5 Tried-and-True Business Analysis Techniques the Pros Swear By
Business is your business. Maybe you even watch business documentaries on your weekends. You love your job, and you want to continue advancing your career. As your responsibilities increase, you may be tasked with more strategic planning work. One of the best ways to approach these sometimes far-ranging and complex plans is through the use of tried-and-true business analysis techniques.
Business leaders commonly use business analysis techniques to help weigh their options and map out the potential factors that would influence their decision-making. Many of these techniques can be applied to a variety of scenarios, though some are best suited for particular purposes like product launches or high-level strategic planning.
Familiarizing yourself with these techniques will help you see the big picture like the higher-ups do, develop strategies and understand best practices more easily. We curated a list just for you that breaks down the most well-known business analysis techniques. So keep reading and get ready to start leading.
5 Common business analysis techniques for your management toolkit
Familiarize yourself with some of the most commonly used business analysis techniques. Next time you have to make an important decision, you’ll have some promising tactics to potentially employ.
1. SWOT Analysis
SWOT is an acronym for strengths, weaknesses, opportunities and threats. This form of analysis provides an effective overview of a company that will enable it to capitalize on opportunities, acknowledge weaknesses and act on their strengths.
Let’s take a look at the questions businesses or teams can ask themselves as they work through the SWOT analysis process.
- Strengths: What do we do well? What internal resources do we have? What advantages do we hold over our competition?
- Weaknesses: What does our business, team or organization lack? Where do we compare unfavorably to our competition?
- Opportunities: Any external opportunities or changes that our organization can potentially benefit from?
- Threats: Is our competition about to make a big change that could harm our viability? Are supplier costs increasing? Has there been a change in consumer behavior or the economy?
This approach can be used in variety of decision-making scenarios. Established organizations could use the SWOT technique to assess a changing culture or environment and find ways to respond proactively. New businesses can benefit from using SWOT analysis in their planning process as it forces decision-makers to look both inwardly and outwardly to determine their best course of action. Ideally this analysis is done with the input of multiple stakeholders to avoid blind spots in the decision-making process.
Though the SWOT analysis technique can help you generate many great ideas, it’s up to you to prioritize them and turn them into strategies. Consider how your opportunity and strength columns overlap. How can you maximize those opportunities that coincide with your strengths to create the best possibility for success? Similarly, you can evaluate the threats in light of your strengths to minimize threats.
2. Business process modeling (BPM)
Business process modeling, sometimes called business process mapping, is a visual representation of a company’s processes. The goal is to find room for greater efficiency and general improvement by creating a visualization of existing processes. These visualizations can be used to show the present state of work as is or show how it would function with improvements or changes.
This form of analysis is a great way to give a big-picture view of how a task is completed and help identify any inefficiencies or redundant steps along the way. These maps can also help with employee onboarding by spelling out who is responsible for what and providing a roadmap for each stakeholder’s next steps.
3. MOST analysis
The MOST analysis technique is a method for goal-setting at every level. This approach ensures a focus on your organization’s most vital goals is maintained. Each element of this acronym builds on and connects to the others. Let’s dive into what each of them means:
- Mission: The organization’s enduring purpose. All other sections of MOST and decisions should be weighed against this mission.
- Objectives: What the company needs to do to accomplish their mission. These objectives should be “SMART” (Specific, Measurable, Achievable, Realistic and Timely).
- Strategy: Includes specific steps to achieving your objectives that shape what is done and how.
- Tactics: These are the small and efficient methods used to carry out strategies that can be accomplished even without understanding the big picture.
To better see how all the components of MOST influence one another, let’s dig into an example.
- Mission: A pet grooming business wants to become the best and busiest pet grooming company in their city.
- Objective: Grow sales by five percent next month.
- Strategy: Invest in additional advertising efforts like local radio.
- Tactics: Write a script, contract with a radio station and hire a voiceover actor.
The MOST analysis technique is a great way to breakdown a big goal into actionable steps and make sure that it aligns with your company’s top priorities.
4. PESTEL analysis
PESTEL analysis is used to monitor the macro-environmental factors that may impact the company either positively or negatively. This is especially helpful for determining timing and strategies for launching a new product, project or service. The PESTEL analysis can also be used to help create or evaluate the various sections of a SWOT analysis, especially threats and opportunities. Each letter of PESTEL represents a different environmental factor to consider.
- Political: What is the local/state/federal/international political situation and how might it affect our industry?
- Economic: What are the prevalent economic factors? Inflation rate? Consumer purchasing power? Interest rates? Foreign exchange rates? Growth patterns?
- Social: What are the current and projected cultural trends? How are demographics changing? How are buying patterns changing?
- Technological: What innovations are likely to affect your market or industry, including automation, communication or production?
- Environmental: How do environmental factors figure in to our plans? Will they be sustainable? Will climate trends or changes affect how we operate?
- Legal: What do we need to do to be compliant with the law? Is there any pending legislation that may change how we operate? Is it likely to pass?
Because these factors can change regularly, an organization’s PESTEL analysis may need to be tweaked often in order to remain relevant. And since it can be difficult to decide what factor to deal with first, the PESTEL analysis is best combined with a SWOT analysis for optimized strategic planning.
CATWOE is a strategic analysis and problem solving framework that can be applied to a variety of scenarios. This approach, 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 as a whole. Take a look at what is under consideration using this approach:1
- Clients: The users of the process or system. What problems do they have now? How will they react to your proposed solution?
- Actors: The individuals implementing the changes to a system of process. Who will be rolling out this change? What impact does this project or change have on them?
- Transformation: The changes that come from bringing this solution or new process about.
- Worldview: How does this issue or proposed change fit into the big picture of the organization’s overall goals?
- Owner: Who are the decision-makers who have the authority to make changes, stop the project and make key decisions? What problem do they have now? And how will they react to what’s being proposed?
- Environmental constraints: Includes ethical limits, laws, financial constraints and regulations. What are the broader constraints that affect your ideas or plans?
CATWOE is more effective when created at the very beginning of a project or brainstorming process and can help give direction to a project and help the stakeholders and actors avoid future headaches.
Are you ready to lead in business?
These business analysis techniques and frameworks are a great starting point for most any decision-making process and can help you effectively run projects. But if you have your sights set on making decisions at a higher level, you may need to further your education with a Business Management degree. Not sure if this is the right route for you? We’ll help you find some clarity in our article, “9 Signs You Should Be a Business Management Major.”
1Checkland, Peter and Jim Scholes. “Soft Systems Methodology in Action.” Wiley, 1999