Understanding the fundamentals of business analysis is the foundation that every business analysts should strive to lay on a solid ground. Business analysts are professionals working towards improving existing and potential processes in a given organization. A business analyst can be called in at any point in the business process journey to offer invaluable insightful advice.

There is this perceived notion that fundamentals of business analysis is all about project management. Well, in as much as there are some elements of truth in this thinking, this idea of likening business analysis to project management does not hold the full story. Business analysis should be viewed from the portfolio perspectives if we are to make any sense from the whole process of analysing a business.

The aim of this article is to explain the tools, models and approaches that business analysts employ in their day to day job in order to meet the high expectation of their clients. This discussion will look at traditional business analysis approach and also the relatively modern approach of portfolio management approach of business analysis.


SWOT: the first tool that business analysts use to get a feel of what is happening in and around a business is the SWOT (Strengths, Weaknesses, Opportunities, and Threats). SWs are those factors or situations that are internal or unique to a business while OTs are factors or situations that are external to businesses.

One thing that I always advice new business analysts is that they should avoid the temptation of using this tool in an abstract situation. For example, the strengths of a company should be channelled towards taking up business opportunities as they show up or converting what initially looks like a threat into opportunities. SWOT analysis when used in the right context produce results that would wow you.

Value chain analysis: the value chain analysis is an essential tool that every manager and business analysts use to scan the operational activities of a company in an attempt to identify the dummy processes that does not add value to the business. Activities are classed into primary and supporting activities. Swim lane diagram is developed in some instances to help management eliminate those processes that are there just to consume resources.

Porter’s five forces: Porter’s five forces help business analysts scan the industry of a business to determine if the industry is a profitable one or not. There attractiveness of an industry is assessed by looking at the number of competitors in the industry, the ease of entering the industry, the existence of close substitute, the power of customers and suppliers. The aim of this process is to make investment decision of whether to invest in a fresh project or to divest from an existing project.

PESTEL: PESTEL stands for Political, Economic, Social, Technological, Ecological, and Legal environment of a business. PESTEL is an important strategic tools used by both managers in performing their managerial functions and consultants when evaluating the long term strategy of a business.

BCG matrix: an important job description of business analysts is to evaluate the portfolio of a going concern and advice on the prospect of the individual projects. This tool relies on a company’s market share and the growth rate of the product in question. Though many people have criticised the BCG matrix because it has led management of some companies into making the wrong strategic decision, but which decision making model is flawless? The problem is that people sometimes miss use the BCG matrix and this usually backfires in all situations.

Mendelow’s diagram: Stakeholder expectation management is an important aspect of business management that needs to be managed with care if a company is to remain in business for long. This model is used to classify stakeholders according to the perceived influence that they will have on a business. The idea is to pamper those stakeholders that have high interest in the company and also poses the power to make moves that would shake the competitive position of a business.


Business impact analysis and feasibility study: before any penny is invested in a project, calculated analysis are performed to establish the disruptive effect of the proposed project should anything go wrong. The result of this process of business impact analysis is then viewed alongside the feasibility report of the proposed investment.

Evaluation of plausible relationship between IT and business objectives: it has been established over the years that no project, no matter how plausible it seemed when viewed alone can add to the betterment of a company if there is no real connection between the company’s objective and the deliverables of the project. For a business analysis process to be complete, it must look at the compatibilities of processes and projects.

Business case evaluation and appraisal: business cases are documents that are prepared at the initial stage of a project. It is expected to contain the rational and business sense behind any proposal. Good business analysis practice entails the appraisal and analysis of a business case to determine the robustness of a proposed investment.

Requirement analysis: a fundamental component of a complete business analysis process is the requirement analysis phase of the analysis cycle. Requirement analysis is divided into; business requirement, users requirements and infrastructure requirement. The reason behind this requirement analysis is to ensure that business solutions that are deployed will satisfy the needs of the business.

I understand that this has been a long article to read, but do bear in mind that all the tools and processes discussed in this post are fully discussed. The aim of this article is to introduce you to the fundamentals of business analysis. Further readings are encouraged so as to expand your knowledge on the tools discussed in the article.

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