Explore The Best Business Analysis Techniques for Strategic Planning
Companies face an ever-changing set of challenges, including new competitors, market changes, and new regulations. Those who can identify these issues early on and implement solutions are more likely to be successful in the long run.
It might seem like a lot of hard work, but it is achievable.
Business Analysis! It is the key to your long-awaited success.
Owners and managers can accomplish this by conducting business analysis. This blog will go over some Business Analysis Techniques you can use to evaluate your business and grow it beyond its potential!
Let's explore what they are! #ThinkWithNiche #TWN
“What is Business Analysis?”
Here’s a simple answer:
The process of identifying business needs, lending, and determining solutions to business problems is known as business analysis. Sounds like shooting fish in a barrel?
Not really! It isn’t that simple!
Business analysis entails developing techniques to create an appropriate plan and putting it into action. It is one of the most important pillars of a business configuration because it is how business analysts break down large problems into smaller ones and determine how much money and labor will be needed to solve the problem.
In today’s dynamic business environment, companies that can identify problems and stick to solutions have a better chance of success than those that can't.
Already sold? Not yet, okay! Here’s how business analysis can benefit your business:
Importance of Business Analysis
Here is a breakdown of the true value of business analysis in a company or business.
To understand where a business stands, it is critical to assess its ROI (Return on Investment); the ROI measures the business's valuation and whether revenue is increasing or decreasing.
Business analysis can tell you whether you need to make additional changes to increase ROI, such as lowering costs while increasing benefits, or vice versa.
Using business analysis to develop various strategies to reduce project costs, briefing the team on how to work appropriately and what strategies can help reduce company costs is critical. It also opens up new avenues for finding cost-effective solutions to recurring problems.
The most crucial aspect of business analysis is making decisions on behalf of the company to stakeholders or investors. Logical discussions about how the company has been operating, what the problem areas are, what factors are governing the increase in overall company expenditure, and how to achieve a higher margin of profit are factors that influence decision making and provide clarity on the business's future path.
Understands Business Requirements
The goal of business analysis is to thoroughly understand the business and what requirements are required for its growth, as well as to identify any impediments to that growth.
Business analysis assists in making various decisions that influence the organization's growth, such as the analysis of processes and data that will pave the way for a lucrative situation.
That’s how profound Business Analysis’ importance is to any business!
I won’t leave you just yet! I’ll walk you through the key business analysis techniques that will make your business a successful venture.
5 Important Business Analysis Techniques for your Management Toolkit
Let’s learn about some of the most essential business analysis techniques. You'll have some promising strategies to potentially employ the next time you encounter a business problem and have to make an important decision.
1. SWOT Analysis
SWOT is an acronym for strengths, weaknesses, opportunities, and threats. Such kind of analysis offers an effective overview of a company, allowing it to seize opportunities, recognize weaknesses, and capitalize on its strengths.
Let's look at some of the questions that businesses or teams often ask themselves while conducting a SWOT analysis.
- Strengths: What do we excel at? What are our internal resources? What are our advantages over our competitors?
- Weaknesses: What is lacking in our company, team, or organization? Where do we fall short of our competitors?
- Opportunities: Are there any external opportunities or changes that our organization could benefit from?
- Threats: Is our competition about to make a significant change that will jeopardize our viability? Are our supplier prices rising? Is there a shift in consumer behavior or in the economy?
This method can be applied in a variety of decision-making situations. Established organizations could use the SWOT analysis to assess a changing culture or environment and devise proactive responses. SWOT analysis can help new businesses plan because it forces decision-makers to look both inwardly and outwardly to determine the best course of action. This analysis should ideally be conducted with the participation of multiple stakeholders to avoid blind spots in the decision-making process.
Although the SWOT analysis technique can help you generate many great ideas, it is your responsibility to prioritize them and turn them into strategies. Take a look at how your opportunity and strength columns intersect. How can you make the most of the opportunities that align with your strengths to maximize your chances of success? Similarly, you can minimize threats by evaluating them in light of your strengths.
2. Business Process Modeling (BPM)
A business process model, also known as a business process mapping, is a graphical representation of a company's processes. The goal is to create a visualization of existing processes to find areas for greater efficiency and overall improvement. These visualizations can be used to demonstrate the current state of work as it is or to demonstrate how it would function with improvements or changes.
This type of analysis is excellent for providing a big-picture view of how a task is completed and aiding in the identification of any inefficiencies or redundant steps along the way. These maps can also aid in employee onboarding by clearly defining who is responsible for what and providing a road map for each stakeholder's next steps.
3. MOST Analysis
The MOST analysis technique is a method for setting goals at all levels. This approach ensures that your organization's most important goals remain in focus. This acronym's elements build on and connect to one another. Let's take a closer look at what each of them means:
- Mission: The organization's long-term goal. All other sections of MOST and decisions should be evaluated in light of this mission.
- Objectives: What the company must do to achieve its mission. These goals should be "SMART" (Specific, Measurable, Achievable, Realistic, and Timely).
- Strategy: Consists of specific steps to achieving your goals that shape what is done and how it is done.
- Tactics: They are small and efficient methods for carrying out strategies that can be carried out even if the big picture is not understood.
Let's look at an example to see how all of the components of MOST interact with one another.
- Mission: A pet grooming company aspires to be the best and busiest pet grooming business in their city.
- Objectives: Increase sales by 5% next month.
- Strategy: Invest in additional marketing efforts, such as local radio.
- Tactics: Create a script, sign a deal with a radio station, and hire a voiceover artist.
The MOST analysis technique is an excellent way to divide a large goal into manageable steps and ensure that it aligns with your company's top priorities.
4. PESTEL Analysis
PESTEL analysis is used to monitor macro-environmental factors that may have a positive or negative impact on the company. This is especially useful when determining the best time and strategy for launching a new product, project, or service. The PESTEL analysis can also be used to assist in the creation or evaluation of the various sections of a SWOT analysis, particularly threats and opportunities. Each letter of the acronym PESTEL stands for a different environmental factor that must be addressed.
- Political: What is the current political situation on a local, state, federal, and international level, and how might it affect our industry?
- Economic: What are the most important economic factors? Inflationary pressures? Consumer purchasing power? What about interest rates? What about currency exchange rates? Growth Patterns?
- Social: What are the present and projected cultural trends? What are the demographic trends? How are purchasing habits changing?
- Technological: What innovations, such as automation, communication, or production, are likely to have an impact on your market or industry?
- Environmental: What effect do environmental factors have on our plans? Will they be long-term? Will climate trends or changes have an impact on how we operate?
- Legal: What steps we must take to comply with the law? Is there any proposed legislation that could affect how we operate? Is it likely that it will pass?
Because these factors can change frequently, a company's PESTEL analysis must be adjusted accordingly to remain relevant. Because deciding which factor to address first can be tricky, the PESTEL analysis is best combined with a SWOT analysis for optimal strategic planning.
CATWOE is a framework for strategic analysis and problem solving that can be applied to a variety of scenarios. This method, defined by Peter Checkland as part of his Soft Systems Methodology, can be used to consider a problem, goal, or strategy and how it will affect the business and stakeholders in general. Take a look at what is being considered with this approach:
- Clients: The end-users of a process or a system. What are their current issues? What will their reaction be to your proposed solution?
- Actors: Individuals who are responsible for implementing changes to a process system. Who will be in charge of implementing this change? What is the impact of this project or change on them?
- Transformation: The changes that result from implementing this solution or new process.
- Worldview: How does this issue or proposed change fit into the overall goals of the organization?
- Owner: Who are the decision-makers with the authority to make changes, halt projects, and make critical decisions? What is their current issue? And how will they respond to what is proposed?
- Environmental constraints: There are ethical boundaries, laws, financial constraints, and regulations to consider. What are the overarching constraints affecting your ideas or plans?
CATWOE is more effective when created at the start of a project or brainstorming process, as it can help give direction to a project while also assisting stakeholders and actors in avoiding future headaches.
Are you Ready to Lead in Business?
These business analysis techniques and frameworks are a great place to start for almost any decision-making process and can help you run projects more effectively. However, if you intend to make decisions at a higher level, you may require additional assistance.
In my next blog, I will discuss some of the best business analysis tools that will put you in the driver's seat when battling any business challenge.
In the meanwhile, if you have enjoyed reading this Blog, TWN recommends you to read our Blog on "What Are The Key Essentials of Being A Business Analyst, A TWN Exclusive." Click on the Image Below!