Business Analysis Techniques

123 essential tools for success

James Cadle, Debra Paul, Jonathan Hunsley, Adrian Reed, David Beckham, Paul Turner

• Publisher: BCS, The Chartered Institute for IT
• Year: 2021
• ISBN:
  9781780175713
• Edition: 3
• Topic: Commerce
• Subtopic: Commerce Général

Business analysts are generally charged with the investigation of ideas and problems. Their role is to formulate options for a way forward and produce business cases setting out conclusions and recommendations. The development of business analysis as a professional discipline has extended the role of the business analyst who now needs the widest possible array of tools. This new edition provides 123 possible techniques and applies them within a framework of stages such as "Investigate Situation", "Define Requirements" and "Manage Change".

1 STRATEGIC CONTEXT

INTRODUCTION

The development of business analysis as a professional discipline has extended the role and responsibilities of the business analyst (BA). Increasingly, BAs are engaged early in the business change lifecycle. They collaborate with a range of different stakeholders and other roles to investigate ideas and problems, formulate options and produce business cases setting out their conclusions and recommendations. As a result, in project-driven change environments, this initial analysis work will often precede the initiation of a formal project and the assignment of a project manager.

The early engagement of BAs places a critical responsibility upon them: the need to ensure that all business changes are in line with the vision, mission, objectives and strategy of the organisation. This business context is the key foundation for understanding and evaluating all ideas, proposals, issues and problems put forward. While few BAs are directly involved in analysing and developing organisational strategy, it is vital that they know about the strategy of their organisation so that they can conduct their work with a view to supporting its implementation and the achievement of the business objectives. Therefore, it could be argued that BAs have responsibility for the following areas:

• Identifying the tactical options that will address a given situation and will support the delivery of the business strategy.
• Defining the tactics that will enable the organisation to achieve its strategy.
• Supporting the implementation and operation of those tactics.
• Redefining the tactics after implementation to take account of business changes and to ensure continuing alignment with business objectives.
• Maintaining an awareness of the external business environment.
• Working with other stakeholders such as product managers and product owners to develop the medium- and long-term strategy for a product or service and aligning this with the broader organisational strategy.

Given the increasing emphasis on early-engagement business analysis, and the need for this work to align with the business strategy and objectives, an understanding of strategic analysis techniques is essential across all of the business analysis services in the BA Service Framework (BASF).

This chapter describes a range of techniques for carrying out strategic analysis and definition, plus techniques to monitor ongoing performance. The following four areas are covered:

• strategy analysis, including external environment and internal capability;
• strategy definition;
• strategy implementation;
• performance measurement.

External environment analysis (Techniques 1–2)

Organisations must assess and address changes that have arisen, or can be predicted to arise, within their operating business environment. Such changes occur constantly, and any organisation that fails to identify and respond to them runs the risk of encountering business problems or even the failure of the entire enterprise. Senior management should carry out regular monitoring of the business environment in order to identify any influences that may require action.

The techniques covered in this section are:

• PESTLE analysis;
• Porter’s five forces analysis.

Internal environment analysis (Techniques 3–6)

These techniques are used to analyse the internal capability of an organisation to gain insights into its areas of strength and its inherent weaknesses, and to identify possible strategic approaches available to the organisation.

The techniques covered in this section are:

• Ansoff’s matrix;
• growth share matrix;
• resource audit;
• VMOST analysis.

Strategy analysis (Techniques 7–11)

During strategy definition, the results of the external and internal environmental analyses are summarised and consolidated in order to examine the situation facing the organisation and identify possible courses of action. When defining the business strategy, the factors outside the management’s control are examined within the context of the organisation and its resources.

The techniques covered in this section are:

• business model canvas;
• cultural web;
• business capability model;
• information concepts model;
• SWOT analysis.

Performance measurement (Techniques 12–14)

All organisations need to monitor performance. This section explains three techniques used to identify performance measures and carry out the performance evaluation.

The techniques covered in this section are:

• balanced scorecard;
• critical success factors;
• key performance indicators.

EXTERNAL ENVIRONMENT ANALYSIS

Technique 1: PESTLE analysis

Variants/aliases

Variants: PEST (political, economic, socio-cultural, technological); STEEPLE (socio-cultural, technological, environmental (or ecological), economic, political, legal, ethical).

Alias: PESTEL (political, economic, socio-cultural, technological, environmental (or ecological), legal).

Description of the technique

PESTLE analysis provides a framework for investigating and analysing the external environment for an organisation. The framework identifies six key areas that should be considered when attempting to identify the sources of change. These six areas are shown in Table 1.1.

Using PESTLE analysis

The PESTLE analysis technique is usually used in a meeting or workshop where a variety of ideas and opinions can be sought. Representatives from a range of functions should be present so that they can provide specialist information. For example, legal representatives would be able to provide information about changes to relevant laws and regulations. It is a good idea for departmental representatives to research any aspects that may impact the organisation prior to carrying out a PESTLE analysis. This could involve obtaining reports from research providers such as Dun & Bradstreet or Gartner.

Table 1.1 PESTLE description

Category	Description
Political	Examples of political factors could be a potential change of government, with the corresponding changes to policies and priorities, or the introduction of a new government initiative. These may be limited to the home country within which the organisation operates, but this tends to be rare these days since many changes have an effect in several countries. The development of bodies such as the European Union (EU) and the growth of global trade and multinational organisations have changed the scope of political activity. This has increased the possibility of political issues arising that may impact upon the organisation and how it operates.
Economic	Economic factors may also be limited to the home country, but as global trade continues to grow, economic difficulties in one nation tend to have a broad, often worldwide, impact. Examples of economic factors could be the level of growth within an economy, or market confidence in the economies within which the organisation operates. The economic impact of the United Kingdom (UK) leaving the EU, and its impact on domestic UK businesses, is a recent example.
Socio-cultural	Socio-cultural factors are those arising from customers or potential customers. These changes ca...