Top 15 Business Analysis Techniques for Data-Driven Decisions

Business analysis has advanced greatly over the past few years, motivated by innovative methodologies that improve problem-solving and decision-making. These methodologies aim to provide the best business solutions through challenge identification, process simplification, and improved efficiency. Nonetheless, not every business analysis technique can be applied to all circumstances; they must mostly be adjusted to individual project stages, whether at the start, implementation, or completion.

Companies possess vast information in today’s economy, facilitating decision-making and competitiveness. Thus, good analysis techniques for business analysts have become crucial today. It depends on collecting intelligence, knowing what users need, and mapping business requirements to strategic solutions. Organisations can use the correct business analysis methodology to refine operations, improve customer experiences, and achieve long-term growth.

Let’s now examine the most preferred business analysis techniques that enable organisations to drive their success by navigating complexities.

Definition of Business Analysis

Business analysis is an umbrella term that defines the application of knowledge, techniques, and activities used to discover business needs, suggest alterations and design solutions that lead to value for the stakeholders. While many business analysis solutions today include software and data-based elements from the digital world, it is important to know what are business analysis tools and techniques.

Therefore, business analysts drive organisational change by evaluating and analysing vulnerabilities and needs and developing and applying the optimal solutions afterwards. Most of the information employed to reach such conclusions is drawn from data obtained through various means and usually under the category “big data.” So, let’s now decipher what are the most common used business analysis techniques.

So, what are business analysis techniques? These methods assist organisations in making informed decisions based on data, enhance efficiency and drive competitiveness. These methods allow companies to find insights and refine strategies, from predictive modelling and data mining to SWOT analysis and stakeholder mapping.

Here is a list of the best business analysis techniques:

1.  SWOT Analysis

One of the industry’s most widely used methods, SWOT, lists strengths and weaknesses within a corporate framework, offering them opportunities and threats. The information assists analysts in making informed decisions on resource allocation and recommendations for organisational development. The four components of SWOT are:

• Strengths: The attributes of the business or project that give it an edge over others.
• Weaknesses: Those business attributes disadvantage the project or organisation compared to others in competition or even for other projects.
• Opportunities: Factors in the environment that the business or project can exploit.
• Threats: Factors within the environment that may impede the business or project.

SWOT is an easy, handy method that will work just as well in a rapid or detailed examination of any size firm. It also evaluates other topics, like groups, functions, or individuals.

2.  PESTLE Analysis

Business analysts employ the PESTLE model (also called PEST) to determine environmental factors that may affect their business and how to best deal with them when making business decisions. Those factors are:

• Political: Subsidies and financial support, government policies, and initiatives.
• Economic: Interest rates, labour and energy prices, and inflation.
• Social: Population, life, media, culture, and education.
• Technological: Emerging information and communication systems technologies.
• Legal: National and local government regulations and employment laws.
• Environmental: Waste, recycling, pollution, and weather.

Analysts can better understand how these factors will impact the organisation’s narrative by studying and analysing them. This, in turn, allows analysts to create strategies more easily to deal with them.

3.  Business Process Modeling (BPM)

BPM can commonly be utilised in analysing a project; the objective is to grasp and dissect gaps between a company’s present process and whatever new process it aims to target. There are four steps to BPM:

• Strategic planning
• Analysis of the business model
• Identifying and creating the process
• Technical examination for complex business solutions

Many industries, particularly the IT sector, prefer this method since it’s an easy, direct means of illustrating the steps of the execution procedure and how it will function under various roles.

4.  Root Cause Analysis

Root cause analysis is a systematic process of determining why a given problem happened. The concept is to determine the problem’s origins so that the correct measures can be taken to prevent future occurrences. The tools utilised by RCA usually include Five Whys, Fishbone Diagram (Ishikawa), and Pareto Analysis. This enables companies to access the root cause of issues and make lasting improvements to their approach rather than symptomatic quick fixes.

5.  Cost-Benefit Analysis

Cost-benefit analysis is also referred to as cost-effective analysis, which is applied to assess the return on investment of a particular decision, project or policy. In other words, monetary measures allow companies to recognise the opportunities and risks of their actions in financial terms. In CBA, one enumerates all the costs and benefits, places them in monetary value and calculates the net benefit. This drives the company toward value protection and averting unnecessary costs and expenditures.

Also Read: The Scope and Salary of a Business Analyst in India

6.  Brainstorming

There is no substitute for brainstorming to produce new ideas, find a problem’s underlying causes, and arrive at solutions to a difficult business problem. Brainstorming is a group working technique that is commonly employed in other techniques like PESTLE and SWOT

7.  CATWOE

CATWOE determines the key players and stakeholders, gathering the views of various stakeholders on a single platform. Business analysts employ this method to analyse thoroughly how any suggested action will impact the various parties. The acronym represents:

• Customers: Who benefits from the business?
• Actors: Who are the participants in the process?
• Transformation Process: What is the transformation that lies at the heart of the system?
• World View: What is the overall picture, and how do its effects apply?
• Owner: Who owns the affected system, and what is their relationship?
• Environment: What are the limitations, and how do they affect the solution?

8.   MoSCoW (Must or Should, Could or Would)

MoSCoW ranks requirements by providing a framework where you analyse every request against the others. It compels you to question whether or not something is needed. Is it a must or a should? Is the requirement something that might make the product more valuable, or might it be a good thing down the line?

9.   MOST (Mission, Objectives, Strategies, and Tactics) Analysis

MOST is a solid business analysis system—ranked one of the best methods of gaining insight into an organisation’s capacity and intention. The process involves performing an extensive, comprehensive internal analysis of the organisation’s objectives and how to do them. The acronym breaks down as follows:

• Mission: What is the purpose of the organisation?
• Objectives: What are the most important goals that aid in accomplishing the mission?
• Strategies: What are the available options for realising the goals?
• Tactics: How will the organisation execute the strategies?

Also Read: Business Analyst Roles and Responsibilities

10.  Six Thinking Hats

This business analysis process directs a group’s thinking, causing them to think about alternative ideas and concepts. The ‘six hats’ are:

• White: Concentrates on your facts and reason.
• Red: Based on intuition, feelings, and instincts.
• Black: Think about negative outcomes and what will likely go wrong.
• Yellow: Keep a positive outlook; focus on the good.
• Green: Utilises creativity.
• Blue: Considers the big picture and control of processes.

The six thinking hats method is commonly employed with brainstorming to guide the team’s mental processes and lead them to think about diverse perspectives.

11.  Non-Functional Requirement Analysis

Analysts use this method on projects where a technology solution is replaced, modified, or developed from the ground up. The analysis specifies and encapsulates the attributes required for a new or a transformed system and most commonly handles requirements like data storage or performance. Non-functional requirement analysis typically encompasses:

• Logging
• Performance
• Reliability
• Security

Non-Functional Requirement Analysis is usually applied in the Analysis phase of a project and executed in the Design phase.

12.  Design Thinking

Design thinking is a corporate analysis method mostly applied to problem-solving and innovation. It’s human-centred and focuses on empathy, collaboration, and creative thinking to create solutions to address user needs and generate positive user experiences. Design Thinking is usually applied to solve complicated, unclear, or user-based issues by emphasising the users’ viewpoints, motives, and agony points.

13.  Mind Mapping

The mind map is a useful tool for brainstorming. Business analysts often use them during idea identification, root cause analysis, and stakeholder requirement identification. Their simple graphic nature highlights the interconnection of ideas and topics.

They can also assist business analysts in identifying problems and possible solutions. Any business analyst will have to use mind maps.

Also Read: What is Business Analytics?

14.  Value Stream Mapping

Value Stream Mapping is a lean-management tool utilised to map the production of a product or delivery of a service from the point of receiving the finished consumer. Once the entire process is properly visualised, most of the wastes are recognised, unnecessary operations are eliminated, value is managed and improvements are made. VSM involves mapping the existing processes and modelling the future state of the series of activities that a product or a service goes through before reaching the customer.

15.  Stakeholder Analysis

Stakeholder Analysis is an identification process of the people or organisations likely to be affected by the business decision or a particular project, assessing their power and interest, and planning ways and means of solving the stakeholder’s problem. Organisations become sensitive to stakeholders’ needs and problems through this method, and they can be employees, customers, suppliers, stockholders, and the general public. It also suggests that effective management of stakeholders allows for a smoother flow of projects and improved alignment to organisational goals.

Conclusion

Business analysis methods are critical in assisting organisations in recognising challenges, simplifying operations, and informing strategic decision-making. These methods provide varied approaches for different business situations, from process modelling and SWOT analysis to cost-benefit and stakeholder analysis.

Business analysis technique experts are highly sought after as businesses transform in a data-driven environment. Whether you want to deepen your knowledge of business analysis techniques or learn advanced methods, a systematic learning process is essential. So, if you want to accelerate your career, Hero Vired’s Accelerator programme in Business Analytics and Data Science is your best option. It is structured to provide industry-focused skills and live experience. Acquire knowledge from professionals and hands-on experience to become a competent business analyst. Join today!