1. The Business Context Flashcards
1.1 Rationale for Business Analysis 1.2 Sectors in the economy 1.3 Business Environment Analysis 1.4 The legal and regulatory framework for business analysis 1.5 SWOT Analysis 1.6 Business performance measurements 1.7 Business analysis within the lifecycle for business change
1.1 Why is Business Analysis important?
+ It helps an organisation examine business problems and initiatives in a holistic manner
+ It helps the business logically find root causes of problems and identify creative solutions that are aligned with the organisation’s strategic direction and objectives
+ It helps an organisation work out what processes, systems and resources are needed to make different parts of the organisation operate effectively
1.1 What benefits can business analysis offer organisations?
+ Business Improvement
Helps senior managers understand and define the business they are in and the strategic options available to the company
+ Process Improvement
Helps an organisation improve processes to make it more efficient
+ Systems improvement
Helps an organisation develop the specification for IT solutions
1.2 Name some of the main sectors in an economy
+ Public/Government Sector
Government departments, Government agencies, Public corporations, Armed services, Local government, Public/Fire/Ambulance services Regulatory bodies, QUANGOs
+ Private Sector
Sole Traders, Partnerships, Limited Liability Partnerships, Private Limited companies, Public limited companies, Mutual societies, Co-operatives
+ Not-for-Profit
Charities, Clubs and societies, Voluntary organisations, Professional bodies, Churches and religious bodies, Trade Unions
1.2 What are the drivers of the Public/Government, Private and Not-for-Profit sectors sector?
PESTLE factors
1.2 Sources of finance for organisations?
+ Private Sector
Investors who will buy shares in the company, Loans from lending institutions, Grants from government
+ Public Sector
Government budget from tax revenue
+ Not-for-Profit
Donations, Grants from governments/private institutions
1.2 Why is it important for a business analyst to understand the sector a company operates in and the source of its income?
+ Understanding the sector can help with understanding the external forces that impact strategic direction, business activity and change initiatives
+ Understanding the sector can help with understanding the legal boundaries that impact strategic direction, business activity and change initiatives
1.3 What is a technique used to analyse the influences from the external business environment?
PESTLE
1.3 What is a technique used to analyse the capability of the internal business environment?
+ Resource Audit
Financial (determines financial stability, invest in new resources or weather fluctuations in the market, credit rating, access to funds, management of creditors)
Physical (buildings, plant, equipment, land)
Human (employee/management expertise, experience, adaptability, commitment, flexibility)
Know-how (patents, trademarks, effective methods/standards)
Reputation (brand recognition, quality of the brand
1.4 What is the link between the legal framework for business analysis and requirements?
+ Legal frameworks provide high level legal requirements which constrain/promotes the types of low level functional and non-functional requirements that are generated during business analysis.
+ Example of Legal Frameworks
Anti Discrimination Legislation
Data Protection Legislation
Freedom of Information Act
1.5 What is the link between SWOT Analysis and internal business environment analysis?
Internal Business Environment Analysis identifies the internal strengths and weaknesses of an organisation
1.5 What is the link between SWOT Analysis and external business environment analysis?
External Business Environment Analysis identifies the opportunities (Porter’s) and threats (PESTLE)
1.5 Describe the SWOT analysis and how it’s used?
+ A technique used to summarise the results of an external and internal business environment analysis and identify the current strengths, weaknesses, opportunities and threats of an organisation.
+ Strenghts and Weaknesses which are internal to the organisation are identified and represent capabilities (or lack of) an org has built up over time
+ Opportunities and Threats which are external to the org are identified. Opportunities are viewed available to the org to take advantage, whereas threats may cause problems for the org
1.6 What is a critical success factor and give an example?
+ Organisational objectives are broken down into CSFs
+ Areas that an organisation believes will lead to success, if it performs well in them e.g. High customer satisfaction, Streamlined process, Exemplary safety record
+CSFs may be industry wide (keeps the org. in the game, or organisation specific (gives a competitive advantage)
1.6 What is a Key Performance Indicator and give an example?
+ Measures to assess success or to assess if an org. is on track for success (e.g. No. of customer complaints in a year, % of departures classed as on time (within 20% of boarding time, cost of performing a procedure, overall drug bill)
1.6 What are performance targets?
+ The desired level of performance you want to see as measured by specific indicators.
+ Benchmarks that an organisation uses when setting KPIs/ performance levels so it can monitor if it is performing well or not in that particular area
1.6 What is the link between a CSF, KPI’s and performance targets?
+ An organisation sets CSFs that it believes will lead to success if achieved.
+ KPIs are then aligned with each CSF to allow the org to track progress towards achieving each CSF. A target level of performance is attached to each KPI to objectively assess if the org is behind/exceeding each KPI
1.6 Describe the balanced business scorecard and when it’s used?
+ A tool that can be used to help an organisation turn its objectives into a holistic set of measurable objectives in the form of CSFs and KPIs from 4 perspectives:
Customer (CSFs/KPIs that relate to customer loyalty, repeat business, brand awareness, brand perception)
Financial (CSFs/KPIs that relate to sales, profits, turnover, market share, level of expenditure vs govt funding)
Internal Business Process (CSFs/KPIs that relate to business processes, systems, org structure, skills, knowledge, experience, quality of management)
Innovation (CSFs/KPIs that relate to introducing new products and services to market, finding better method to improve cost effectiveness.
+ Used when measuring business performance
1.7 What are the stages within the business change life cycle?
Alignment Definition Design Implementation Realisation
The Business Case: Sits at the middle of the lifecycle as it is the deliverable (i) used to document the assessment of the different options (ii) to make decisions about the change project (iii) review benefits once the change is implemented
1.7 What are the roles within the business change life cycle?
Project Sponsor: owns the business change project, responsible for delivering business benefit, makes resources available
Users: most affected by the project, will use the solution
Domain Experts: has broad experience of a business area, can give insight into how things are done now and suggest other ways forward
Project Manager: directs the change project and coordinates resources
Developer/Tester
1.3 What is a technique used to analyse a company’s current business strategy and how they are setting out to achieve it?
+ MOST Analysis
Mission (states what business the organisation is in and what it is intending to achieve e.g. To be the best coffee roaster in Edinburgh)
Objective (goals against which achievements can be measured [SMART] e.g. To receive 100k orders in the financial year OR To increase revenue by 10% per month)
Strategy (long term means chosen to achieve its objectives e.g. To attract customers from competitors through lower prices)
Tactics (short term and more detailed means of implementing the strategy e.g, Hiring a marketing specialist to write scripts for commercials)
1.6 What are examples of CSFs and KPIs for different aspects of the balanced scorecard?
+ Financial
CSF: Consistently increasing Sales
KPI: % increase in sales of coffee beans per quarter
Target: 5%
+ Customer
CSF: Growing customer base, Excellent customer service
KPI: No. of new customers attracted per quarter, % of customers complaints per quarter
Target: 2%
+ Internal Business Process
CSF: Efficient Product Assembly Operations
KPI: % of products identified as faulty per week
Target: 1.5%
+ Innovation
CSF: Regular introduction of new products
KPI: No. of new products launched every 15 months
Target: 4
1.7 Describe the different stages of the Business Change Lifecycle
Alignment: aligning the org’s strategy with changes in the Business environment and aligning enterprise architecture with business needs
Definition: Defining IT and non-IT projects each with their own business cases
Design: Defining specific projects in more detail taking into account POPIT
Implementation: The change (POPIT) is developed, tested and deployed
Realisation: Expected benefits from the business change are evaluated to see if they have been achieved. Further activities needed to secure the benefits may also be identified here.
1.3 Name some business environment analysis techniques
+ External Environment analysis:
PESTLE (World Domain)
Porter’s 5 Forces (Business Domain)
\+ Internal Environment Analysis: MOST Analysis (Business Strategy) Resource Audit (Identify and classify resources)
1.1 How would you define business analysis?
The practice of investigating business situations, identifying and evaluating options for improving business systems, defining requirements and ensuring the benefits of a change project is realised and business needs met.
