What is Business Analysis?
Business Analysis is a method of evaluating different aspects of a business with the purpose of identifying ways to improve its operation. There are many different methods that are utilized, depending on both the nature of the business and the area of improvement the analyst is seeking to improve. Typically each method of business analysis will analyze both internal and external factors, how those factors interact, and identify some desired result. Generally, this desired result is an improvement in operational efficiency.
While the specific method of business analysis employed will be based upon the goals of the company, the general idea is to improve efficiency, which may mean one of many different things. Analysis of internal factors may focus on improving employee efficiency, thereby producing more or spending less in day-to-day production. Whereas considering external factors may be focused on seizing new opportunities due to more or less governmental regulation.
One such example of a business analysis technique is MOST, which stands for mission, objectives, strategies, and tactics. MOST analysis is typically employed in a new business, or a new aspect of an existing business. The first step is to identify a final goal of the new business, which is the “mission” component. From there, the analyst may set smaller, attainable objectives that if achieved will set the business on the path to achieving its big picture mission. The “strategies” and “tactics” components of the MOST analysis outline the methods by which the company may reach those objectives.
Another common example of business analysis is SWOT analysis. Typically already existing and operating businesses employ SWOT, which stands for strengths, weaknesses, opportunities, and threats. In conducting such analysis, the company may first identify its strengths and weaknesses, which gives it a good idea as to where the greatest marginal improvements may be made within its operations. The “opportunities” and “threats” components identify external factors that could have an effect on the business. By addressing these factors, the business may evolve as the particular environment in which it operates changes, making such changes benefit the business rather than cause it harm.
After the business analysis is completed, it is important that the company implement and enforce the new methods of improving efficiency. However, the difficulty of implementing new business tactics is something that should be considered throughout the company’s analysis. Micromanagement of employees to ensure its implementation can be difficult and at times more costly than the projected improvements in efficiency.
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