What is the Decompose by Business Capability pattern and how do you identify business capabilities?

The Decompose by Business Capability pattern assigns one microservice per business capability — a stable, high-level function the organisation performs to deliver value. A business capability answers "what does this part of the business do?" not "how does the software do it?", so capabilities make durable service boundaries that outlast technology changes.

For an online retailer, a first-pass capability map might look like: Order Management (placement, tracking, cancellations), Inventory Management (stock levels, reservations, replenishment), Customer Management (profiles, preferences, loyalty), Payment Processing (authorisation, settlement, refunds), and Fulfilment (pick, pack, dispatch). Each becomes a microservice candidate.

How to identify capabilities in practice:

• Capability mapping workshops — work top-down with business stakeholders. Ask "what does this team do?" rather than "what systems do they use?". Group answers into named, stable functions.
• Organisational alignment — each recognisable business unit typically owns one or more capabilities. Conway's Law predicts that service structure will mirror team communication patterns.
• Stability test — a valid capability has existed for years and will persist even if the technology stack is replaced entirely. "Accept and fulfil orders" has been a retail capability since long before e-commerce.
• Independence check — if a capability can be changed and deployed without touching a sibling capability, it is a good service boundary. Frequent cross-team coordination to deploy one service is a signal that the boundary is wrong.

Sub-capabilities (e.g., Refunds within Order Management) may become separate services only when they evolve at a different pace, have distinct scaling needs, or are owned by a dedicated team. The deliverable is a capability map — a living diagram that drives service topology and team ownership throughout the programme.

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