Capability management aims to balance economy in meeting current operational requirements, with the sustainable use of current capabilities, and the development of future capabilities, to meet the sometimes competing strategic and current operational objectives of an enterprise. Accordingly, effective capability management:
- Assists organisations to better understand, and effectively integrate, re-align and apply the total enterprise ability or capacity to achieve strategic and current operational objectives; and
- Develops and provides innovative solutions that focus on the holistic management of the defined array of interlinking functions and activities in the enterprise's strategic and current operational contexts.
In military contexts, capabilities may also be analysed in terms of Force Structure and the Preparedness of elements or groupings within that Force Structure. Preparedness in turn may be analysed in terms of Readiness and Sustainability.
In both the military and commercial contexts, net-centric operations and related concepts are playing an increasingly important role in leading and driving business transformation, and contemporary capability management needs to have close regard of those factors. The level of interoperability, both technical and organisational/social, is a critical determinant of the net-centric capability that is able to be realised and employed.
Capability management topics 
Capability is the quality of being capable; to have the capacity or ability to do something, achieve specific effects or declared goals and objectives. Enterprises in essence consist of a portfolio or matrix of capabilities that are used in various combinations to achieve outcomes. Within that portfolio, a capability will be transient unless managed and maintained over time. Therefore, a typical capability lifecycle spans needs, requirements, acquisition, in-service and obsolescence/disposal phases.
While a highly developed management discipline within several national military organisations, the concepts, principles and practices of capability management are readily adaptable and effective for wide-ranging application in the strategy and operations of many other enterprises.
Defining capabilities in the US military 
The JCIDS Manual, CJCSM 3170.01, states that definitions of identified capabilities must satisfy two rules:
- Capability definitions must contain the required attributes with appropriate measures of effectiveness (e.g.: time, distance, effect [including scale] and obstacles to overcome).
- Capability definitions should be general and not influence a decision in favor of a particular means of implementation. The definition should be specific enough to evaluate alternative approaches to implement the capability.
Capabilities are organized around concepts of operations (CONOPS), because the CONOPS describe how a specified course of action is to be executed. The ability to execute the specified course of action depends on many factors and the relationship between those factors. Capabilities can be described as one or more sequences of activities, referred to as operational threads. The threads are composed of a set of activities that can be grouped to form the basis for a mission area architecture. The architecture then provides the structure for defining and understanding the many factors that impact the capability. The figure illustrates this sequence of relationships.
The Navy has also endorsed using architectures to understand and analyze capabilities and their associated requirements. The Navy performs this architecture analysis based on the concept of MCPs. The intent is to consider all of the factors that contribute to the desired mission capability as an integrated system. An MCP is defined as “a task-oriented bundle of CONOPS, processes, and organization structures supported by networks, sensors, weapons, and systems, as well as personnel training and support services to sustain a core naval capability.” The MCP and associated analysis then provide the basis for acquisition decisions.
Capability management considerations 
Due to the complexities of system-of-systems integration, interoperability, and the dynamic nature of operations, capability management is greatly assisted by modelling and simulating realistic strategic scenarios and contexts, in order to inform business cases and decision-making. Through those considerations and practices, the enterprise and its performance can be continuously assessed and projected into the future. Well executed capability management therefore clearly informs strategic and operational decisions, and aids in the development of diverse but well-considered strategic and operational options, so they are readily available off-the-shelf. This should also endow significant agility to an enterprise, providing enhanced "contingency capital" and risk mitigation.
Capability management therefore centres around:
- Strategic and operational appreciations and analyses
- Capability conceptualisation, definition and development
- Operations research and analysis
- Context or scenario-based capability modelling and simulation
- Capability costing
- Capital project business cases and management
- Decision making and decision support
- Capability assurance and performance management
Capability management frameworks 
The interlinking functions and activities of the enterprise may be defined under several best-practice paradigms or frameworks, such as the Balanced Scorecard (BSC), or the US Department of Defense Architecture Framework (DoDAF), The Ministry of Defence Architecture Framework (MODAF), The Open Group Architecture Framework (TOGAF) and Zachman's Framework for Enterprise Architecture. In other words, capability is typically managed and assessed with regard to several dimensions or integrative elements.
The US military analyses its capabilities in the dimensions of "DOTLMPF", being:
- Leader Development
Defence Lines of Development 
The UK MoD uses a similar breakdown of Defence Lines of Development (DLoDs) as follows:
- Concepts and Doctrine
The acronym "Tepid oil" is used to remember these. Additionally, though not a DLoD in itself, the unifying theme of 'interoperability' is also considered to ensure a holistic approach to capability integration is adopted.
The UK MoD cites Interoperability as an overarching theme that must be considered when any DLoD is being addressed.
Fundamental Inputs to Capability 
The Australian Defence Organisation also analyses its capabilities in similar dimensions - the so-called Fundamental Inputs to Capability. These are:
- Command and Management
- Major Systems
- Collective Training
These FIC must be tightly integrated and managed holistically within a defined or constraining financial envelope in order to realise and sustain a capability: a deficiency in any one adversely impacts the whole.
See also 
- DoD (2003). DoDAF 1.0 Deskbook 15 Aug 2003.