There are several methods of business analysis, including Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis; Political, Economic, Social, Technological, Legal, and Environmental (PESTLE) analysis; Heptalysis™; the 5 Whys method; and the Six Thinking Hats® method. Business analysis is a practice that all businesses must implement for their own success. Such an analysis identifies the needs and problems of the business, and may also point to the best solutions to accomplish the goals of the company.
SWOT analysis is the most popular of all methods of business analysis. It is essential for a business to know its strengths, such as the best performing departments or activities, as well as its weaknesses — the areas where the business performs below par. Opportunities and threats both classify competitors in the marketplace in order to determine where the competition is failing, thus creating an opportunity for the business, as well as where the competitor is having success that poses a threat to the company conducting this method of strategic planning.
PESTLE analysis is a method of evaluating the external environment in which the business operates. This form of analysis helps a business primarily in positioning itself in the region. It also offers business solutions to meet the market needs in terms of pricing products, upgrading technological infrastructure, and positively giving back to society.
Perhaps the most in-depth of the methods of business analysis is Heptalysis™ due to its seven major areas of research. These areas consist of market opportunities, products or solutions, financial factors, execution plans, human capital, potential returns on investment and margin of safety. With this approach, a business analyst can reveal the most important aspects of starting and sustaining a business, particularly in the early stages of development. This method of analysis is also crucial to policy development as it cuts through all the main functions of the business.
The 5 Whys method is ideal for finding out underlying business problems and encouraging organizational change. It is often viewed as a simple technique because it begins with stating the problem in the business, then asking “why”, and a further “why” is then asked about the reason initially given. Easy as it may seem, it requires participants to dig deeper and look objectively at the root causes of the problems in the organization. In most cases, the root cause discovered with the 5 Whys method is often surprising and very accurate.
Of all the methods of business analysis, the Six Thinking Hats® is considered to be the best for brainstorming sessions that can reveal excellent solutions for strategic planning. In this case, different members of an organization are chosen and given roles, or ways of thinking, which are color coded. These include white for logical or factual thinking, green for creative thinking, black for negative views and yellow for optimistic views. This method works very well for both goods and service oriented businesses to determine solutions for production or marketing.
A business analyst (BA) must be familiar with all of these methods of business analysis because not all companies work in the same manner. The organizational model or structure plays the key role in the analysis method used, since some businesses use a strict hierarchy while others have a more level structure. The best method should reveal the strengths and weaknesses of the business and present practical solutions to meet its needs.