Enterprise Analysis

Introduction

Enterprise Analysis (EA) encompasses those activities that the job title "Business Analyst" actually points toward: analyzing business processes. The majority of these activities is outside of projects, and in fact, put the BA into the position of recommending and justifying projects.

Enterprise Analysis

Analyzing business processes is indeed a big part of what we do during Requirements Analysis. But that is not the only context where this analysis should be done, and in fact, it is not the most valuable time to do it. In the Enterprise Analysis knowledge area, the BABOK identifies several other contexts in which such analysis should be done.

Activity: Creating and Maintaining the Business Architecture

As the name of this activity implies, "Creating and Maintaining the Business Architecture" is an on-going activity that has as its focus the entire enterprise. The "Business Architecture" is a model of all the business processes that are used throughout the enterprise. It shows how they work and relate to each other.

The net result of this is an understanding that most organizations lack, of how all their moving parts mesh with each other. This broad understanding of the enterprise's processes becomes the foundation for all of the other responsibilities of the BA. But its bigger value comes in providing every member of the organization with a clear understanding of how his or her department and individual job fits into the bigger picture

Recommending and Justifying Projects

The bulk of the activities described in the Enterprise Analysis knowledge area center around proposing and justifying projects. These are activities that occur in some form or other in any organization. But with the BA's involvement, they can provide much more value and ensure the organization's resources are spent on the most valuable projects.

Activity: Conducting Feasibility Studies

Projects are created to solve a problem or to take advantage of an opportunity. It is rare for there to be only one available solution to a problem or opportunity, so part of project initiation involves exploring the alternatives. The BA can provide a valuable service by calling upon his or her understanding of the Business Architecture to analyze the feasibility of a variety of options.

Activity: Determining Project Scope

Scope definition should not be the first step in requirements development; it should be done during the project proposal process. How can the decision-maker(s) approve or disapprove a project without a clear understanding of its boundaries?

Activity: Preparing the Business Case

The business case is the logical argument for embarking on a project. It consists of contrasting the status quo (current situation) with the various options for addressing the problem or opportunity at hand and recommending the most appropriate option. In most cases, these options are being contrasted in terms of money (e.g., "If we spend $x on this project, it will result in $y increased revenue per year").

Activity: Conducting the Initial Risk Assessment

An important piece of information that the decision-makers need is an understanding of the risks involved in a project. Clearly, you cannot do a complete risk-planning workshop before the project has been initiated (that is part of the Project Planning process). But an initial survey of the project risks can provide the decision-makers with key information.

Activity: Preparing the Decision Package

The BA has no authority to approve or disapprove any project. The people who do have that authority rarely have the time that is necessary to do the requisite research. So, the BA's role in the decision-making process is to do all of the necessary research, and compile it into a form the decision-makers can use.

Activity: Selecting and Prioritizing Projects

After a project has been approved, it should not be a foregone conclusion that it will begin immediately. Projects must be prioritized against each other so the organization's resources can be deployed in the most appropriate way. Again, the BA is not the decision-maker, but provides the necessary analysis to the decision-makers.

Project Work beyond Requirements

The last three activities that the BABOK includes under the "Enterprise Analysis" knowledge area are project-related activities that go beyond Requirements Analysis. They continue the theme of Enterprise Analysis by maintaining a broad organizational view of the project.

Activity: Launching New Projects

Here, the BA works with the appropriate people in the organization to ensure that the necessary resources, including the right project manager, are committed to the project. The BA's unique role in these activities is to focus on the bigger picture of why the project was approved and how it fits into the bigger organizational context. This ensures that the intent of the decision-makers is honored as the project is framed and kicked off.

Activity: Managing Projects for Value

In this activity, the BA works closely with the project manager to ensure the project is tracking toward providing the value that was promised in the business case (above). The BA helps the project manager keep the project's value proposition on track. And if the assumptions on which the project was approved turn out to be false, the BA can help the decision-makers determine their best response.

Activity: Tracking Project Benefits

In this last activity, the BA closes the loop on the business case (above). The business case proposed making certain investments in order to accrue certain benefits. After the project is over, the actual investments are known, and the actual benefits can be measured. At some appropriate time after deployment, the BA should report back to the decision-makers about how the results of the project compare with the business case. This discussion process will help the organization make better decisions in the future.

Expanding Your Value as a BA

Requirements Analysis is an important way for the BA to provide value to his or her organization. By adding Enterprise Analysis, the BA can dramatically increase his or her value by ensuring that every project fits well into the bigger picture and provides the best possible result to the organization.

What is Environmental Analysis?

Environmental analysis is a strategic tool. It is a process to identify all the external and internal elements, which can affect the organization’s performance. The analysis entails assessing the level of threat or opportunity the factors might present. These evaluations are later translated into the decision-making process. The analysis helps align strategies with the firm’s environment.

Our market is facing changes every day. Many new things develop over time and the whole scenario can alter in only a few seconds. There are some factors that are beyond your control. But, you can control a lot of these things.

Businesses are greatly influenced by their environment. All the situational factors which determine day to day circumstances impact firms. So, businesses must constantly analyze the trade environment and the market.

There are many strategic analysis tools that a firm can use, but some are more common. The most used detailed analysis of the environment is the PESTLE analysis. This is a bird’s eye view of the business conduct. Managers and strategy builders use this analysis to find where their market currently.  It also helps foresee where the organization will be in the future.

PESTLE analysis consists of various factors that affect the business environment. Each letter in the acronym signifies a set of factors. These factors can affect every industry directly or indirectly.

The letters in PESTLE, also called PESTEL, denote the following things:

• Political factors
• Economic factors
• Social factors
• Technological factors
• Legal factors
• Environmental factor

Often, managers choose to learn about political, economic, social and technological factors only. In that case, they conduct the PEST analysis.  PEST is also an environmental analysis. It is a shorter version of PESTLE analysis. STEP, STEEP, STEEPLE, STEEPLED, STEPJE and LEPEST: All of these are acronyms for the same set of factors. Some of them gauge additional factors like ethical and demographical factors.

I will discuss the 6 most commonly assessed factors in environmental analysis.

P for Political factors

The political factors take the country’s current political situation. It also reads the global political condition’s effect on the country and business. When conducting this step, ask questions like “What kind of government leadership is impacting decisions of the firm?”

Some political factors that you can study are:

• Government policies
• Taxes laws and tariff
• Stability of government
• Entry mode regulations

 

E for Economic factors

Economic factors involve all the determinants of the economy and its state. These are factors that can conclude the direction in which the economy might move. So, businesses analyze this factor based on the environment. It helps to set up strategies in line with changes.

I have listed some determinants you can assess to know how economic factors are affecting your business below:

• The inflation rate
• The interest rate
• Disposable income of buyers
• Credit accessibility
• Unemployment rates
• The monetary or fiscal policies
• The foreign exchange rate

S for Social factors

Countries vary from each other. Every country has a distinctive mindset. These attitudes have an impact on the businesses. The social factors might ultimately affect the sales of products and services.

Some of the social factors you should study are:

• The cultural implications
• The gender and connected demographics
• The social lifestyles
• The domestic structures
• Educational levels
• Distribution of Wealth

T for Technological factors

Technology is advancing continuously. The advancement is greatly influencing businesses. Performing environmental analysis on these factors will help you stay up to date with the changes. Technology alters every minute. This is why companies must stay connected all the time. Firms should integrate when needed. Technological factors will help you know how the consumers react to various trends.

Firms can use these factors for their benefit:

• New discoveries
• Rate of technological obsolescence
• Rate of technological advances
• Innovative technological platforms

L for Legal factors

Legislative changes take place from time to time. Many of these changes affect the business environment. If a regulatory body sets up a regulation for industries, for example, that law would impact industries and business in that economy. So, businesses should also analyze the legal developments in respective environments.

I have mentioned some legal factors you need to be aware of:

• Product regulations
• Employment regulations
• Competitive regulations
• Patent infringements
• Health and safety regulations

E for Environmental factors

The location influences business trades. Changes in climatic changes can affect the trade. The consumer reactions to particular offering can also be an issue. This most often affects agri-businesses.

Some environmental factors you can study are:

• Geographical location
• The climate and weather
• Waste disposal laws
• Energy consumption regulation
• People’s attitude towards the environment

There are many external factors other than the ones mentioned above. None of these factors are independent. They rely on each other.

If you are wondering how you can conduct environmental analysis, here are 5 simple steps you could follow:

1.     Understand all the environmental factors before moving to the next step.

2.     Collect all the relevant information.

3.     Identify the opportunities for your organization.

4.     Recognize the threats your company faces.

5.     The final step is to take action.

It is true that industry factors have an impact on the company performance. Environmental analysis is essential to determine what role certain factors play in your business. PEST or PESTLE analysis allows businesses to take a look at the external factors. Many organizations use these tools to project the growth of their company effectively.

The analyses provide a good look at factors like revenue, profitability, and corporate success. If you want to take the right decisions for your firm, employ environmental analysis. The analysis you should conduct depends on the nature of your company.

ENVIRONMENT ANALYSIS is the study of the organizational environment to pinpoint environmental factors that can significantly influence organizational operations.

MANAGERS commonly perform environmental analyses to help them understand what is happening both inside and outside their organizations and to increase the probability that the organizational strategies they develop will appropriately reflect the organizational environment.

In order to perform an environmental analysis efficiently and effectively, a manager must thoroughly understand how organizational environments are structured.

For purposes of environmental analysis, the environment of an organization is generally divided into 3 distinct levels:

1.     General Environment

2.     Operating Environment

3.     Internal Environment

Managers must be well aware of these 3 organizational environmental levels, understand how each level affects organizational performance and then formulate organizational strategies in response to this understanding.

THE GENERAL ENVIRONMENT:

The components normally considered part of the general environment are:

• Economic
• Social: Including Demographics and Social Values
• Political
• Legal
• Technological

THE OPERATING ENVIRONMENT:

The operating Environment includes various components like:

• Customer
• Competition
• Labour
• Supplier
• International Issues.

THE INTERNAL ENVIRONMENT:

The level of an organization’s environment that exists inside the organization and normally has immediate and specific implications for managing the organization is the internal environment.

It includes marketing, finance and accounting,planning,organizing, influencing and controlling within the organization.

THE IMPORTANCE OF ENVIRONMENTAL ANALYSIS IN MANAGING BUSINESS ORGANISATIONS.
An environmental analysis in plays an essential role in business management by providing possible opportunities or threats outside the company in its external environment. The purpose of an environmental analysis is to help to develop a plan by keeping decision-makers within an organization. The changes can be include exchanging of executive parties, increasing guidelines to decrease pollution, technological developments, and fluctuating demographics. An environment analysis helps the industries to improve the outline of their environment to find more opportunities or threats.

The environmental analysis has to be implemented at an internal level, as well as an external level, to identify all opportunities and threats of the external and internal environment. Moreover this analysis is helpful to find the strengths and weaknesses of the any organization. External analysis of the environment is generally emphases on the customers. External environmental also refers to the aspects of the technological, commercial, economic, financial, political, regulatory, socio-cultural and physical environments of an organization.Whereas, the internal analysis focuses at the current situation of resources, strengths or weakness of an organization. Internal environment refers to the capabilities and limitations of the organisation and it has no limitations.