Many people view strategy as a specialist subject practiced by senior managers, strategy specialists and consultants. Business analysis on the other hand is often involved with understanding operational needs to define a requirement that can either result in a process improvement or maybe lead to the creation or selection of a new IT system.
Sometimes this distinction is true, but there are significant overlaps between strategy and business analysis. Understanding these links can help with strategy delivery and ensure that any process or systems changes are the right thing to do. To use a current management buzzword, effective business analysis can help to ensure there is strategic alignment.
In this brief article, I hope to demonstrate that understanding business strategy can improve a Business Analyst’s ability to perform their role and, learning a range of business analysis tools and techniques is an increasingly important skillset for anyone who is, or aspires to be, an effective manager.
For example, to illustrate why understanding strategy is important for an analyst, the “Guide to the Business Analysis Body of Knowledge®” (BABOK®), published by the International Institute of Business Analysis™, has a prescribed step in the process of assessing changes to requirements for the analysts to consider if a proposed change aligns with the overall business strategy. Clearly, they cannot do this without an understanding of what the organisation’s strategy is and, better still, why and how it came about.
Equally, as organisations increasingly move from managing tangible assets to trying to maximise the value of intangibles, managers need to be able to analyse situations, understand the new information or external change, and adapt accordingly. This cannot be done with the traditional management tools of decomposing targets and managing performance against rigid business plans and budgets. It requires a different set of methods and tools.
In the GLOMACS Strategy and Business Analysis course, for example, managers are challenged to think about an issue or opportunity in their organisation (or a well-known company they are familiar with) and try to answer the following questions:
- What is the need?
- What solutions could meet the need?
- How would you demonstrate or measure the value provided by the solution?
- Any other relevant information about change, stakeholders or context?
They then have to think about what capabilities might be needed to implement the solution. If existing capabilities are inadequate, it might be necessary to initiate a project to develop new ones. The scope of the resulting change project may include one or more of the following:
- Management processes
- Operational processes
- Business functions
- Lines of business
- Organisation structure
- Peoples’ competencies and capabilities
- Learning and development
- Computer software tools and or personal devices
- Physical locations
- Data, information and knowledge
- Application systems
- Technology infrastructure
These topics cover a wide range of areas. Not all analysts, or managers either, will be confident they understand the implications of each of them.
If a change covers many areas and there are interactions between them, this introduces the risk of unintended consequences, because it is difficult to predict the actual outcome of the various changes influencing each other due to the complexity of the problem. Therefore, well intentioned changes may improve the specific thing they are aimed to fix, but then create a range of new problems that require their own changes. Business analysis recognises the value that Systems Thinking can offer here. Systems thinking can offer insights into complexity that benefits the analyst and the manager.
The BABOK® incorporates a number of tools that will be familiar to those who have studied and practiced strategic management. It also draws from business process management, project management, information management, risk management and many other fields. For example, the examples of analysis tools include:
- Strategy Map
- Balanced Scorecard
- Business Model Canvas
- Project Portfolio Analysis
- Value Map
- Business Process Architecture, etc.
It can also draw on agile approaches to help align potential solutions with strategic goals.
As you can see, there are many management tools that business analysts can use, including strategic management ones. Equally, as managers learn to adapt to the challenges of knowledge work, automation and the decline in production of physical goods and products in many markets, the ability to understand needs and work out solutions using the tools of a business analyst can be vitally important to managers, both strategic and operational.