Business Capability Mapping for Medical Device Companies

1. Medical Device Excellence Through Capability Mapping www.capstera.com 1

2. Map your capabilities today, and revolutionize your medical innovations tomorrow. Manufacturers face unprecedented complexity in the highly ▪ regulated and rapidly evolving medical device industry: increasing regulatory scrutiny, accelerating technological advancement, shifting customer expectations, and intensifying global competition. Success requires operational excellence and strategic clarity about where to invest, how to differentiate, and which capabilities to prioritize. Business Capability Maps provide medical device ▪ manufacturers with a powerful lens through which they can visualize their enterprise as a structured set of abilities rather than departments or processes. By creating this architectural foundation, organizations can align strategy with execution, optimize operations across silos, and rationalize technology investments to support their most critical functions. The result is a transformed organization capable of delivering life-changing innovations while maintaining the stringent compliance and quality standards the industry demands. www.capstera.com 2 2

3. Understanding the Capability Mapping Imperative for Medical Device Manufacturers 1 Medical device companies operate in an environment where strategic missteps can have profound consequences for patient safety, regulatory compliance, and market viability. Business Capability Maps provide the foundation for sound strategic decision-making by creating clarity about organizational functions. Regulatory Complexity Navigation: A structured capability ▪ framework enables medical device manufacturers to systematically address the demands of multiple regulatory regimes without creating redundant or conflicting processes. Strategic Blind Spot Elimination: By documenting capabilities ▪ comprehensively, organizations uncover critical functions that may be underinvested or overlooked in traditional functional hierarchies. Common Language Creation: Capability Maps establish a shared ▪ vocabulary that allows clinical, technical, regulatory, and commercial stakeholders to discuss strategic priorities without getting lost in implementation details. Investment Prioritization: Mapping capabilities to strategic ▪ objectives creates clear visibility into which organizational functions most directly drive competitive differentiation and regulatory compliance. Organizational Alignment: A capability perspective transcends ▪ departmental boundaries, revealing how different parts of the organization must collaborate to deliver essential medical device functions. www.capstera.com 3

4. The Anatomy of a Medical Device Business Capability Map 2 A well-structured capability map for medical device manufacturers provides a comprehensive view of what the organization does, organized in a hierarchical framework that balances breadth and depth. ▪ Capability Hierarchy Construction: Organize capabilities in a three-tiered structure with Level 1 representing major enterprise functions, Level 2 showing component capabilities, and Level 3 detailing specific operational abilities. ▪ Industry-Specific Categories: Ensure your capability framework incorporates medical device-specific domains like Quality Management, Regulatory Affairs, and Clinical Evidence Development alongside universal business functions. ▪ Capability Relationship Mapping: Document dependencies between capabilities to understand how strengthening one organizational function affects others in the capability ecosystem. ▪ Capability Definition Standards: Define each capability with consistent attributes including purpose, outcomes, metrics, information needs, and regulatory significance. ▪ Visualization Techniques: Design your capability map visualization to support heat mapping of strategic importance, performance gaps, and technology enablement for executive communication. www.capstera.com 4

5. Strategic Alignment Through Capability Mapping 3 Business Capability Maps transform strategic planning for medical device manufacturers by directly connecting strategic objectives to the organizational functions that enable them. ▪ Strategy Decomposition: Break down strategic goals into the specific capabilities required to achieve them, creating clear line-of-sight from executive vision to operational reality. ▪ Capability Gap Analysis: Identify misalignments between strategic priorities and capability investments, revealing areas where critical functions lack adequate resources or focus. ▪ Competitive Differentiation Identification: Determine which capabilities truly differentiate your medical devices in the marketplace versus those that must simply meet industry standards. ▪ Strategic Option Evaluation: Use capability mapping to assess strategic alternatives by analyzing how different approaches would leverage existing strengths or require new capability development. ▪ Regulatory Strategy Integration: Embed regulatory requirements into capability definitions to ensure compliance is considered as a strategic imperative rather than an operational afterthought. www.capstera.com 5

6. Operational Excellence Through Capability Perspective 4 For medical device manufacturers, operational optimization requires a cross-functional perspective that traditional process approaches often miss. Capability mapping breaks down silos to reveal operational interdependencies. ▪ End-to-End Value Stream Visibility: Map capabilities to value streams to identify how operational functions connect across departmental boundaries to deliver patient and provider value. ▪ Redundancy Identification: Uncover duplicated capabilities that create unnecessary complexity, cost, and compliance risk in your medical device operations. ▪ Capability Ownership Clarification: Establish clear accountability for each capability to ensure someone is responsible for its performance, maturity, and compliance. ▪ Performance Measurement Standardization: Develop consistent metrics for each capability to objectively assess operational excellence across diverse medical device functions. ▪ Process Optimization Prioritization: Focus improvement efforts on processes that support the most strategically important or problematically performing capabilities. www.capstera.com 6

7. Did You Know ROI Impact: Medical device manufacturers with mature ▪ capability mapping practices reduce their new product development cycles by an average of 24% while maintaining regulatory compliance, according to recent industry research. www.capstera.com 7

8. Technology Rationalization Through Capability Lens 5 Medical device manufacturers often struggle with fragmented technology landscapes that create compliance risks and operational inefficiencies. Capability mapping provides the foundation for strategic technology alignment. ▪ Application-to-Capability Mapping: Document which systems support each capability to identify coverage gaps, redundant systems, and critical single points of failure. ▪ Technology Portfolio Assessment: Evaluate how well existing applications enable key capabilities to identify priorities for technology investment or consolidation. ▪ Architecture Decision Guidance: Use capability needs to drive technology architecture choices, ensuring investments align with strategic priorities and regulatory requirements. ▪ Legacy Modernization Planning: Identify which legacy systems support critical capabilities to prioritize modernization efforts based on business impact rather than just technical debt. ▪ Technology Investment Justification: Build stronger business cases for technology investments by directly connecting them to capability improvements with strategic significance. www.capstera.com 8

9. Regulatory Excellence Through Capability Architecture 6 For medical device manufacturers, regulatory compliance is not just an obligation but a critical capability domain that requires systematic architectural support. ▪ Compliance Requirement Mapping: Associate specific regulatory requirements with the capabilities responsible for satisfying them, creating traceability from regulations to organizational functions. ▪ Regulatory Change Impact Analysis: Quickly assess how new regulations affect your capability landscape, identifying which functions need adjustment to maintain compliance. ▪ Quality System Integration: Embed quality system requirements directly into capability definitions to ensure compliance is architected into operations rather than added retrospectively. ▪ Audit Readiness Enhancement: Use capability assessments to identify and remediate compliance gaps before regulatory inspections or notified body audits occur. ▪ Documentation Architecture: Design information flows between capabilities to ensure complete, current documentation for regulatory submissions and compliance documentation. www.capstera.com 9

10. Innovation Acceleration Through Capability Focus 7 In the medical device industry, innovation must coexist with strict quality and regulatory requirements. Capability mapping helps balance these seemingly conflicting imperatives. ▪ Innovation Capability Identification: Clearly define the capabilities that drive innovation, such as needs identification, concept development, and technology scouting. ▪ Innovation Ecosystem Orchestration: Map relationships between innovation capabilities and supporting functions in quality, regulatory, and manufacturing to create a coordinated approach. ▪ Capability Experimentation Framework: Establish mechanisms for testing new capability models in controlled environments before full-scale implementation. ▪ Emerging Capability Monitoring: Systematically track new capabilities emerging in the industry to identify opportunities for strategic differentiation or necessary catch-up. ▪ Innovation Resource Allocation: Direct innovation investments toward capabilities with the greatest strategic impact rather than spreading resources across too many initiatives. www.capstera.com 10

11. Mergers & Acquisitions Optimization Through Capability Assessment 8 Medical device industry consolidation continues at a rapid pace. Capability mapping provides a structured approach to evaluating targets and planning integration. ▪ Due Diligence Enhancement: Use capability mapping to conduct more thorough target evaluation that identifies valuable capabilities, gaps, and integration challenges. ▪ Capability Complementarity Analysis: Assess how acquisition targets would enhance your capability portfolio to identify true synergies versus overlapping functions. ▪ Integration Planning Framework: Develop detailed integration approaches for each capability, deciding whether to combine, maintain separate, or completely redesign functions. ▪ Cultural Compatibility Assessment: Evaluate how capabilities are executed in both organizations to identify potential cultural integration challenges. ▪ Day One Readiness Planning: Identify critical capabilities that must function seamlessly from day one post-acquisition to maintain regulatory compliance and business continuity. www.capstera.com 11

12. Did You Know Digital Investment Effectiveness: A 2024 study of medical ▪ technology companies found that those using capability maps to guide digital investments achieved 37% higher returns than those making technology decisions without capability alignment. www.capstera.com 12

13. Outsourcing Strategy Through Capability Classification 9 Medical device manufacturers increasingly rely on partners for specialized capabilities. Capability mapping provides the framework for sound sourcing decisions. ▪ Strategic Versus Commodity Classification: Categorize capabilities based on their strategic importance to identify which functions should remain internal versus those that can be outsourced. ▪ Partner Capability Assessment: Evaluate potential partners based on their demonstrated capabilities in specific medical device functions rather than general reputation. ▪ Governance Model Development: Design oversight mechanisms proportional to the strategic importance and regulatory significance of outsourced capabilities. ▪ Transition Risk Analysis: Assess the complexity and risk of transitioning capabilities to partners based on process maturity, documentation quality, and regulatory impact. ▪ Capability Reintegration Planning: Develop contingency plans for bringing critical capabilities back in-house if partner performance or strategic conditions change. 13 www.capstera.com 13

14. Talent Strategy Alignment Through Capability Perspective 10 The specialized capabilities required in medical device manufacturing demand a systematic approach to talent development and acquisition aligned with strategic priorities. ▪ Capability Skill Mapping: Document the specific skills, certifications, and experience required to perform each capability at various levels of maturity. ▪ Critical Capability Talent Risk: Identify capabilities where specialized knowledge is concentrated in a small number of individuals, creating organizational vulnerability. ▪ Targeted Development Investment: Focus training and development resources on building competencies for the most strategically important capabilities. ▪ Succession Planning Framework: Use capability requirements to design career paths that ensure knowledge transfer for critical medical device functions. ▪ Organizational Design Optimization: Structure teams and departments around related capabilities rather than arbitrary functional divisions to improve collaboration and knowledge sharing. www.capstera.com 14

15. Digital Transformation Through Capability Evolution 11 Medical device manufacturers face increasing pressure to digitize operations while maintaining regulatory compliance. Capability mapping guides this digital evolution. ▪ Digital Maturity Assessment: Evaluate the current digital enablement of each capability to identify priorities for technology enhancement. ▪ Transformation Sequence Planning: Create logical capability digitization roadmaps that build foundational capabilities before attempting advanced digital functions. ▪ Cross-Capability Integration: Identify opportunities to connect previously siloed capabilities through digital platforms, creating new sources of insight and efficiency. ▪ Validation Strategy Development: Design appropriate validation approaches for each capability being digitized based on its regulatory significance and risk profile. ▪ Change Management Focus: Concentrate organizational change efforts on the capabilities undergoing the most significant digital transformation to ensure adoption. www.capstera.com 15

16. Building the Business Case with Capability-Based Metrics 12 To secure investment for capability development, medical device manufacturers need compelling business cases that connect capability improvements to measurable business outcomes. ▪ Value Driver Mapping: Connect each capability to specific business value drivers such as time-to-market, compliance cost, quality metrics, or customer experience. ▪ Baseline Performance Establishment: Document current capability performance levels to create a starting point for measuring improvement and calculating ROI. ▪ Investment Prioritization Framework: Develop a consistent methodology for evaluating capability investments based on strategic importance, performance gaps, and implementation complexity. ▪ Benefit Realization Planning: Create specific metrics and measurement approaches for tracking how capability enhancements deliver expected business benefits. ▪ Executive Communication Approach: Design capability- based reporting that helps leadership understand how investments in organizational functions translate to strategic outcomes. www.capstera.com 16

17. Did You Know Regulatory Efficiency: Medical device manufacturers that ▪ map regulatory requirements to specific capabilities experience 42% fewer compliance findings during regulatory inspections compared to those using traditional documentation approaches. www.capstera.com 17

18. Practical Implementation of Capability-Based Planning 13 Transitioning to capability-based strategic planning requires new processes and governance mechanisms that medical device manufacturers can systematically implement. ▪ Capability Governance Establishment: Create cross- functional governance bodies responsible for capability definition, prioritization, and performance monitoring. ▪ Strategic Planning Integration: Embed capability assessment and planning into annual strategic planning processes to ensure capability development aligns with strategic goals. ▪ Investment Approval Alignment: Modify project and investment approval processes to evaluate proposals based on their contribution to priority capability enhancements. ▪ Performance Review Adaptation: Adjust operational performance reviews to include capability-based metrics alongside traditional financial and operational measures. ▪ Continuous Capability Refinement: Establish processes for regularly updating capability definitions as the business evolves, regulations change, and new technologies emerge. www.capstera.com 18

19. Capability Mapping Methodology for Medical Device Manufacturers 14 Creating a comprehensive capability map requires a structured methodology tailored to the unique requirements of medical device manufacturing. ▪ Reference Model Utilization: Begin with industry reference models that already incorporate regulatory and quality capabilities specific to medical device manufacturing. ▪ Discovery Workshop Approach: Conduct structured sessions with subject matter experts to validate reference models and identify organization-specific capabilities. ▪ Documentation Standardization: Establish consistent templates for capturing capability definitions, ensuring they address regulatory context, information needs, and performance metrics. ▪ Validation Process: Verify capability definitions with operational leaders to ensure the map accurately reflects how the organization actually functions. ▪ Visualization Development: Create multiple views of your capability map to support different strategic discussions, from executive overviews to detailed functional analysis. www.capstera.com 19

20. Future-Proofing Through Capability Evolution Management 15 Medical device capabilities must continuously evolve to address emerging technologies, changing regulations, and shifting market dynamics. Systematic capability management ensures your organization remains prepared for the future. ▪ Emerging Capability Monitoring: Establish processes for identifying new capabilities that may become necessary due to technological or regulatory evolution. ▪ Capability Sunset Planning: Identify legacy capabilities that are becoming obsolete and develop plans for their systematic retirement. ▪ Maturity Roadmapping: Create capability maturity improvement roadmaps that guide long-term development of critical organizational functions. ▪ Ecosystem Capability Integration: Plan for the increasing interconnection of capabilities across organizational boundaries as healthcare becomes more networked. ▪ Adaptability Enhancement: Build flexibility into capability definitions to accommodate increasing personalization and specialization in medical device offerings. www.capstera.com 20

21. Takeaway Business Capability Maps provide medical device manufacturers with a powerful lens to align strategy, operations, and technology around the functions most critical to their success. By documenting what the organization does independently of how it does it, capability mapping creates a stable platform for navigating the complex and evolving medical device landscape. This architectural approach enables more effective strategic planning, streamlined operations across organizational boundaries, and technology investments that directly support critical business functions. For medical device leaders seeking to balance innovation with compliance, efficiency with quality, and strategic focus with operational excellence, capability mapping offers a proven framework for transforming organizational performance across all dimensions. 21 www.capstera.com 21

22. Next Steps 1. Assess Your Current State: Evaluate your organization's existing capability documentation and identify gaps in your architectural understanding of what your organization does. 2. Secure Executive Sponsorship: Present the strategic value of capability mapping to leadership, focusing on improved decision-making, regulatory compliance, and transformation acceleration. 3. Start With Strategic Priorities: Begin mapping capabilities in areas directly connected to your most pressing strategic initiatives to demonstrate value quickly. 4. Implement Capability Governance: Establish cross- functional ownership for maintaining and evolving your capability map as a living strategic asset. 5. Connect to Action: Use your emerging capability map to inform your next strategic planning cycle, technology roadmap, or organizational redesign initiative. 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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