How to Analyze Data For Strategic Initiatives

Every strategic business analysis solution must be based on data. Before Strategic business analysts start collecting information, they need to decide what they are trying to find out and, therefore, what kind of data they require. Otherwise, one can end up with a mass of information that is of no practical use. It is quite easy to start a highly structured data collection program without reflecting what the data is to be used for.

Any business unit's analysis is basically of two kinds. First, analyzing the strategic nature to assess the unit's important activities, objectives, and environment within which these processes are being undertaken and, secondly, tactical analysis to examine the unit from a day-to-day operational perspective.

The main tasks analyzing data are:

Task 1: Analyze strategy

The diagnosis of a unit's problems must first begin with general strategic analysis. The purpose of this analysis is to have a clear view of the unit quickly and efficiently 'where the shoe pinches' before engaging in more detailed data collection work.

It aims to initiate a strategic process to identify possible fronts where competitiveness and profitability can be refined. Strategic business analysts should investigate:

1. Core business purpose of the unit

2. Strategic position of the unit, it’s strengths, weaknesses, and competition

3. Potential of the unit and the business units (should include financial analysis and an assessment of the product lifecycle).

A key part of this analysis must involve a study of the competitive position and industry structure in which the unit is operating, the forces impacting the unit and its competitors, and all the possible competitive advantage resources within the unit.

4. What kind of strategy is the unit following? Is it based on the cost advantage or the differentiation strategy, or is it grounded on focusing on a particular niche market segment? Is the acquired strategy still relevant, or is it threatened by new competition or new technology? Has the unit's strategy been coherent?

It is also very important to be considered how far the unit might impact the forces that influence the industry, but this needs to be put into a long-term perspective. Short-term gains by one unit can sometimes lead to instability in the industry, encouraging new competition that is ultimately detrimental to the unit that initiated the change.

Within the unit, there will be many resources of competitive advantages. These will be along the value chain – the different pursuits involved in designing, producing, marketing, and delivering the product promised.

Task 2: Analyze operations

No matter how good a unit's strategic position is, this can be held back by its operations deficiencies. The operational analysis should mainly cover activities and information analysis. 'Activities' in this context mean 'a group of logically related decisions made and actions carried out to manage products, services or resources.'

It is usually difficult to do a complete activity analysis of the whole unit because of the amount of time this demands, so several activities have to be taken. Which activities are to be selected for analysis will be determined by the conclusions of the strategic analysis.

One useful technique here is value chain analysis, which 'illustrates the unit's overall customer-perceived value creation, with emphasis on the work that is to be done for production, marketing, and delivery/support the products and services offered.'

The information analysis aims to examine the information flows 'among the identified value chain activities. The information analysis may well highlight several problems related. It will determine which activities are 'information-intensive,' and it will enable Strategic business analysts to compare the unit's value chain with its structure. Thus, it will draw attention to the activities where the unit linkages are weak and highlight where operations are least effective.

Task 3: Collect Data

The assignment's nature will determine what kind of data is required. This is generally either internal or external data. The aim should be to collect a certain number of objective facts, but additional subjective facts and interpretations will color these. Depending on the character of the assignment, the subjective information can be important – sometimes more so – than the objective, verifiable data.

The choice of which kind of data to collect should be influenced by the obvious business considerations of the unit’s unit and other cultural and political factors intrinsic to the unit. For example, the views point of certain individuals or departments, although not very useful to the assignment, may need to be consulted. This is where Strategic business analysts show tact, discretion, and intuition in the unit.

Task 4: Reframe problem statement

These modes of analysis will then prompt a Strategic business analyst to reconsider the unit's situation. This is a time for reflection. Often the business units are too ready to make snap judgments based on their initial information.

The initial analysis frequently leads to a review of what the task should focus on. This can be a bit tricky time for the business unit, especially if it has fixed views about what's to be done or the main problems. Strategic business analysts with an outside view will see things differently. The series of analyses described prior will have brought to light many pieces of information that have either been overlooked, underestimated, or ignored.

Task 5: Establish the key issues

Once the data has been composed, it will be clear what the main issues for diagnosis are. Usually, a cluster of issues will present themselves. These may show a discrepancy between the unit’s goals and its competencies or between its objectives and its financial performance. They may suggest that the unit is pursuing strategies that have now become contradictory. The data so far collected may not be all point in the same direction. The diagnosis will clarify what is happening.

I would like to hear about your thoughts as senior business analysts.

Thanks for reading.