Sometimes, problems in business have obvious solutions—but other times, the solution isn’t so clear. Whether you’re not drumming up as much business as you’d hoped, or taking on a new project, sometimes it’s best to do a business analysis to leave no stone unturned. Taking a second look at your business model and identifying all of the processes involved in a solution means you’ll be more likely to find one that will last.
What is a Business Analysis?
When you’re sick, you might go to the doctor to get a diagnosis and treatment—business analysis is a similar “diagnosis” of the problems in a business. A business analysis is when you take a holistic look at how your entire business is running and identify processes that need to change. It’s often done in large organizations by a business analyst, but you can do a pared-down version of a business analysis yourself if you’re a smaller company.
What are the Types of Business analysis?
There are several different examples of business analysis, depending on what aspect of the business you’re focusing on.
- For example, a PESTLE analysis gives you an overview of the environment your business is in. The acronym stands for Political, Economic, Sociological, Technological, Legal, and Environmental, and has several other variations. It’s a good analysis to use when you’re in an industry that tends to change quickly, as the tech sector.
- Another form of analysis is a MOST analysis, which focuses on the internal environment of the business. This acronym stands for Mission, Objectives, Strategies, and Tactics, and is a good higher-level look at how your business is currently fulfilling its purpose.
- A third common type is de Bono’s Six Thinking Hats, used in brainstorming sessions to encourage different types of thinking. The six types are: logical, creative, positive, negative, emotional, and controlling. This might be a good model to use during the parts of the analysis you do as a team.
These are only a few of the many different frameworks designed for business analysis—before you begin, take some time to do some further research to see which ones might fit your analytical strategy.
What are the Steps in Business Analysis?
Document the current state of your business
This might include organizational charts, financial reports, or using one of the types of analysis above to get a sense of where your business is now. Use that as a context for where you want to go—what are your objectives? What ultimate outcome would you like to see?
Decide on a solution
Looking at your summary of business activities, take stock of where you think your weaknesses might lie—whether it’s efficiency, your profit margin, or some other aspect of your business. Can you improve processes with a tech solution like CRM or accounting software? Do you need to hire more people or make cutbacks? Make a new department? A good strategy to keep in mind at this stage is creating SMART goals; these are goals that are Specific, Measurable, Achievable, Relevant, and Time-bounded.
Once you’ve identified a few solutions that might work, list the stakeholders—the key employees, suppliers, customers, or regulators that would be involved in the new process. This can be useful in analyzing what you need from each stakeholder, and whether those needs align with reality.
Perform a return on investment or cost-benefit analysis, especially if your project involves a significant up-front investment. A return on investment analysis is a strictly financial analysis of how much money your investment will make you in savings or increased productivity. A cost-benefit analysis, on the other hand, includes the “soft” costs, expressed in dollar amounts, that an ROI analysis won’t. If you have accounting software like Billomat, you can make projections based on your existing financial report structure. If you’re considering a few different solutions, a cost-benefit or ROI analysis can help you determine which one makes the most financial sense.
Make a timeline
Once you’ve decided on a solution, make a timeline for putting it in place. This involves figuring out what steps are involved in implementing it, and how long each step will take. You may need to consult with certain stakeholders to determine how much time they can commit to the project. For example, if you’re introducing new software, the department that uses it will need time to migrate the data and learn the new system. You’ll need to consult with the management of that department to estimate how long the data will take to migrate.
Decide on metrics to quantify your goals
Decide on any other metrics you’d like to measure the success of your project against. These are usually things like KPIs (Key Performance Indicators) that track specific ledger accounts or timesheet categories. Decide what your ideal numbers would look like so that your projections are measurable against them.
Monitor your progress
While the new process or solution is being put in place, monitor your progress according to your timeline, cost-benefit analysis, and KPIs. Based on how your solution is performing, you may need to make adjustments to your timeline, modifications to the project, or introduce new initiatives in conjunction with it. If the implementation is more straightforward, compare the results of your plan with your projections. If you were off target, make note of the things you overlooked. It will help you the next time around!
When to Hire a Business Analyst
In some cases, you will be able to do a business analysis yourself—but in others, you might want to hire a business analyst to oversee the solution. If your business model is complex with a lot of moving parts, you can’t decide on a strategy, or you’re having trouble figuring out the numbers, hiring a business analyst can help you make sense of things. Whatever you decide, using a business analysis approach will help you make the best decisions you can for the future of your company.