IT has been and is expected to be the main driver of productivity in the coming years. However, many companies are struggling to take advantage of the opportunities it provides. By building on resource-based view of the firm, dynamic capabilities framework, systems thinking, and two well established conceptualizations of an organization, in this article the ‘pyramid model' to conceptualize an organizational capability is suggested. The model provides a foundation for business need-driven IT investment design. It is applicable for all types of organizational capabilities at any level of an organization. The ‘pyramid model' is demonstrated with a case example. It is expected to be highly valuable in practice helping to design and justify investments to meet the business needs and to drive productivity.