In today's fast-changing economy, a strong business analysis framework is essential. Business analysts must understand value propositions, innovate continuously, and meet customer demands. This framework helps them quickly identify business needs and provide effective solutions. This article explains the key elements and importance of a solid business analysis framework.
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What is Business Analysis Framework?
As the name suggests a business analysis framework is a conceptual and real blueprint that involves and describes all the vital requirements of running a business. The framework is built upon knowledge, various techniques and established concepts and critical analysis as well. Business analysis frameworks and methodologies is a step-wise approach that is implemented to match the business practices with the organizational goals.
“As a business model framework is a theory-dependent description of the firm, its internal workings, and its relationships, the definition of a framework often takes the form of a normative statement about what should be included in it” (Sanchez and Ricart, 2010).
Graphically business analyst framework can be presented as follows:
Making a business model analysis framework could be difficult at the initial stage, especially for a beginner business analyst. It will be better to have sequencing and the visualization of the steps required to create a framework. The beginner business analysts could go for an ECBA Course, which is the level one certification in the business analysis (BA) certification framework from the International Institute of Business Analysis (IIBA) or earn a Business Analyst Certification to get skilled with the nuances of business analysis.
Example of Business Analysis Framework
An example of sequencing a business analysis service framework could be like the one mentioned below:
Business Model Analysis Framework
Analytical frameworks in business are useful tools often used by many business analysts and strategy consultants. There are hundreds of useful and innovative frameworks available in business, management and strategy. Some of the helpful and most common business analysis frameworks that are used in the present time business world are mentioned below:
- Michael Porter’s Five Forces Model
- Hambrick and Fredrickson’s Strategy Diamond
- Value Disciplines (Treacy and Wiersema)
- Ansoff Matrix
- BCG(Boston Consulting Group) Growth-Share Matrix
1. Michael Porter’s Five Forces Model
Perhaps the most well-known and used business analyst capability framework is especially used for analyzing industries. This business impact analysis framework considers the competitiveness of an industry in the market based on 5 different factors or forces like:
- Rivalry among existing competitors.
- The threat from the new entrants or potential competitors.
- The threat of substitute products or alternatives.
- The bargaining power of the suppliers.
- The bargaining power of the buyers.
If these forces are strong, competition can be considered high and a business needs to do an in-depth study about its business viability and profitability before entering that specific industry. As per this framework business sectors that have little competition allow for greater margins and hence have more potential and attractions to enter into.
sixsigmastudyguide2. Hambrick and Fredrickson’s Strategy Diamond
This framework though sadly has not received the applause and attention it deserves, is great at explaining the true meaning of strategy and superbly distinguishes the different elements of a good strategy. This framework model considers 5 essential elements that together form a unified whole. These are Arenas, Vehicles, Differentiators, Staging and Economic Logic. A business must scrutinize each element to make a choice of what to do, and most importantly what NOT to do. Besides, choices made in one element must reinforce the choices made in other elements and only then will a company derive a sound and sustainable strategy.
expertprogrammanagement3. Value Disciplines (Treacy and Wiersema)
This framework business analysis model proposes three value disciplines to choose from to become a market leader:
- Product Leadership (the best and the most innovative product offering)
- Operational Excellence (the cheapest products made via a cost-efficient production process).
- Customer Intimacy (outstanding customer service and customer relationship management).
4. Ansoff Matrix
This business analysis process framework has four growth strategies, which are:
- Market Intervention (bringing more of the current products to existing markets)
- Market Development (bringing the existing products to new markets)
- Product Development (bringing new products to existing markets)
- Diversification (bringing new products in new markets).
Each time a move is made to a new quadrant (horizontally or vertically), risk increases.
5. BCG(Boston Consulting Group) Growth-Share Matrix
The model aims to help a business understand its growth opportunities by reviewing its portfolio of products or service units to decide where to invest and divest. It is a superb tool for portfolio analysis and framing corporate strategy. The BCG matrix has four quadrants of business units (products or service units) that are based on two factors: market growth and relative market share. The quadrants are: Dogs, Question Marks, Cash Cows, and Stars.
A business with a relatively small market share in a high-growth market can start off from the Question Marks quadrant. Depending on how well the business unit and the industry perform, it may end up as a Star or Dog. And when the industry growth starts flattening, the unit becomes a Cash Cow and can be ‘milked’ to invest in more promising businesses.
A CCBA Training helps business analyst to get fluent in using all the tools and technologies of the business analyst toolkit. Whereas for an advanced business analysis skills a comprehensive immersive learning program of CBAP Course would be appropriate.
Importance of Business Analysis Framework
With the increasing complexity of business analysis, ever-growing customer expectations/ demands and the exponential advancement of technologies, the number of business analytics process requirements are also increasing.
A business analysis framework separates grains from the chaff, that is, it separates various ideas and beliefs of business processes and provides a reference model or structure that gives better clarity and understanding of the processes and ensures that business activity or the work is done efficiently according to the framework with constant monitoring.
Elements of the Business Analysis Framework
The elements of the business case analysis framework are:
1. The set of written documents
Documentation is needed in business analysis activities for supporting the development and delivery of results. The documentation includes:
- Stakeholder Involvement Matrix
- Gap analysis
- Business Requirements Specifications
- Requirements Management Plan
- Use Case Specifications
- Communication Plan
2. Visual Modeling of Requirements
This includes the following:
- Use Case Diagram
- Activity Diagram
- Class Diagram
- Work-flow Diagram
- Process Flow Diagram
- Prototypes
- Mind Maps
- Entity Relationship Diagrams
- User Interface Diagram
3. Project development plan
The techniques used for the project development plan are:
- Brainstorming
- Interviews
- Observation
- Shadowing
- Workshops
- Prototypes
- Visual modeling
7 Steps in Business Analysis Framework
The business analytics framework includes some five steps (with many subtasks associated with each). Every single step requires identifying, analyzing, and recording of all requirements.
Step 1. Situation examination
This step focuses on current problems harming a business and ensures that the issue in question is properly analyzed following a process.
Step 2. Outlook understanding
It involves understanding the views of business owners and other stakeholders by business analysts.
Step 3. Needs Analysis
Includes analysis of the current business situations and discussion of the improvements that can be implemented to the present circumstances. A gap analysis is made.
Step 4. Evaluation of options
Assesses all possible options involved in a process, analyzes improvement opportunities by comparing the current systems with the required ones.
Step 5. Defining the requirements
Meeting and discussing with the key stakeholders and business analysts document all the needed requirements.
Step 6. Implement the solution
Implementing and embracing the changes and to train end-users to ensure they understand all procedural changes.
Step 7. Assess value created by solution
Evaluate and ensure that business objectives are fulfilled.
Techniques Used in Business Analysis Framework
This section will explain the most widely used tools and techniques used by business analysts.
1. SWOT Analysis
SWOT is an acronym that stands for Strength, Weakness, Opportunities and Threats which are the four key parameters used in business analysis and helps a business analyst to understand internal and external business processes.
Typically, the internal analysis embodies the analysis of the Strengths and Weaknesses of the organization/business process, while the external analysis includes a study of Threats and Opportunities.
SWOT analysis helps a business to understand its core strengths plus provides valuable insights to improve and rectify any mistakes within the business process.
The key understandings are:
- Strengths: includes the positive aspects of the organization/business process that are highlighted when compared against the competitors.
- Weakness: includes the negative aspects of the organization/business process that are highlighted when compared against the competitors.
- Opportunities: includes the possible business improvements/ enhancements that can be identified, implementing which will help the business to grow.
- Threats: includes the possible pitfalls/dangers for the organization/business process that get identified.
2. Most Analysis
To analyze a business and provide strategic enhancements to it, this very powerful tool is used by business analysts. It helps a company to take a fresh look at its business and helps to define its purpose and vision.
Using this tool definite targets are given to all the members of a team in the organization across all levels. The four elements of MOST analysis are:
- Mission - The fundamentals of a company are defined. Because a business will be profitable and successful only when it has its mission clear and specifically defined.
- Objective (SMART) - This element is rather a part of the mission. These line items help a company to stay focused and work towards a specific goal with SMART objectives. SMART is the short form for Specific, Measurable, Achievable, Realistic, and Timely. If the objectives are not based on the SMART principle, it is not possible to reach the goal in the long run.
- Strategy - It denotes an action or an execution plan for achieving the set of decided objectives/ goals. Strategies help organizations to quickly review their status and take considerable steps to achieve the desired goals.
- Tactics - Denote the methods of carrying out the set strategies. Tactics must be simple and easy to understand for every individual within the organization to grasp and follow them to achieve the common set goal.
3. PESTLE Analysis
Also known as PEST analysis this tool helps to identify the key drivers of the change within a business environment. PEST is an acronym for Political, Economic, Social, Technological, Legal and Environmental. Business analysts use it to understand the key drivers as also to go through the scenarios where the business is influenced by certain activities/scenarios. The elements of PESTLE are explained below:
- Political - Attempts to identify the internal politics within the environment and also to assess its impact on the overall business.
- Economic - Factors like inflation and its adverse effects are identified here along with assessing its impact on the business.
- Social - Indicates the cultural aspects that are taken into consideration.
- Technological - The technology trends are evaluated, the possibility of further technology adoption and its probable impacts at the organizational level are also analyzed.
- Legal - All the existing regulations are considered alongside the analysis to foresee any possible scenarios (which might have an adverse effect at the organization level) is also carried out.
- Environmental - Considers all the possible environmental factors and their impact on the overall well-being of the organization are analyzed.
PESTLE helps to determine the overall influencing factors that need to be kept under supervision to avoid any adverse impact on an organization’s overall wellbeing.
4. Brainstorming
This is carried out within an organization and a brainstorming session consists of team members who discuss a common agenda and provide valuable inputs/ideas, do root cause analysis solve a complex problem. This is a very popular technique and such sessions bring out valuable insights for the business.
5. Requirement management
Requirements keep changing as per the market and/or business demand. Business analysts, therefore, need to keep track of the requirements and the changes too.
The “Requirement Traceability Matrix” (a document that shows the relationship between requirements and other objects) helps them do this and keeps track of the past, present and future requirement enhancements of a particular use case or module.
6. Communication Strategy
A strong communication channel is always required for a project to be completed successfully and hence a communication plan between the stakeholders and the project working team needs to be defined.
A business analyst regularly engages with the stakeholders to evaluate certain key aspects of the requirements and also discuss the status of the project execution. For example, for the meetings carried out online, after completion, a business analyst should send out Meeting minutes, which are called “MOM’s (minutes of meetings), to keep track of the discussions and record keeping so that these can be accessed at a later point of time by anyone concerned.
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Conclusion
Business analysis frameworks ensure streamlining of business processes and their smooth running. But not all business analysis framework techniques are applicable to all projects as these are project specific and used for particular projects. Before selecting any technique the specific business goals need to be thoroughly analyzed.
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