maintaining effectiveness. ▪ Regulatory Impact Analysis: Capability maps provide a structured framework for assessing the impact of new regulations across the organization and technology landscape. ▪ Compliance Technology Optimization: Mapping compliance technologies to capabilities highlights opportunities to consolidate or enhance systems that support regulatory requirements. ▪ Risk-Based Prioritization: Capability-based risk assessment ensures compliance resources focus on the capabilities with the greatest regulatory risk exposure and strategic importance. www.capstera.com 18

19. Implementation and Value Realization 14 To maximize the value of Business Capability Maps for operational and IT optimization, telecom providers must follow a structured implementation approach with clear value metrics. ▪ Phased Implementation: A phased implementation approach—starting with high-priority domains and progressively expanding—delivers early value while building momentum for broader adoption. ▪ Stakeholder Alignment: Engaging key stakeholders from across business and IT functions ensures the capability map reflects diverse perspectives and builds organizational buy-in. ▪ Tool Selection: Selecting appropriate tooling for capturing, visualizing, and analyzing the capability map ensures sustainable value beyond initial development. ▪ Governance Framework: Establishing clear governance processes for maintaining and evolving the capability map ensures it remains relevant as business requirements change. ▪ Value Measurement: Defining and tracking specific measures of value—from cost savings to performance improvements— demonstrates the business impact of capability-based optimization. www.capstera.com 19

20. Takeaway Business Capability Maps provide telecommunications organizations with a powerful framework for cutting through operational and technological complexity. By creating a structured, business-focused view of what the company does— independent of how it does it—capability maps enable telecom leaders to systematically identify and address optimization opportunities across operations and IT. For telecom providers navigating the challenges of network transformation, digital disruption, and evolving customer expectations, capability mapping offers a stable foundation for decision-making that transcends organizational silos and technology lifecycles. By revealing redundancies, gaps, and misalignments that would otherwise remain hidden in complex operational environments, capability maps empower telecom companies to focus optimization efforts where they will deliver the greatest strategic value and operational impact. 20 www.capstera.com 20

21. Next Steps 1. Assess Your Current State: Evaluate your existing business architecture artifacts and operational frameworks to determine the current state of capability modeling in your organization. 2. Identify Priority Domains: Select 2-3 capability domains with the greatest potential for operational and IT optimization as the initial focus areas for capability mapping. 3. Engage Key Stakeholders: Convene cross-functional leadership to build understanding of capability mapping and secure commitment for the optimization initiative. 4. Develop Your Capability Map: Create a comprehensive capability map for your priority domains, leveraging industry reference models to accelerate development. 5. Link to Strategic Initiatives: Connect your capability map to active strategic initiatives to demonstrate early value and build momentum for broader adoption of capability-based optimization. 21 www.capstera.com 21

22. Capstera is a treasure trove for Business and Enterprise Architects. ▪ Capability Maps for Various Functions and Sectors. ▪ Value Streams ▪ Business Data Models ▪ Insights ▪ Tools, Templates, and Tutorials Stay in touch with Capstera. www.Capstera.com https://www.linkedin.com/company/capstera https://www.X.com/Capstera https://www.facebook.com/capstera Note: Capstera’s products and their contents may differ from the general information offered in these guides.) 22 www.capstera.com 22

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