Abstract. The current paper summarizes the Capability Engineering Process (CEP) being developed to help decision making on strategic investments and divestments for the Canadian Forces and Department of National Defence. This effort is part of a technology demonstration effort called the Collaborative, Capability, Definition, Engineering and Management (CapDEM). The CEP introduces ways to increase strategic agility capability management in a world in constant evolution. A CEP application provides a set of options addressing a given capability gap. Among benefits, this process: (1) provides decision makers with timely strategic information through an iterative and incremental approach; (2) reduces time spent on unrealistic options by continuously pruning the solution space as early as possible; (3) provides operationally acceptable strategic options with direct involvement of the operational community into the solution development; and (4) provides feasible options by ensuring commitment and participation in developing solutions involving all of the organization's functional components: Personnel, R&D, Infrastructure, Concept development, Information management, and Equipment (known as PRICIE components in Canada).