BABOK Guide Notes: Chapter 6 - Strategy Analysis Notes

  • Strategy Analysis: core purpose

    • Strategy defines the most effective way to apply the capabilities of an enterprise to reach a desired set of goals and objectives.

    • Strategies may exist for the entire enterprise, for a division, department or region, and for a product, project, or iteration.

    • Strategy Analysis describes the business analysis work to collaborate with stakeholders to identify a business need of strategic or tactical importance, enable the enterprise to address that need, and align the resulting strategy for the change with higher- and lower-level strategies.

    • Focus: define the future and transition states needed to address the business need, and the work required is defined by the need and the scope of the solution space.

    • Strategy analysis covers strategic thinking in business analysis and the discovery/imagination of possible solutions that create more value for stakeholders and/or capture more value for the enterprise.

    • Strategy analysis provides context to requirements analysis and design definition for a given change.

    • It should be performed as soon as a business need is identified, so stakeholders can decide whether to address it or not.

    • Strategy analysis is ongoing and adapts to changes in the need, context, or new information that may require adjusting the change strategy.

  • Value Spectrum (context for strategy work)

    • The spectrum shows business analysis value progression from delivering potential value to achieving actual value.

    • When outcomes are predictable, future state and transition states can be defined, enabling a clear strategy and plan.

    • If outcomes are less predictable, the strategy may shift toward risk mitigation, testing assumptions, and iterating until a viable path is found.

    • A strategy may be captured in artifacts such as a strategic plan, product vision, business case, or product roadmap.

  • Strategy Analysis tasks (high level)

    • Analyze Current State: understand the business need and how it relates to the current enterprise, establishing baseline/context for change.

    • Define Future State: define goals/objectives showing the business need is satisfied and identify what parts of the enterprise must change.

    • Assess Risks: understand uncertainties around the change, their potential effects on value delivery, and recommend risk responses.

    • Define Change Strategy: perform a gap analysis between current and future state, assess options for achieving the future state, and recommend the highest-value change approach including any transition states.

  • Core Concept Model in Strategy Analysis (BACCM)

    • Change: the act of transformation in response to a need; define the future state and develop a change strategy.

    • Need: a problem or opportunity to be addressed; identify needs within the current state and prioritize to determine the future state.

    • Solution: a specific way of satisfying one or more needs in a context; define the scope of a solution as part of developing a change strategy.

    • Stakeholder: a group or individual with a relationship to the change, need, or solution; collaborate to understand the business need and develop a change strategy and future state.

    • Value: the worth, importance, or usefulness of something to a stakeholder; examine potential value to determine if a change is justified.

    • Context: the circumstances that influence, are influenced by, and provide understanding of the change; consider the enterprise context in developing a change strategy.

  • Strategy Analysis: Input/Output and relationships (overview)

    • Inputs to strategy analysis include: current state descriptions, future state descriptions, business requirements, risks, stakeholder engagement approaches, and potential value.

    • Outputs include: business requirements, business objectives, future state description, risk analysis results, change strategy, solution scope, and measures of potential value.

    • The process is designed to support linking a business need to viable change options and to facilitate decision-making among stakeholders.

  • Analyze Current State (6.1)

    • 6.1.1 Purpose: understand why the enterprise needs to change and what would be affected by the change.

    • 6.1.2 Description: starting point of change; articulate business needs that drive change; change occurs within existing stakeholders, processes, technology, and policies (the current state).

    • 6.1.3 Inputs: Elicitation Results; Needs (problem or opportunity that triggers analysis).

    • 6.1.4 Elements (.1 to .8):

    • .1 Business Needs: problems/opportunities of strategic importance; triggers evaluation; needs expressed from enterprise perspective; often tied to a presumed solution; assess impacts/benefits/costs/risks.

    • .2 Organizational Structure and Culture: formal/informal relationships; culture beliefs/ norms; assess need for cultural changes; understand stakeholder understanding of current state value.

    • .3 Capabilities and Processes: activities, knowledge, products/services, decisions; core capabilities that differentiate the enterprise; capabilities organized hierarchically; consider gap analysis; end-to-end process view to improve performance.

    • .4 Technology and Infrastructure: information systems; infrastructure including hardware, plants, logistics; operation and upkeep considerations.

    • .5 Policies: scopes of decision-making; guide behavior; constraints on solution space; influence change scope.

    • .6 Business Architecture: interrelated elements must fit together; value of current architecture; ensure changes preserve value.

    • .7 Internal Assets: tangible/intangible resources (finance, patents, reputation, brand).

    • .8 External Influencers: industry structure, competitors, customers, suppliers, political/regulatory environment, technology, macroeconomics; can constrain or drive change; terminology may vary by sector (e.g., customers vs citizens).

    • 6.1.5 Guidelines and Tools: Business Analysis Approach; Enterprise Limitation; Organizational Strategy; Solution Limitation; Solution Performance Goals; Solution Performance Measures; Stakeholder Analysis Results.

    • 6.1.6 Techniques: a long list of techniques including Benchmarking, Market Analysis, Business Capability Analysis, Business Model Canvas, Data Mining, Document Analysis, Financial Analysis, Focus Groups, Interivews, SWOT, Workshops, etc.

    • 6.1.7 Stakeholders: Customer, Domain Subject Matter Expert, End User, Implementation Subject Matter Expert, Operational Support, Project Manager, Regulator, Sponsor, Supplier, Tester.

    • 6.1.8 Outputs: Current State Description; Business Requirements.

    • 6.1.9 Dependent notes: business needs drive the current-state analysis; ensure needs drive analysis; explore deeper causes; consider internal/external influencers.

  • Define Future State (6.2)

    • 6.2.1 Purpose: determine the conditions needed to meet the business need.

    • 6.2.2 Description: future state defined to allow competing strategies to be identified, define outcomes that satisfy needs, scope the solution space, and enable consensus; describe what changes to boundaries/processes/etc. are needed.

    • 6.2.3 Inputs: Business Requirements.

    • 6.2.4 Elements (6.2.4 to 6.2.6):

    • .1 Business Goals and Objectives: describe ends organization seeks; long-term goals decompose into objectives; SMART framework to convert goals into measurable objectives.

      • SMART:

        • Specific

        • Measurable

        • Achievable

        • Relevant

        • Time-bounded

    • .2 Scope of Solution Space: define which options to consider; includes changes to structure, capabilities, processes, technology, policies, partnerships; decision on which future states to pursue based on value and timing.

    • .3 Constraints: budgets, time, technology, infrastructure, policies, resource limits, regulatory requirements, and other restrictions.

    • .4 Organizational Structure and Culture: formal/informal relationships may need to change; reporting line changes encourage teams to align goals and objectives; culture may need change; insight into potential conflicts, impact and limits.

    • .5 Capabilities and Processes: Identify new activities; new/changed capabilities and processes for new products/services for regulatory compliance or to improve performance.

    • .6 Technology and Infrastructure: Identify changes for future state; existing technology may impose technical constraints, including hardware/software platforms, resource utilisation, number/size of files, records, and data elements, IT architecture standards.

    • .7 Policies: Identify changes for future state; Existing policies may constrain solution e.g. approval levels and process.

    • .8 Business Architecture: elements must support one another, contribute to meeting goals and objectives, and be integrated into overall future state.

    • .9 Internal Assets: increase capabilities and amount of existing resources, develop new resources.

    • .10 Identify Assumptions: Strategy predicated on assumptions in uncertain environment. Structure change strategy for testing assumptions as early as possible to support redirection or termination of initiative if needed.

    • .11 Potential Value: Net benefit of solution after accounting for operating costs. Consider potential value from external opportunities, new partners, new technologies/knowledge, potential loss of market competitor, mandated adoption of change.

    • 6.2.5 Guidelines and Tools: Current State Description; Metrics and KPIs; Organizational Strategy; etc.

    • 6.2.6 Techniques: Acceptance/Evaluation Criteria; Balanced Scorecard; Benchmarking; Brainstorming; Business Capability Analysis; Business Cases; Business Model Canvas; Decision Analysis; Financial Analysis; Interviews; Lessons Learned; KPIs; Mind Mapping; Organizational Modelling; Process Modelling; Prototyping; Scope Modelling; Survey/Questionnaire; SWOT; Vendor Assessment; Workshops.

    • 6.2.7 Stakeholders: Customer; Domain SME; End User; Implementation SME; Operational Support; Project Manager; Regulator; Sponsor; Supplier; Tester.

    • 6.2.8 Outputs: Business Objectives; Future State Description; Potential Value.

  • Assess Risks (6.3)

    • 6.3.1 Purpose: understand undesired consequences of internal/external forces during transition to future state or during operation; use to guide action.

    • 6.3.2 Description: risks analyzed for possible consequences, impact, likelihood, and time frame; risks used to inform change strategy; can accept or mitigate risk as appropriate; positive risk considered as opportunities in some methods.

    • 6.3.3 Inputs: Business Objectives; Elicitation Results (confirmed); Influences (internal/external); Potential Value; Requirements (prioritized).

    • 6.3.4 Elements: Unknowns; assess likelihood/impact; use past contexts/lessons to inform risk; collaborate with stakeholders on impact.

    • 6.3.5 Guidelines and Tools: Business Analysis Approach; Business Policies; Change Strategy; Current State Description; Future State Description; Identified Risks; Stakeholder Engagement Approach.

    • 6.3.6 Techniques: Brainstorming; Business Cases; Decision Analysis; Document Analysis; Financial Analysis; Interviews; Lessons Learned; Mind Mapping; Risk Analysis and Management; Root Cause Analysis; Surveys; Workshops.

    • 6.3.7 Stakeholders: Domain SME; Implementation SME; Operational Support; Project Manager; Regulator; Sponsor; Supplier; Tester.

    • 6.3.8 Outputs: Risk Analysis Results (risks and mitigation strategies).

  • Define Change Strategy (6.4)

    • 6.4.1 Purpose: develop and assess alternative approaches and select the recommended approach.

    • 6.4.2 Description: change strategy describes the nature of change, context, alternatives, justification, investment/resources, realization of value, key stakeholders, and transition states; can be presented as part of a business case, SOW, or strategic plan; may entail partial achievement of future state and staged transition.

    • 6.4.3 Inputs: Current State Description; Future State Description; Risk Analysis Results; Stakeholder Engagement Approach.

    • 6.4.4 Elements:

    • .1 Solution Scope: boundaries of the solution; how it enables future-state goals; may be described via capabilities, technology, data, processes, locations, org structures, etc.; may include out-of-scope components.

    • .2 Gap Analysis: difference between current and future state; identify missing capabilities; determine if current state suffices or if change is needed; list gaps across processes, functions, org structures, staff, data, systems, and infrastructure.

    • .3 Enterprise Readiness Assessment: capacity of the enterprise to make and sustain the change; includes cultural/operational readiness, timeline, and available resources.

    • .4 Change Strategy: high-level plan of key activities/events to transform from current to future state; can be a single initiative or a set of projects/continuous improvements; identify several options, select a preferred strategy considering readiness, costs, timelines, alignment to objectives, value realization, and opportunity costs; business cases may be prepared for each potential strategy; discuss opportunity costs of rejected options.

    • .5 Transition States and Release Planning: future state often realized over time via transition states; plan release/iterations considering budget, deadlines, resources, training, absorptive capacity; minimize disruption and ensure understanding across the organization.

    • 6.4.5 Guidelines and Tools: Business Analysis Approach; Design Options; Solution Recommendations; Scope; etc.

    • 6.4.6 Techniques: Balanced Scorecard; Benchmarking; Brainstorming; Business Capability Analysis; Business Cases; Business Model Canvas; Decision Analysis; Estimation; Financial Analysis; Focus Groups; Functional Decomposition; Interviews; Lessons Learned; Mind Mapping; Organizational Modelling; Process Modelling; Scope Modelling; SWOT; Vendor Assessment; Workshops.

    • 6.4.7 Stakeholders: Customer; Domain SME; End User; Implementation SME; Operational Support; Project Manager; Regulator; Sponsor; Supplier; Tester.

    • 6.4.8 Outputs: Change Strategy; Solution Scope.

  • Practical cross-cutting notes

    • A change strategy can include multiple partial changes; some parts of the future state may be realized earlier than others.

    • The investment and transition plan should align with organizational readiness and value realization timelines.

    • Stakeholder engagement is a continuous thread across all four Strategy Analysis tasks; planning and executing engagement influences risk, requirements, and acceptance of change.

    • The BACCM framework (Change, Need, Solution, Stakeholder, Value, Context) is used to interpret and relate concepts throughout Strategy Analysis.

    • Tools and techniques are used to gather, validate, and prioritize information; outputs from one task feed inputs to subsequent tasks (e.g., Current State outputs feed Define Future State and Gap Analyses).

  • Quick reference: typical artifacts and outputs by task

    • Analyze Current State: Current State Description; Business Requirements; Elicitation Results (confirmed); Needs; Stakeholder Analysis Results; etc.

    • Define Future State: Future State Description; Business Objectives; Potential Value; KPIs/Metrics; Stakeholder Approaches; Requirements (prioritized); Design Options.

    • Assess Risks: Risk Analysis Results; Identified Risks; Influences; Future/Current State Descriptions; Stakeholder Engagement Approach; Recommendations.

    • Define Change Strategy: Change Strategy; Solution Scope; Transition States; Release Plan; Business Cases; Design Options; Actionable Recommendations.

  • Notation and formatting notes for study

    • Use the BACCM core concepts to map needs, changes, and value as you study each section.

    • Remember the SMART criteria when defining future-state objectives: ext{SMART} = ( ext{Specific}, ext{Measurable}, ext{Achievable}, ext{Relevant}, ext{Time-bounded}).

    • When reviewing techniques, be able to name at least 5 common techniques and describe their purpose (e.g., Benchmarking, Brainstorming, Interviews, Focus Groups, SWOT).

    • Be able to explain the difference between current state, future state, and transition states, and why gap analysis is critical for prioritizing change.

  • Connections to practice and impact

    • Strategy analysis informs requirements analysis and design definition by framing what value must be delivered and how changes should be shaped to achieve it.

    • The analysis considers internal and external influencers (policies, culture, market forces, regulators) to ensure feasibility and sustainability of the change.

    • The process supports risk-aware decision making, enabling stakeholders to balance potential value against cost, time, and risk.

  • Key takeaway for exam preparation

    • Master the four main tasks (Analyze Current State, Define Future State, Assess Risks, Define Change Strategy) and be able to outline their purpose, inputs/outputs, main elements, stakeholders, and common guidelines/tools.

    • Be comfortable with the BACCM relationships and how each core concept influences change strategy.

    • Be ready to describe how gap analysis leads to the selection of a preferred change strategy and how transition/release planning supports value realization over time.