Capability management is expected to contribute to a new level of productivity in developing and deploying IT-based business services offered by digital enterprises to their customers. Work on capability management so far emphasizes the technology perspective of capability design and delivery. The paper addresses the question of what is the potential of capability management with respect to business model innovation by considering a case study from business process outsourcing as an example. The aim is to apply an established business model conceptualization as a framework for analyzing the case study and to compare the possibility of identifying business innovations with and without defined capability characteristics.