The Most Effective Business Analysis Techniques
When it comes to the business process, problems are inevitable. With the advancement of technology, several possible solutions now exist to tackle business issues and needs. However, knowing which solutions are best for a particular organization's needs requires a great level of expertise.
This is because what works for one type of business may not work for another of a different size or in a different industry. In fact, even businesses in the same industry cannot always apply the same business rules and solutions. Hence, business analysis has a major role to play in the success of a business, and ultimately, whether or not the business benefits profitable returns on investment.
In addition, business analysis is also applicable for non-profit organizations to achieve their desired goals. There are several analysis techniques business analysts employ to provide the best solutions to businesses. But first, here is a brief overview of the concept of business analysis.
What is a Business Analysis?
Essentially, business analysis can be described as a high-level process of identifying and analyzing business needs, goals, and objectives to intelligently create strategies and solutions that foster business growth and development. The analysis process encompasses different stages and techniques to ensure value is provided to customers, shareholders, employees, and all other stakeholders of the business.
One of the simplest ways to define the business analysis process is agent of change. This means that the process of business analysis must bring about a change in the way business is carried out. Business analysts are required to seek alternative and new ideas using software development, data analytics, data modeling, project management, user stories, and other analysis tools to make sure the business achieves its goals.
Top Seven Business Analysis Techniques
Business analysis techniques refer to the methods used to identify business problems and ultimately, solve these problems. This is where the majority of the work is and requires analysts to possess both technical skills (e.g. software management, critical thinking) and non functional or soft skills (e.g. emotional intelligence, relationship-building).
Mastering these skills plays a significant role in the effectiveness of a business analysis strategy. While there are several analysis techniques used by business analysts, the most effective include-
1. SWOT Analysis
As one of the most commonly used techniques, SWOT Analysis cuts across different industries and business types. SWOT is short for Strengths, Weaknesses, Opportunities and Threats.
This method of analysis combines knowledge of internal factors (strengths, weaknesses) and external factors (opportunities, threats) to determine the most suitable business solutions. The Strengths of a business refer to the competitive advantages it has, such as brand image or customer service. Weaknesses can be location, company size and even brand reputation.
On the other hand, opportunities can come in the form of investment in other businesses or startups, partnerships or collaborations. Threats exist when competitors have an edge over the business in one way or the other.
2. PESTLE Analysis
PESTLE represents Political, Economical, Social, Technological, Legal and Environmental factors that affect the business life cycle and operation.
Political factors refer to government policies as they have a significant effect on the growth and operations of any business under that jurisdiction.
Similarly, Legal factors include copyright, insurance and health laws, while Economical factors refer to inflation, unemployment, economic growth and business environment.
Social factors play a major role in business profitability and target market; these include population growth, age distribution and consumer trends. As the world continues to evolve, technology has taken over the business environment. Technological factors such as automation, innovation and software solutions must be considered in the analysis of a business. Lastly, Environmental factors include climate change and pollution.
3. MoSCoW (Must or Should, Could or Would)
One of the most important functional requirements of a business analyst is the ability to choose between alternatives. The MoSCoW technique involves asking questions of necessity. This way, each business problem is assessed as to whether resources should be allocated to solve it or put to better use for a different problem.
4. Six Thinking Hats
This is a business analysis technique that can be described as the different thought processes used to solve business problems. These hats are categorized according to their colors as follows-
- Blue The control hat, which involves setting guidelines, plans, and focus
- Yellow The optimistic hat, used for seeing the positive side of things
- Black The judging hat, used for critical judgment and logic
- White The factual hat, which refers to acquiring all important information
- Green The creative hat, used for generating ideas and alternatives
- Red The intuition hat, which uses feelings and instincts
5. Business Model Analysis
This is simply process modeling and analysis based on the business model. The technique involves analyzing policies, key market factors and revenue plan to determine how the business model can be improved or changed entirely.
In addition, business analysts that use this technique must weigh the effects of business process modeling and ultimately, changing the business model.
6. Mind Mapping
Mind mapping is a technique used not only in the business analyst career path but in education and various levels of management in organizations. Mind mapping is basically creating a visual representation of thoughts, plans and ideas in order to arrive at a concluding strategy.
In business analysis, this involves strategic planning and mapping out factors affecting the business, as well as all information necessary to improve the decision-making process.
7. The 5 Ways
This method uses five questions to help businesses determine the root cause of a problem. The answers to these questions serve as a root cause analysis which is then used to create corresponding solutions.
While there is no set format for the five questions, the process begins with one general question about why a problem exists in the first place. The next question is a follow-up question based on the answer to the first. Then the third question follows up the second, and so on.
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