Strategy Analysis. Chapter Study Group Learning Materials
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1 Chapter Study Group Learning Materials
2 2015, International Institute of Business Analysis (IIBA ). Permission is granted to IIBA Chapters to use and modify this content to support chapter activities. All other rights reserved. 2
3 Study Session Schedule Session Date Chapters Topics 1 Jan 25 1 & 2 Introduction and BA Key Concepts 2 Feb 15 3 Business Analysis Planning and Monitoring 3 Mar 15 4 Elicitation and Collaboration 4 Apr 12 5 Requirements Life Cycle Management 5 May Jun 14 7 Requirements Analysis and Design Definition 7 Jul 12 8 Solution Evaluation or fill out your application 8 Sep 13 9 Underlying Competencies & Perspectives 9 Oct Techniques 10 Nov 1/15 11 Jeopardy Game and Mock Exam 3
4 AGENDA (6:00 6:15) Review of Chapter 5 (15 minutes) (6:15 6:25) Introduction of Chapter 6 (10 minutes) (6:25 6:50) 6.1 Analyze Current State (25 minutes) (6:50 7:15) 6.2 Define Future State (25 minutes) (7:15 7:30) Break (15 minutes) (7:30 8:00) 6.3 Assess Risks (25 minutes) (8:00 8:25) 6.4 Define Change Strategy (25 minutes) (8:30 8:45) Group practice 4
5 INTRODUCTION Chapter 6 of BABOK v3 Consists of tasks performed to: Analyze Current State: Understand the business need and the context for change Define Future State: Determine goals and objectives. Identify what needs to change in order to meet those goals and objectives Assess Risks: Understand risks and recommend actions Define Change Strategy: Identify options for reaching the desired future state. Determine any transitional states required 5
6 INTRODUCTION Purpose Describes the business analysis work to collaborate with stakeholders to identify the business need, enable the organization to address the need and align the resulting strategy for change with other strategies. Define the future and any transition states needed to address the business need. Discover possible solutions to apply the capabilities of the organization in order to reach the desired set of goals and objectives. Ongoing activity as changes in the business need occurs or new information results in an adjustment to the change strategy. A strategy may be captured in a strategic plan, product vision, business case, product roadmap or other artifacts. 6
7 INTRODUCTION 7
8 INTRODUCTION 8
9 STUDY AID Task Analyze Current State Define Future State Mnemonic # of Inputs # of Elements # of Outputs # of Techniques C !!! 10 F 1 11! 3 23!! 10 Assess Risks R # of Stakeholders Define Change Strategy S ! 10 Take predictability of outcome into account: Predictable range of outcomes? = Clear strategy Unpredictable? = mitigate risk, test assumptions, try different strategies (change course) 9
10 INTRODUCTION - APPLYING THE BUSINESS ANALYSIS CORE CONCEPT MODEL Core Concept Change Need Solution Stakeholder Value Context Usage in Define the future state and develop a change strategy to achieve the future state Identify and prioritize needs from the current state to determine the desired future state Define the scope of a solution as part of developing a change strategy Collaborate to understand the business need and develop change strategy and future state to meet needs Examine the potential value of the solution to justify the change Consider context of the enterprise in developing a change strategy 10
11 6.1 Analyze Current State
12 6.1 ANALYZE CURRENT STATE Purpose Understand the reasons why an enterprise needs to change. Understand what would be directly or indirectly affected by the change. Description Change occurs in a context of existing stakeholders, processes, technology and policies of the enterprise. Current state can be described on different levels, from the entire enterprise to small components of the solution. The current state is rarely static while a change is being developed. Changes to the current state may force alterations in the desired future state, change strategy or requirements and designs. 12
13 6.1 ANALYZE CURRENT STATE 13
14 6.1 ANALYZE CURRENT STATE Elicitation Results Used to define and understand the current state. 1. Inputs Needs The problem or opportunity often launches business analysis work to better understand these needs. 14
15 6.1 ANALYZE CURRENT STATE Business Needs Problems and opportunities of strategic importance. May be identified at different levels of the organization. Need to ensure the correct problem is being solved. 2. Elements Organizational Structure and Culture Formal relationships between people. Beliefs, values and norms that drive actions. Assess if cultural changes are necessary to better understand and achieve the goals. 15
16 6.1 ANALYZE CURRENT STATE 2. Elements Capabilities and Processes Activities, knowledge, products and services, supported functions and decision making methods that differentiate the enterprise. Capability-centric view: identify innovative solutions using existing capabilities. Process-centric view: improve current activity performance. Technology and Infrastructure Information systems. Physical components and capabilities. 16
17 6.1 ANALYZE CURRENT STATE Policies Guide operations and decision making of the enterprise and support governance. Identify relevant policies that may shape solution scope or constrain potential solutions to pursue. 2. Elements Business Architecture Understand the context of the current state in order to recommend changes that provide value. Ensure that needs being met by the existing business architecture continue in the future state. Internal Assets Identify resources used in the current state. 17
18 6.1 ANALYZE CURRENT STATE 2. Elements External Influencers May present constraints, dependencies or drivers on the current state: Industry Structure Competitors Customers Suppliers Political and Regulatory Environment Technology Macroeconomic Factors 18
19 6.1 ANALYZE CURRENT STATE Business Analysis Approach Guides analysis of the current state. Enterprise Limitation Helps to understand challenges within the enterprise. 3. Guidelines and Tools Organizational Strategy Set of goals and objectives that guide operations, establishes direction and provides vision for the future state. Implicitly or explicitly stated. 19
20 6.1 ANALYZE CURRENT STATE Solution Limitation Used to understand the challenges of the existing solutions within the current state. 3. Guidelines and Tools Solution Performance Goals Measure current performance as a baseline for improvement and setting future state goals. Solution Performance Measures Actual performance of existing solutions. Stakeholder Analysis Results Stakeholder contributions to understanding the current state. 20
21 6.1 ANALYZE CURRENT STATE Benchmarking and Market Analysis Provides an understanding of where there are opportunities for improvement. 4. Techniques Business Capability Analysis Identifies gaps and prioritizes them in relation to value and risk. Business Model Canvas Provides context for any change by understanding value proposition, critical factors in delivering value and cost and revenue streams of the enterprise. 21
22 6.1 ANALYZE CURRENT STATE Business Cases Captures business need and opportunity information. 4. Techniques Concept Modeling Defines key terms and concepts in the business domain and their relationships. Data Mining Obtain information on enterprise performance. Document Analysis Review existing documentation to better understand current state. 22
23 6.1 ANALYZE CURRENT STATE Financial Analysis Understand the profitability of the current state and financial capability to deliver change. 4. Techniques Focus Group Solicit feedback from customers or end users about the current state. Functional Decomposition Break down components of the current state. Interviews Dialogue with stakeholders to understand current state and their needs. 23
24 6.1 ANALYZE CURRENT STATE Item Tracking Manage issues discovered about the current state. 4. Techniques Lessons Learned Assess failures and opportunities for improvement in past initiatives. Metrics and Key Performance Indicators (KPIs) Assess performance of current state. Mind Mapping Explore current state and better understand factors affecting the business need. 24
25 6.1 ANALYZE CURRENT STATE Observation Insights into needs within the current state not previously identified. 4. Techniques Organizational Modeling Roles, responsibilities and reporting structures within the current state. Process Analysis Identifies opportunities to improve current state. Process Modeling Describes how work occurs within the current solution. 25
26 6.1 ANALYZE CURRENT STATE Risk Analysis and Management Identifies risks to the current state. 4. Techniques Root Cause Analysis To understand underlying cause of any problems to further clarify a need. Scope Modelling Defines boundaries on the current state. Survey or Questionnaire Better understand current state from stakeholders. 26
27 6.1 ANALYZE CURRENT STATE SWOT Analysis Evaluate strengths, weaknesses, opportunities and threats of the current state. 4. Techniques Vendor Assessment Determine if current state vendors are meeting commitments or if changes are needed. Workshops Stakeholders collaborate to describe the current state and their needs. 27
28 6.1 ANALYZE CURRENT STATE 5. Stakeholders Key Stakeholders Customer Domain SME End User Implementation SME Operational Support Project Manager Regulator Sponsor Supplier Tester 28
29 6.1 ANALYZE CURRENT STATE Current State Description The context and relationship among the enterprise s scope, capabilities, resources, performance, culture, dependencies, infrastructure and external influences. 6. Outputs Business Requirements The problem, opportunity or constraint defined based on an understanding of the current state. 29
30 6.2 Define Future State
31 6.2 DEFINE FUTURE STATE Purpose Determine the set of necessary conditions to meet the business need. Description Define the future state at an appropriate level of detail: Allows strategies to achieve the future state to be identified and assessed Provides clear definition of outcomes to satisfy business needs Future state value can be assessed Consensus among stakeholders of shared vision of the outcome Identify components of the enterprise affected by the change and their boundaries Define appropriate performance measures 34
32 6.2 DEFINE FUTURE STATE 35
33 6.2 DEFINE FUTURE STATE Business Requirements Problems, opportunities or constraints that the future state will address. 1. Inputs 36
34 6.2 DEFINE FUTURE STATE 2. Elements Business Goals and Objectives Describes the ends that the organization is seeking to achieve. Longer term goals broken down into specific objectives and linked to measures to assess achievement. Scope of Solution Space Defines which kind of options will be considered when investigating possible solutions. Not directly related to the size of the change. 37
35 6.2 DEFINE FUTURE STATE Constraints Describe aspects of the current state and future state that may not be changed. Carefully examine to ensure they are accurate and justified. 2. Elements Organizational Structure and Culture Identify changes needed to support the future state. Capabilities and Processes Identify new or changed capabilities and processes to realize the future state. 38
36 6.2 DEFINE FUTURE STATE Technology and Infrastructure May impose technical constraints on the solution. Also may need to change. 2. Elements Policies Common source of solution constraints. Identify necessary changes for the desired future state. Business Architecture All elements of the future state must contribute to the overall desired future state of the enterprise as a whole. 39
37 6.2 DEFINE FUTURE STATE Internal Assets Resources may need to be changed or increased to implement the change strategy and support the future state. 2. Elements Identify Assumptions Must be identified and clearly understood to enable decisions if they later prove invalid. Potential Value Evaluate to see if the overall potential value of the solution justifies a change compared to making no change. 40
38 6.2 DEFINE FUTURE STATE Current State Description Provides context for the work to be completed. Starting point for the future state. 3. Guidelines and Tools Metrics and Key Performance Indicators (KPIs) Determine if desired future state has been achieved. Organizational Strategy Path, method or approach to be taken to achieve the desired future state. 41
39 6.2 DEFINE FUTURE STATE Acceptance and Evaluation Criteria Identify what makes future state acceptable and how to evaluate options. 4. Techniques Balanced Scorecard Set targets for measuring the future state. Benchmarking and Market Analysis Make decisions about future state business objectives. Brainstorming Collaborate ideas for the future state. 42
40 6.2 DEFINE FUTURE STATE Business Capability Analysis Prioritize capability gaps in relation to value and risk. Business Cases Capture the desired outcomes of the change initiative. 4. Techniques Business Model Canvas Plan enterprise strategy to fulfill value proposition. Decision Analysis Compare different future states and understand which is the best choice. 43
41 6.2 DEFINE FUTURE STATE Decision Modeling Model complex decisions regarding future state options. Financial Analysis Estimate potential financial returns to be delivered. 4. Techniques Functional Decomposition Break down complex systems for better. understanding Interviews Understand desired future state and needs of stakeholders. 44
42 6.2 DEFINE FUTURE STATE Lessons Learned Determine which opportunities for improvement to address and how current state can be improved. 4. Techniques Metrics and Key Performance Indicators (KPIs) Determine when business objectives have been achieved. Mind Mapping Develop ideas and understand relationships. Organizational Modelling Describe roles, responsibilities and reporting structures within the future state organization. 45
43 6.2 DEFINE FUTURE STATE Process Modelling Describe how work would occur in the future state. Prototyping Model future state options and their potential value. 4. Techniques Scope Modelling Define boundaries of the enterprise. Survey or Questionnaire Understand desired future state of stakeholders and their needs to be addressed. 46
44 6.2 DEFINE FUTURE STATE SWOT Analysis Evaluate strengths, weaknesses, opportunities and threats to be exploited or mitigated. 4. Techniques Vendor Assessment Assess potential value provided by vendor solution options. Workshops Collaborate with stakeholders to describe the future state. 47
45 6.2 DEFINE FUTURE STATE 5. Stakeholders Key Stakeholders Customer Domain SME End User Implementation SME Operational Support Project Manager Regulator Sponsor Supplier Tester 48
46 6.2 DEFINE FUTURE STATE Business Objectives The desired direction that the business wishes to pursue in order to achieve the future state. 6. Outputs Future State Description Boundaries of the proposed components of the enterprise and potential value expected from the future state. Potential Value The value that may be realized by implementing the proposed future state. 49
47 6.3 Assess Risks
48 6.3 ASSESS RISKS Purpose Understand the undesirable consequences of internal and external forces on the enterprise during a transition to or within the future state to recommend a course of action. Description Analyze and manage risks related to the current state, future state, a change itself, a change strategy or any tasks performed by the enterprise. Consequences if the risk occurs Impact of those consequences Likelihood of the risk Potential time frame when the risk might occur Used as an input to identify a change strategy. 54
49 6.3 ASSESS RISKS 55
50 6.3 ASSESS RISKS Business Objectives Desired direction used to identify potential risks. Elicitation Results (confirmed) Stakeholder perceptions of risks to realize their desired future state. 1. Inputs Influences Internal and external factors that impact future state. Potential Value Identify value of future state to assess risks. Requirements (prioritized) Influences the risks associated with the solution. 56
51 6.3 ASSESS RISKS 2. Elements Unknowns Assess risks based on current understanding. Estimate impact of unknown or uncertain events using: Historical context from similar situations Lessons Learned from past changes Expert Judgement from stakeholders Constraints, Assumptions and Dependencies May help identify risks or managed as risks themselves. Negative impact to Value Quantify overall risk level for potential impact. 57
52 6.3 ASSESS RISKS 2. Elements Risk Tolerance Amount of uncertainty the organization is willing to accept in exchange for potential value. Attitudes toward risk: Risk-aversion Neutrality Risk-seeking Recommendation Understand overall risk level and stakeholder tolerance toward risk to recommend a course of action. 58
53 6.3 ASSESS RISKS Business Analysis Approach Guides how risks are analyzed. 3. Guidelines and Tools Business Policies Defines limits for decisions and may mandate aspects of risk management. Change Strategy Provides transition plan from current to future state. Current State Description Provides context for work to be completed. 59
54 6.3 ASSESS RISKS Future State Description Determines risks associated with the future state. Identified Risks Starting point for thorough risk assessment. 3. Guidelines and Tools Stakeholder Engagement Approach Understand stakeholders to identify and assess potential impact to internal and external forces. 60
55 6.3 ASSESS RISKS Brainstorming Collaborate on identity of potential risks for assessment. 4. Techniques Business Cases Capture risks associated with alternative change strategies. Decision Analysis Used to assess problems. Document Analysis Analyze existing documentation for potential risks, constraints, assumptions and dependencies. 61
56 6.3 ASSESS RISKS Financial Analysis Understand the effect of risks on the financial value of the solution. 4. Techniques Interviews Understand what stakeholders think might be risks. Lessons Learned Foundation of past issues that might be risks. Mind Mapping Identify and categorize risks and understand their relationships. 62
57 6.3 ASSESS RISKS Risk Analysis and Management Used to identify and manage risks. Root Cause Analysis Identify and address underlying causes creating risks. 4. Techniques Survey or Questionnaire Understand what stakeholders think might be risks. Workshops Understand what stakeholders think might be risks. 63
58 6.3 ASSESS RISKS 5. Stakeholders Key Stakeholders Domain SME Implementation SME Operational Support Project Manager Regulator Sponsor Supplier Tester 64
59 6.3 ASSESS RISKS Risk Analysis Results An understanding of the risks associated with achieving the future state and the mitigation strategies used to prevent, reduce the impact or likelihood of risk occurring. 6. Outputs 65
60 6.4 Define Change Strategy
61 6.4 DEFINE CHANGE STRATEGY Purpose Develop and assess alternative approaches to the change and then select the recommended approach. Description Content: Describes the nature of the change in terms of: Context of the change Identified alternative change strategies Justification for the recommended change strategy Resources required to move to desired future state How the enterprise will realize value after solution delivery Key stakeholders involved in the change Transition states while working toward future state Formats: depends on perspective of change team and stakeholders e.g., part of business case, SOW, enterprise strategic plan 70
62 6.4 DEFINE CHANGE STRATEGY 71
63 6.4 DEFINE CHANGE STRATEGY Current State Description Provides context about the current state and includes assessments of internal and external influences to the enterprise. 1. Inputs Future State Description Provides context about the desired future state. Risk Analysis Results Identified risks and exposure. Stakeholder Engagement Approach Understand communication and collaboration needs of stakeholders to identify change-related activities to be included in the change strategy. 72
64 6.4 DEFINE CHANGE STRATEGY Solution Scope Defines the solution boundaries in enough detail to enable stakeholder understanding. Describes how the proposed solution enables the future state s goals. 20 components categorize for easier memorizing: 2. Elements Main Components Capabilities Data Process Resources Business rules Organization structure Technology Additional Components Functions Workflows, events and sequences Knowledge and skills Business logic and business decisions Locations, markets and motivations Networks 73
65 6.4 DEFINE CHANGE STRATEGY Gap Analysis Difference between current and future state capabilities. Identifies gaps that prevent the enterprise from meeting needs and achieving goals. 12 capabilities categorize for easier memorizing: 2. Elements Main Capabilities Processes Organization structures Locations Data and information Application systems Technology infrastructure Additional Capabilities Functions Staff competencies, knowledge and skills, training Lines of business, facilities 74
66 6.4 DEFINE CHANGE STRATEGY Enterprise Readiness Assessment Assess the organization s capacity to make and sustain the change in the future state. 2. Elements Change Strategy Key activities and events used to transform the organization from current to future state. Identify preferred change strategy from several options through a business case. Transition States and Release Planning Determine which requirements to include in each release, phase or iteration of the change if the future state will be achieved over time. 75
67 6.4 DEFINE CHANGE STRATEGY Business Analysis Approach Guides definition of the change strategy. Design Options Describes ways to satisfy the business needs. 3. Guidelines and Tools Solution Recommendations Identify possible solutions for the future state with SMEs. 76
68 6.4 DEFINE CHANGE STRATEGY Balanced Scorecard Define metrics used to evaluate effectiveness of the change strategy. 4. Techniques Benchmarking and Market Analysis Make decisions on which strategy is appropriate. Brainstorming Collaborate ideas for change strategies. Business Capability Analysis Prioritize capability gaps in relation to value and risk. 77
69 6.4 DEFINE CHANGE STRATEGY Business Cases Capture information on change strategies. Business Model Canvas Define changes needed to achieve the potential value. 4. Techniques Decision Analysis Compare different strategies and chose the most appropriate. Estimation Determine timeline for activities within the change strategy. 78
70 6.4 DEFINE CHANGE STRATEGY Financial Analysis Understand potential value of the change strategy. Focus Groups Solicit input on the solution and change strategy. 4. Techniques Functional Decomposition Break down components of the solution. Interviews Obtain stakeholder input on solution scope, change scope and change strategy. 79
71 6.4 DEFINE CHANGE STRATEGY Lessons Learned Understand what went wrong in past changes to improve this change strategy. 4. Techniques Mind Mapping Develop and explore ideas for change strategies. Organizational Modelling Describe roles, responsibilities and reporting structures for the change as part of the solution scope. Process Modelling Describe how work would occur during the change. 80
72 6.4 DEFINE CHANGE STRATEGY Scope Modelling Define the boundaries on the solution scope and change scope descriptions. 4. Techniques SWOT Analysis Make decisions about which change strategy is appropriate. Vendor Assessment Determine if vendors are part of the change strategy. Workshops Work with stakeholders to develop change strategies. 81
73 6.4 DEFINE CHANGE STRATEGY 5. Stakeholders Key Stakeholders Customer Domain SME End User Implementation SME Operational Support Project Manager Regulator Sponsor Supplier Tester 82
74 6.4 DEFINE CHANGE STRATEGY Change Strategy The approach that the organization will follow to guide change. 6. Outputs Solution Scope The scope of the solution that will be achieved through execution of the change strategy. 83
75 SUMMARY Move from current state future state What are the risks? How will we get there in the most effective way? Many elements and techniques! Ongoing activity Align with other strategies 84
76 SUMMARY IMPORTANT CONCEPTS Needs Objectives Strategy Business Requirements Scope Potential Value Risks Alternatives 85
77 SUMMARY PERSPECTIVES Agile Perspective Agile can be used if uncertainty about needs, unpredictable outcomes Strategy analysis is constant, every iteration are we still providing value? Are we still meeting business needs? Business Intelligence Perspective Data can be used to identify alternatives, assess problems and opportunities Data is also part of the context and data models can be used to describe current/future states Information Technology Perspective Strategy analysis may be focused on technology change Also part of context and component to be described 86
78 SUMMARY PERSPECTIVES Business Architecture Perspective Can play significant role (element of 6.1) Understand interrelated parts of an organization Business Process Management Perspective Understand role processes play and how they might change 87
79 HOMEWORK What are some of the risks of not analyzing the current state? Are there any circumstances where you would be justified in not doing this task? You ve done the analysis and looked at the options. What steps can you take to increase the likelihood that your change strategy and recommendations will be adopted? 94
80 CHAPTER 6 Group Practice Watermark Online Exam Business Analysis Planning and Monitoring 95
81 CHAPTER 6 Hand-outs Watermark Online Exam Business Analysis Planning and Monitoring 96
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