Business analysis methods include SWOT analysis, PESTLE analysis, Heptalysis, 5 Whys, and Six Thinking Hats. These methods help identify business needs and problems, and provide solutions to achieve objectives. A business analyst must be familiar with all methods to determine the best fit for a company’s organizational structure.
There are several methods of business analysis, including strengths, weaknesses, opportunities, and threats (SWOT) analysis; Political, Economic, Social, Technological, Legal and Environmental Analysis (PESTLE); Heptalysis; the 5 Whys method; and the Six Thinking Hats method. Business analytics is a practice that all businesses must implement for their success. This analysis identifies the needs and problems of the business and can also indicate the best solutions to achieve the company’s objectives.
SWOT analysis is the most popular of all business analysis methods. It is essential for a company to know its strengths, such as the best performing departments or activities, as well as its weaknesses: the areas where the company performs below par. Opportunities and Threats both rank the competitors in the market in order to determine where the competition is failing, thus creating an opportunity for the business, as well as where the competitor is being successful which 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 company operates. This form of analysis mainly helps a company to position itself in the region. It also offers business solutions to meet market needs in terms of product pricing, technology infrastructure upgrade, and positive feedback to society.
Perhaps the most in-depth of the business analysis methods is Heptalysis due to its seven major research areas. 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 for policy development as it cuts across all major functions of the business.
The 5 Whys method is ideal for uncovering underlying business problems and encouraging organizational change. It is often seen as a simple technique because it begins by stating the problem in the business, then asking “why” and a further “why” is then asked of the initially stated reason. As easy as it sounds, it requires participants to dig deeper and look objectively at the root causes of problems in the organization. In most cases, the root cause discovered with the 5 Whys method is often surprising and very accurate.
Of all business analysis methods, Six Thinking Hats are 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 companies to determine solutions for manufacturing or marketing.
A business analyst (BA) must be familiar with all of these business analysis methods because not all companies work the same way. The organizational model or structure plays a key role in the analysis method used, as some companies use a strict hierarchy while others have a higher level structure. The best method should reveal the strengths and weaknesses of the business and present practical solutions to meet its needs.
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