Capability Mapping Success for F&B Companies

1. Business Capabilities as the Recipe for Food and Beverage Excellence www.capstera.com 1

2. Blend capabilities, strategy, and technology to create a cohesive, high-performing food and beverage enterprise. Food and beverage manufacturers face unprecedented ▪ challenges in today's volatile market – from fluctuating commodity prices and supply chain disruptions to evolving consumer preferences and sustainability demands. These pressures require a comprehensive understanding of organizational capabilities to make informed strategic decisions and targeted investments. Business capability maps provide F&B companies with a ▪ powerful lens to visualize their entire operation as an integrated system. By creating a shared understanding of what the business does – independent of how it's done or who does it – capability maps enable leaders to optimize operations, streamline technology landscapes, and create a foundation for sustainable growth and innovation. www.capstera.com 2 2

3. Understanding Business Capability Maps in the F&B Context 1 Business capability maps provide a structured visualization of what an organization does to deliver value, creating a common language that bridges business and technology domains. For F&B manufacturers, they serve as the essential blueprint for strategic planning and operational excellence. • Capability Definition: A business capability represents a particular ability or capacity that a business may possess or exchange to achieve a specific purpose or outcome in the F&B value chain. • Organization-Neutral View: Unlike processes or functions that change frequently, capabilities provide a stable reference point that transcends organizational boundaries and technological implementations. • Hierarchical Structure: Capability maps typically use a tiered approach with Level 1 capabilities (major business areas) decomposed into increasingly detailed Level 2-4 capabilities for granular analysis. • Business-Technology Bridge: Capability maps create a shared language between business stakeholders and technology teams, ensuring investments directly support business needs. • Strategic Tool: By mapping capabilities to strategic priorities, F&B companies can align resources to critical areas that drive competitive advantage and operational excellence. www.capstera.com 3

4. The Strategic Value of Capability Mapping for F&B Manufacturers 2 Capability mapping delivers strategic value by providing food and beverage executives with enhanced visibility and decision- making tools for navigating industry complexity. • Alignment Acceleration: Capability maps create a unified vision of the business across departments, allowing diverse teams to quickly align on priorities and resource allocation. • Investment Validation: By linking technology investments directly to business capabilities, organizations can validate each project's contribution to strategic objectives. • Gap Identification: Systematic capability assessment reveals critical gaps and redundancies that might otherwise remain hidden in siloed organizations. • M&A Navigation: For acquisition-driven growth strategies, capability mapping accelerates due diligence and integration planning by providing a structured comparison framework. • Strategic Focus: Capability heat mapping helps leadership concentrate resources on capabilities that deliver the greatest competitive advantage rather than spreading investments too thinly. www.capstera.com 4

5. Operational Excellence Through Capability Clarity 3 Clear capability definition leads to operational improvements by highlighting inefficiencies and creating accountability for performance across the F&B value chain. • Process Optimization: Mapping capabilities to underlying processes reveals redundancies, bottlenecks, and improvement opportunities that span functional boundaries. • Resource Alignment: Capability ownership clarification ensures appropriate staffing and skills development in critical areas that drive business value. • Performance Measurement: Well-defined capabilities enable more precise KPIs that track operational performance in business-relevant terms. • Continuous Improvement: Capability maturity assessment creates a framework for systematic operational enhancement across the entire organization. • Accountability Framework: Clear capability ownership establishes responsibility for end-to-end performance, reducing the "white space" between departmental boundaries. www.capstera.com 5

6. IT Portfolio Rationalization Through Capability Lens 4 One of the most powerful applications of capability mapping is optimizing the technology landscape to eliminate redundancy and focus investments where they matter most. • Application-Capability Alignment: Mapping applications to the capabilities they support reveals redundant systems, capability gaps, and opportunities for consolidation. • Technology Debt Visibility: Capability-based assessment highlights where legacy systems are constraining critical business functions and limiting agility. • Investment Prioritization: Understanding which technologies support differentiating capabilities helps prioritize modernization efforts for maximum business impact. • Architectural Governance: Capability maps provide the business context for technology standards and architectural decisions, ensuring alignment with enterprise needs. • Shadow IT Reduction: Comprehensive capability-technology mapping reveals unauthorized applications and enables more effective technology governance. www.capstera.com 6

7. Did You Know According to a 2023 industry survey, F&B companies with ▪ mature capability mapping practices reallocate an average of 22% of their IT budget following their first comprehensive capability assessment, redirecting resources from low-value maintenance to strategic investments. www.capstera.com 7

8. Core Capability Domains for F&B Excellence 5 Food and beverage manufacturers require specific capability domains that address the unique aspects of the industry, from ingredient management to consumer engagement. • Product Management: Capabilities spanning the product lifecycle from ideation and development to commercialization and retirement, including recipe management and packaging design. • Supply Chain Operations: End-to-end capabilities covering sourcing, planning, manufacturing, logistics, and distribution, with special attention to traceability and shelf-life management. • Quality & Compliance: Capabilities ensuring product safety, regulatory compliance, certifications, and quality standards across all production facilities and markets. • Market Management: Capabilities spanning brand development, marketing, sales, trade promotion, distribution channel management, and consumer engagement. • Enterprise Foundation: Support capabilities including finance, human capital, sustainability, technology management, and corporate services that enable core operations. www.capstera.com 8

9. Spotlight: Manufacturing Capabilities in F&B 6 Manufacturing represents a critical capability domain for F&B companies, requiring specialized focus in capability mapping exercises. • Production Planning: The ability to schedule production efficiently, balancing demand requirements, inventory targets, equipment utilization, and batch sequencing for optimal throughput. • Recipe Execution: Capabilities for maintaining consistency in scaled production environments, including formulation management, batch control, and deviation management. • Quality Assurance: The ability to maintain consistent product quality through ingredient testing, in-process verification, statistical process control, and finished goods certification. • Equipment Effectiveness: Capabilities for equipment setup, operation, maintenance, and optimization that maximize availability and minimize production losses. • Continuous Improvement: The ability to systematically identify and implement operational enhancements through lean techniques, six sigma methodologies, and shop floor innovation. www.capstera.com 9

10. Technology Integration Through Capability Mapping 7 Capability maps provide the crucial connection point for aligning technology architecture with business needs, particularly important in the increasingly digital F&B sector. • System Support Analysis: Mapping which systems support which capabilities reveals coverage gaps, redundancies, and opportunities for consolidation across the application portfolio. • Integration Prioritization: Understanding capability interdependencies helps identify critical integration points that deliver the most significant business value. • Build vs. Buy Framework: Capability mapping creates clear criteria for evaluating commercial solutions against custom development based on strategic capability importance. • Legacy Modernization: Capability assessments help sequence technology modernization efforts based on business impact rather than technical factors alone. • Digital Innovation: Identified capability gaps that cannot be addressed with traditional approaches become prime candidates for digital innovation initiatives. www.capstera.com 10

11. Capability Assessment Methodology for F&B 8 Once mapped, capabilities must be assessed to identify priorities and guide improvement efforts across business and technology domains. • Maturity Evaluation: Assess each capability on a defined maturity scale (typically 1-5) against industry benchmarks to understand current performance and improvement potential. • Strategic Importance Rating: Evaluate each capability's contribution to strategic objectives, differentiating between table-stakes capabilities and true differentiators. • Heat Mapping: Visualize the gap between capability maturity and strategic importance to highlight critical areas requiring immediate attention and investment. • Pain Point Association: Link specific operational challenges and limitations to capability gaps to build a business case for improvement initiatives. • Benchmarking Comparison: Compare capability maturity against industry peers and leaders to identify areas of competitive advantage or vulnerability. www.capstera.com 11

12. Did You Know The average F&B manufacturer has between 90-120 ▪ distinct Level 2 business capabilities, yet typically has over 200 applications in their technology landscape, indicating significant redundancy and integration complexity. www.capstera.com 12

13. Capability-Based Transformation Roadmapping 9 Business capability maps provide the foundation for developing coherent, prioritized transformation roadmaps for F&B manufacturers. • Capability Prioritization: Not all capabilities can be enhanced simultaneously, requiring clear criteria for sequencing based on strategic impact, interdependencies, and resource constraints. • Initiative Portfolio: Group related capability improvements into cohesive transformation initiatives that deliver end-to-end business value rather than piecemeal enhancements. • Dependency Management: Map capability interdependencies to ensure transformation initiatives address prerequisites and avoid creating new organizational bottlenecks. • Benefit Realization: Link capability improvements directly to business outcomes and financial metrics to track transformation value and maintain executive support. • Change Synchronization: Coordinate capability enhancements across business, process, technology, and organizational dimensions to ensure comprehensive transformation. 13 www.capstera.com 13

14. Data Architecture Through Capability Lens 10 Data is increasingly critical to F&B performance, and capability mapping provides the framework for effective data governance and management. • Information Requirements: Define the essential data needed to execute each capability effectively, creating the foundation for data architecture and governance. • Data Ownership: Establish clear ownership for data assets based on capability responsibility, reducing conflicts and improving data quality at the source. • Integration Framework: Identify critical data flows between capabilities to guide integration architecture and master data management strategies. • Analytics Enablement: Map analytics and reporting requirements to capability performance metrics, ensuring decision support aligns with business needs. • Data Quality Priorities: Focus data quality initiatives on the information that supports the most strategically important capabilities for maximum business impact. www.capstera.com 14

15. Organizational Alignment to Capabilities 11 Optimizing the organizational structure around critical capabilities ensures appropriate focus, resources, and accountability for business performance. • Capability Ownership: Assign clear accountability for each capability to specific roles or teams, eliminating confusion and ensuring end-to-end performance management. • Skills Assessment: Map required skills to business capabilities to identify talent gaps and inform recruitment and development strategies. • Role Definition: Develop role descriptions that align with capability requirements rather than traditional functional boundaries to improve cross-functional collaboration. • Performance Metrics: Define individual and team performance measures that directly support capability excellence and strategic outcomes. • Organizational Design: Restructure teams and reporting relationships to minimize handoffs in critical capabilities that deliver competitive differentiation. www.capstera.com 15

16. Case Study: Global Beverage Manufacturer 12 A leading beverage company leveraged capability mapping to drive a comprehensive business and technology transformation with remarkable results. • Capability Baseline: The company began by developing a comprehensive capability map with detailed assessment of current maturity levels across 130+ Level 2 capabilities. • Portfolio Rationalization: The capability assessment revealed 38% application redundancy, leading to consolidation that reduced annual technology costs by $12.4 million. • Process Redesign: Capability analysis identified cross- functional process gaps in the product development capability, resulting in a 35% reduction in time-to-market for new products. • Technology Roadmap: The company developed a five-year technology investment plan directly aligned to capability enhancement priorities, improving budget approval rates by 45%. • Organizational Redesign: Clear capability ownership led to restructuring that eliminated seven management layers and created cross-functional teams aligned to key value streams. www.capstera.com 16

17. Did You Know Organizations that use capability maps to guide ▪ transformation achieve 2.3 times higher success rates in major change initiatives than those using traditional project portfolio approaches, according to recent research by a leading consulting firm. www.capstera.com 17

18. Common Pitfalls in Capability Mapping 13 Learn from others' experience to ensure your capability mapping initiative delivers maximum value for your F&B operation. • Excessive Detail: Avoid creating overly granular capability maps that become unwieldy and difficult to maintain; focus on the minimum level of detail needed for decision-making. • Process Confusion: Maintain clear distinction between capabilities (what the business does) and processes (how it's done) to preserve the stability and strategic value of the capability map. • Technical Terminology: Use business language rather than technical or system terminology in capability definitions to ensure broader understanding and adoption. • Static Approach: Remember that capability maps must evolve as the business changes, requiring governance and maintenance rather than one-time documentation. • Limited Engagement: Involve a broad cross-section of business and IT stakeholders in capability definition and assessment to ensure accuracy and buy-in. www.capstera.com 18

19. Practical Implementation Approach 14 Implementing capability mapping requires a thoughtful, incremental approach tailored to organizational readiness and specific business objectives. • Start With Purpose: Begin by clearly defining the specific business problems the capability map will address to ensure focus and demonstrate early value. • Level 1 First: Develop consensus on major capability domains before diving into detailed decomposition to establish the foundation for more detailed work. • Pilot Domain: Select a high-priority business area for initial detailed capability mapping to demonstrate value before expanding to the entire enterprise. • Existing Assets: Leverage industry reference models and existing architectural artifacts to accelerate development rather than starting from scratch. • Living Tool: Establish governance processes and tools to maintain the capability map as a living asset that evolves with the business rather than becoming outdated documentation. www.capstera.com 19

20. Future Trends in F&B Capability Mapping 15 The practice of capability mapping continues to evolve, with emerging trends reshaping how food and beverage manufacturers approach business and technology alignment. • Ecosystem Extension: Capability maps are expanding beyond enterprise boundaries to include partner and supplier capabilities in end-to-end value networks. • Digital Twins: Advanced organizations are creating digital representations of their capability maps that simulate performance and test transformation scenarios. • AI-Enhanced Analysis: Machine learning is increasingly applied to capability data to identify patterns, predict impacts, and recommend optimization strategies. • Real-Time Monitoring: Leading companies are implementing dashboards that track capability performance metrics in real- time for continuous improvement. • Capability Marketplaces: Forward-thinking enterprises are evaluating capabilities as services that can be sourced from specialist providers rather than built internally. www.capstera.com 20

21. Takeaway Business capability mapping provides food and beverage manufacturers with a powerful lens for understanding, optimizing, and transforming their operations and technology landscape. Capability maps bridge the traditional divide between business strategy and technology implementation by creating a comprehensive, business-focused view of what the organization does to deliver value. When properly developed and applied, they reveal hidden redundancies, critical gaps, and strategic opportunities that remain invisible in traditional functional or process views. For F&B companies navigating unprecedented market volatility and digital transformation, capability mapping isn't just a methodology—it's an essential navigation system for sustainable competitive advantage and operational excellence. 21 www.capstera.com 21

22. Next Steps 1. Conduct a quick assessment of your organization's capability awareness by asking key executives to identify and prioritize your most critical business capabilities. 2. Select one strategic initiative currently underway and retrospectively map it to the capabilities it will enhance to demonstrate the value of capability-based planning. 3. Identify one high-priority business domain (such as product development or supply chain) for an initial capability mapping pilot. 4. Develop a simple capability-to-application map for a focused area to identify potential redundancies and gaps in technology support. 5. Create a capability governance team with representatives from both business and technology domains to guide ongoing mapping and assessment efforts. 6. Establish a capability maturity| baseline for your priority domain to identify immediate improvement opportunities that can deliver quick wins. 22 www.capstera.com 22

23. 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.) 23 www.capstera.com 23

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