Business analysts play a key role in guiding company decisions. With the right business analysis techniques, they identify gaps, understand what the business needs, and turn data, requirements, and observations into clear insights that leaders can use. In this blog, we break down major business analysis techniques using practical examples.
Table of Contents:
What is Business Analysis?
Business analysis plays a key role in understanding and optimizing business processes to boost efficiency and growth. As companies seek to adapt to rapidly changing conditions, the demand for a skilled business analyst who can bridge the gap between organizational requirements and digital solutions has never been greater.
We will look at the top 10 most commonly used business analysis techniques, including SWOT, PESTLE, and more. Even if you are new to the world of business analysis or looking for a boost in your expertise, this guide will assist you in mastering the methods that lead to strong business outcomes.
Why is Business Analysis Important?
Having a business analyst who understands your domain can help your company significantly. Business analysis may help you get a better return on your investment and save money by reducing rework and avoiding unclear requirements. They provide a framework or structure for business processes, anticipating future issues, and understanding the company’s current situation.
Who is a Business Analyst?
A business analyst is a specialist who evaluates an organization’s business operations and connects business teams with IT. They support the adoption of new technology but do not implement it themselves. Along with this, they identify business problems and find technological solutions for them. They also analyze requirements, improve processes, and help align goals.
What are Business Analysis Techniques?
A proper approach is essential for analyzing business needs, goals, and objectives. Business analysts employ a variety of tools and techniques, depending on the task. Whether it is environmental analysis, strategy evaluation, problem definition, requirements elicitation, or business modeling.
1. Environmental Analysis:
- Boston Box
- PESTLE Analysis
- Porter’s Five Forces Framework
- Resource Audit
- MOST Analysis
2. Strategy Analysis:
- SWOT Analysis
- Ansoff’s Matrix
- Balanced Scorecard
- Critical Success Factors (CSFs)
- Key Performance Indicators (KPIs)
- McKinsey 7-S Model
3. Investigation Techniques:
- Document Analysis
- Ethnographic Study
- Protocol Analysis
- Repertory Grid
- Sampling
4. Problem Definition Techniques:
- 5 Whys
- De Bono’s Six Thinking Hats
- Fishbone Diagram
- Mind Map
- Root Cause Analysis
5. Business Modeling Techniques:
- Value Stream Mapping
- CATWOE
- Business Model Canvas
- Capability Modeling
- Value Chain Analysis
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List of Most Popular Business Analysis Techniques
Here is the list of most popular business analysis techniques used worldwide. Any business analyst aiming to advance their career should understand and apply as many of these as possible.
1. SWOT Analysis
Many teams use SWOT analysis for strategy work because it is easy to apply at any level and any project stage, and most professionals already know it. SWOT stands for:
- Strengths refer to the advantages a company has across various aspects. For example, it’s reputation or employee loyalty.
- Weaknesses refer to the disadvantages of a company such as rivalry among different departments.
- Opportunities are external factors that give the company a competitive advantage.
- Threats are external factors that could create obstacles for a company’s growth and success.
Strengths and weaknesses are internal factors, while opportunities and threats are external factors.
2. MOST Analysis
MOST analysis is a comprehensive business analysis framework. It is widely regarded as an effective framework for assessing an organization’s purpose and capabilities. This method involves performing a thorough internal examination of an organization’s objectives and how to achieve them. The abbreviation means:
- Mission: What is the mission of an organization?
An organization’s mission defines its long-term purpose. The mission statement may involve input from different departments to reflect the organization’s goals. The mission establishes a general rationale for being in business and the objectives that are to be met. The more specific a company’s goal is, the more likely it is to succeed.
- Objectives: What are the main objectives that will assist in completing the company’s mission?
Objectives are described as particular goals that each department must meet to fulfill the company’s mission. For decision-making, objectives should be clear, specific, and actionable. They must also be quantifiable and achievable.
- Strategy: What are the many alternatives for accomplishing the goals?
The activities that should be performed to achieve organizational objectives are known as strategy. Many types of activities can be undertaken to fulfill at least one of the company’s goals or objectives. A strategy outlines how the organization will achieve its objectives.
- Tactics: What will the organization’s tactics be for carrying out the strategy?
Tactics define the specific actions to implement the strategy in a clear, understandable way.
3. Business Process Modeling (BPM)
Business Process Modeling (BPM) is frequently used in the analysis phase of a project. This is to understand current processes and identify gaps compared to the desired future processes. There are four steps to this technique:
- Plan future processes
- Analyze business model
- Define and design the methodology
- Evaluate technical requirements needed to support the new process
Many sectors, especially IT, use BPM method because it clearly illustrates process steps and roles.
4. PESTLE Analysis
This analysis is a key technique for evaluating the external environment affecting a business. PESTLE stands for:
- Politics: It refers to governmental policies, regulations, and political stability affecting the business.
- Economy: It deals with economic factors such as inflation rates, labor costs, interest rates, and energy costs.
- Social: It focuses on the societal attributes that influence a company’s situation.
- Technology: It is about technology developments that impact the business.
- Legal: It covers the regulations, governmental laws, standards, and other related aspects.
- Environment: It relates to ecological and environmental factors that may affect operations.
5. CATWOE
CATWOE analysis is a business modeling technique used to understand a problem or system from the perspective of all stakeholders.
- Customer: Represents the recipients of the system’s outputs and how stakeholders perceive their needs.
- Actor: The people or groups who carry out activities within the system.
- Transformation Process: The main activity that converts inputs into outputs within the system.
- Worldview: The perspective or assumptions of stakeholders that give meaning to the system and its purpose.
- Owners: Those with authority to make decisions and control changes in the system.
- Environmental Constraints: External factors that limit or influence the system’s operation.
6. MoSCoW (Must or Should, Could or Would)
MoSCoW analysis is a project planning technique for managing requirements. The abbreviation of MoSCoW stands for:
- Must have: Nonnegotiable product requirements that the team must have.
- Should have: Important requirements that are not critical but add a lot of value.
- Could have: Desirable requirements that can be included if time and resources allow, but have minimal impact if skipped.
- Will not have: Requirements that will not be delivered in this timeframe.
7. Use Case Modeling
Use Case Modeling is used to document a product’s requirements. It visualizes how a system’s business operations should function through user interactions. It is commonly used in software development to translate business requirements into functional specifications during the design phase. UML diagrams are often created using different modeling tools.
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8. Requirements Analysis
Requirements analysis is a stage in the project lifecycle focused on identifying and understanding stakeholders’ needs and desired outcomes. Business analysts often conduct interviews and workshops to clarify and understand requirements.
Requirements analysis is a crucial business analysis technique used in nearly every project. A project cannot conduct proper design and development without thorough requirements analysis. It is often regarded as one of the most crucial stages of a project. It involves direct engagement with stakeholders, which is valuable for later project stages.
9. Six Thinking Hats
Six Thinking Hats is a structured thinking method that improves decision-making and problem-solving. You examine issues from six distinct perspectives to do this. These are the six hats:
- White Hat (Neutrality): Focuses on facts, data, and objective information.
- Green Hat (Creativity): Explores new ideas, alternatives, and unique solutions.
- Yellow Hat (Positivity): Looks at positivity, benefits, and the bright side.
- Black Hat (Caution): Spots potential problems, risks, and reasons why an idea might not work.
- Blue Hat (Organization): Manages the thinking process itself, guides the discussion, and maintains order.
- Red Hat (Emotion): Allows for sharing thoughts and emotions openly without offering reasons.
10. Root Cause Analysis
Root cause analysis (RCA) is a systematic process used to identify the underlying reasons for a problem or event. It focuses on the cause instead of just the symptoms. The goal is to implement long-term solutions to stop it from repeating and support continuous improvement in processes and systems.
Root causes are typically grouped into three main types. Many problems involve a mix of these causes.
- Physical Causes: Tangible, material items or equipment that failed. For example, a broken machine part.
- Human Causes: Instances where people made an error or failed to perform a necessary task. For example, inadequate training can lead to an error.
- Organizational Causes: Faulty systems, processes, or policies that enable human or physical errors to occur. For example, a lack of a clear maintenance schedule.
Conclusion
Business analysts techniques are essential tools for understanding business needs and making informed decisions. By learning these techniques, you can develop and implement plans important for spotting a company’s needs and delivering the best results.
For those looking to develop these skills further, the business analyst course offers training programs for professionals at all levels.
Frequently Asked Questions
Q1. What is the main goal of using business analysis techniques?
The primary goal is to spot business needs and issues, evaluate possible solutions, and create plans that raise efficiency, promote growth, and benefit stakeholders.
Q2. How do I choose the right business analysis technique for a specific project?
The choice of technique depends on the project’s complexity, data and time available, and issue you are addressing. Generally, for high-level strategy, you might use PESTLE or SWOT, while for a particular system requirement, you might use Use Case Modeling.
Q3. Can small businesses use business analysis techniques?
Yes, small businesses can benefit significantly from business analysis techniques, as every decision impacts their survival and growth.
Q4. What is the difference between business analysis and business analytics?
Business analysis is a broader discipline focused on understanding business needs, processes, and structures to recommend solutions that enable the organization to achieve its objectives. Business analytics is a data-oriented field that uses statistical models, data mining, and machine learning to analyze historical data, identify patterns, forecast trends, and inform data-driven decisions.
Q5. Are there specific tools used for business analysis?
While many techniques can be used with simple tools like whiteboards or spreadsheets, business analysts often use specialized software for process modeling like BPMN tools, data visualization like Tableau and Power BI, and requirements management.