To successfully pass the International Institute of Business Analysis (IIBA.org) CBAP® or CCBA® certification exams,  you will be assessed on your fundamental understanding and application of the key concepts in the The Business Analysis Body of Knowledge Guide (BABOK® Guide)’s six knowledge areas. One of those key knowledge areas is Strategy Analysis which we will examine in more detail in this article.

What are BABOK Knowledge Areas?

IIBA’s BABOK Guide provides a global standard for the practice of Business Analysis and is the key source for the CBAP, CCBA and ECBA exams. The BABOK is  organized into six knowledge areas:

• Business Analysis Planning and Monitoring
• Elicitation and Collaboration
• Requirements Life Cycle Management
• Strategy Analysis
• Requirements Analysis and Design Definition
• Solution Evaluation

Note that the ECBA certification exam does not include questions on Strategy Analysis.

• Strategy Analysis describes the work that must be performed in collaboration with stakeholders to identify the business need (problem or opportunity). It enables the organization to respond to that business need and ensure that any new strategy (recommendation) aligns with existing strategic initiatives within the organization.

IIBA defines strategy as: “…the most effective way to apply the capabilities of an enterprise in order to reach a desired set of goals and objectives.”

Why is Strategy Analysis Important?

Strategy Analysis is critical to an organization. Strategy analysis provides the context, impetus and reasons for a given change. Analysis should occur before a project even starts. It is first triggered by the discovery of a business need (problem or an opportunity). Then it helps envision potential solutions that fix the identified problem or take advantage of the opportunity and deliver value. Strategy analysis also helps stakeholders determine whether to address that particular need or to put their resources towards a different problem or opportunity.

Who Should Use Strategy Analysis?

Any organization will benefit from a well-conducted and timely Strategy Analysis. As business analysis is a role not a title, anyone in the organization can conduct strategy analysis.

When to Use Strategy Analysis  

Strategy analysis can be used on any sized change initiative and should be scaled appropriately. Strategy analysis should be done before any project or change initiative begins to ensure the organization is fixing the right problem or taking advantage of the best opportunity. It provides a more detailed analysis of the current state, definition of the desired future state, and then provides a change strategy that recommends the best solution moving forward including a risk assessment and financial analysis of the recommended solution.

The change strategy information can feed into the creation of a business case. The Strategy Analysis results also provide direction for the business analyst to elicit and document requirements that fix the problem or opportunity and meet the business goals and objectives as well as the stakeholder and solution needs. A strong change strategy will help ensure the future outcomes of the change initiative are achieved.

Strategy Analysis Tasks and Outputs

There are four key Strategy Analysis tasks captured in the BABOK:

1. Analyze the Current State
2. Define the Future State
3. Assess the Risks
4. Define the Change Strategy

Analyze Current State

In order to define the desired future state and recommend a solution , the BA must first assess and understand the current business state and establish a baseline to measure progress.

This analysis includes analyzing the business need which acts as the “North Star” for the entire change initiative or project. All the remaining work must be aligned to fixing the problem or achieving the opportunity.

Analyze Current State Description

the BA analyzes the current state to understand the reasons why the organization needs to change some aspect of how it operates and what processes, policies, and other elements would be directly or indirectly affected by the change. throughout the change initiative or project.”

Analyze Current State Outputs

There are two core outputs of this task.

• Current State Description that may include some or all of the following:
  • Business need
  • organizational structure and culture
  • capabilities and processes
  • technology and infrastructure
  • policies
  • business architecture
  • internal assets
  • external influencers (industry structure, competitor, customers, suppliers, political and regulatory environment, technology, and macroeconomic factors)

Business Requirements – the problem, opportunity, or constraint that was identified while understanding of the current state

Define Future State

The future state provides the set of conditions necessary to meet the business need and to define success for the organization. The future state should be well-defined and achievable given available resources. Before moving towards the future state, key stakeholders should have a shared consensus of the future state vision.

Define Future State Description

When defining the Future State, the BA will help stakeholders define the business goals and objectives. These will demonstrate that the business need has been satisfied, scope out the solution space, identify any constraints, define what parts of the enterprise need to change in order to meet those goals and objectives, identify any assumptions the made defining the future state and determine the potential value from the future state.”

Define Future State Outputs

There are three core outputs of this task.

• Future State Description – The set of conditions necessary to meet the business need and to define success. This may include some or all of the following:
  • organizational structure and culture
  • capabilities and processes
  • technology and infrastructure
  • policies
  • business architecture
  • internal assets
  • external influencers
• Business Objectives – The specific target the enterprise wants to reach as it pursues its desired future state.
• Potential Value – the value that may be realized if the future state is implemented expressed in terms of benefits vs costs

Assess Risks

A strategy that fails to factor in risks is most likely to fail. The BA must complete a risk assessment to ensure the desired future state can be achieved or make adjustments  if the business need changes.

Assess Risk Description

The business analyst needs to be able to identify and manage the risks that could impact the transition to future state or the future state once implemented.They also need to consider the  effect those risks may have on the ability to deliver value, and recommends actions to address those risks where appropriate.”

The business analyst should analyze risks for…

• the possible consequences if the risk occurs,
• the impact of the risk on the change
• the probability the risk will occur
• the potential time frame when the risk may occur

Assess Risks Outputs

There is one core outputs of this task.

Risk Analysis Results – identification of risks that could impact the achievement of the future state, mitigation strategies which may prevent or reduce the likelihood of the risk occurring or reduce its impact.

Define Change Strategy

The change strategy ultimately develops and assesses alternative approaches to the change and proposes the “best” recommended change strategy that will move the organization from the current state to the future state. A change strategy should contain:

• context why the change is needed
• alternative strategies to accomplish the change
• a recommended strategy and why it was selected
• the solution scope
• an organizational readiness assessment
• timelines for the transition, release planning
• costs and resources need, alignment to the business objectives
• financial analysis
• the expected value of the change

Define Change Description

According to IIBA  the business analyst “performs a gap analysis between current and future state, assesses options for achieving the future state, and recommends the highest value approach for reaching the future state including any transition states that may be required.” The business analyst describes the nature of the change in terms of the context of the change, offers alternative change strategies, provides justification for why a particular change strategy is best, determines the investment and resources needed for the change, defines how value from the solution with be realized, identifies key stakeholders in the change and defines any transition states that may be needed.

Change Strategy Outputs

• Change Strategy – A plan to move from the current state to the future state toachieve the desired business objectives.
• Solution Scope – the set of capabilities the solution must deliver to meet the business need.

Tips for a Successful Strategy Analysis

To ensure your success, here are a few tips.

Stakeholder Tips

• Involve stakeholders throughout the process.
• Be flexible.
• Provide multiple solution options.

Data, research, and input Tips

• Ensure the change strategy aligns with the organizational strategy.
• Use data and evidence to support your recommendations.
• Study the competitive landscape for insights into current and future states.

Conclusion

Strategy Analysis is one of the six BABOK knowledge areas. A business analyst can use these tasks to support the organization in reaching their desired future state and outcomes. BAs may perform some or all of the tasks and and will need to scope their tasks to fit the organization’s needs. The IIBA’s Business Analysis CBAP and CCBA certification exams includes questions on  the application of tasks found in the Strategy Analysis knowledge area.