Strategy Setting in a Project

Business Analysis: Crafting Effective Strategies

This guide focuses on the critical role of strategy in business analysis, outlining the key tasks and considerations for developing successful strategies.

Understanding Strategy

Strategy defines how an organization uses its resources to achieve its goals and objectives. It can be applied at various levels: enterprise-wide, divisional, departmental, regional, product-specific, project-based, or even at the iteration level.

Strategy analysis aims to identify the necessary future and transitional states to meet a business need. The scope of this analysis depends on the complexity of the problem and the nature of the business requirement. It involves discovering or creating potential solutions that enhance stakeholder value and/or organizational value.

Strategy analysis provides context for design specifications and requirements analysis. It should be conducted as soon as a business need is identified to determine whether and how to address it. It’s an ongoing process, adapting to changes in the need, context, or new information.

When conducting strategy analysis, business analysts consider the predictability of potential outcomes. Predictable changes allow for well-defined future states and clear implementation plans.

Key takeaway: A strategy can be documented in various artifacts, such as a strategic plan, product vision, business case, or product roadmap.

Key Strategy Analysis Tasks

1. Analyze Current State: Understand the business need and its relationship to the organization’s current operations. Establish a baseline and context for change.

2. Define Future State: Clearly define the goals and objectives that demonstrate the business need has been met. Specify which parts of the organization need to change.

3. Assess Risks: Identify and analyze potential uncertainties surrounding the change and their impact on value delivery. Recommend actions to mitigate risks. This involves:

   • Identifying potential risks (from the current state, future state, the change itself, or the change strategy).
   • Analyzing the consequences, impact, likelihood, and timeframe of each risk.

4. Define Change Strategy: Conduct a gap analysis between the current and future states. Evaluate options for achieving the future state and recommend the highest-value approach, including any necessary transition states.

Assessing Risks: A Crucial Step

Risk assessment is vital for developing robust strategies. It’s important to be aware of cognitive biases that can influence risk perception. Consider these aspects:

• Risk Identification: Identify internal and external factors that could negatively impact the organization during the transition or in the future state.
• Risk Analysis: Analyze the potential consequences, impact, likelihood, and timeframe of each identified risk.
• Risk Response: Develop strategies to mitigate or accept risks. This might involve:
  • Risk avoidance
  • Risk mitigation
  • Risk transfer
  • Risk acceptance

The risk assessment informs the selection or adjustment of the change strategy. If the cost of mitigating a risk outweighs the potential loss, the risk might be accepted. Effective risk management throughout the change process can significantly improve the chances of success.

Recommended Resources for Risk Assessment

To improve your understanding of risk assessment and how cognitive biases can affect decision-making, consider exploring these books:

• Noise by Daniel Kahneman, Olivier Sibony, and Cass R. Sunstein
• The Signal and the Noise by Nate Silver