A failure mode and effects analysis (FMEA) is a structured approach to identifying design failures in a product or process. Developed in the 1950s, the failure mode and effects analysis is one the earliest methodologies of its kind. It enables organizations to anticipate a range of potential failures during the design stage.
Agile Business Analysis (AgileBA) is certification in the form of guidance and training for business analysts seeking to work in agile environments. To support this shift, AgileBA also helps the business analyst relate Agile projects to a wider organizational mission or strategy. To ensure that analysts have the necessary skills and expertise, AgileBA certification was developed.
Business valuations involve a formal analysis of the key operational aspects of a business. A business valuation is an analysis used to determine the economic value of a business or company unit. It’s important to note that valuations are one part science and one part art. Analysts use professional judgment to consider the financial performance of a business with respect to local, national, or global economic conditions. They will also consider the total value of assets and liabilities, in addition to patented or proprietary technology.
A paired comparison analysis is used to rate or rank options where evaluation criteria are subjective by nature. The analysis is particularly useful when there is a lack of clear priorities or objective data to base decisions on. A paired comparison analysis evaluates a range of options by comparing them against each other.
The Monte Carlo analysis is a quantitative risk management technique. The Monte Carlo analysis was developed by nuclear scientist Stanislaw Ulam in 1940 as work progressed on the atom bomb. The analysis first considers the impact of certain risks on project management such as time or budgetary constraints. Then, a computerized mathematical output gives businesses a range of possible outcomes and their probability of occurrence.
A cost-benefit analysis is a process a business can use to analyze decisions according to the costs associated with making that decision. For a cost analysis to be effective it’s important to articulate the project in the simplest terms possible, identify the costs, determine the benefits of project implementation, assess the alternatives.
Financial modeling involves the analysis of accounting, finance, and business data to predict future financial performance. Financial modeling is often used in valuation, which consists of estimating the value in dollar terms of a company based on several parameters. Some of the most common financial models comprise discounted cash flows, the M&A model, and the CCA model.
The CATWOE analysis is a problem-solving strategy that asks businesses to look at an issue from six different perspectives. The CATWOE analysis is an in-depth and holistic approach to problem-solving because it enables businesses to consider all perspectives. This often forces management out of habitual ways of thinking that would otherwise hinder growth and profitability. Most importantly, the CATWOE analysis allows businesses to combine multiple perspectives into a single, unifying solution.
It’s possible to identify the key players that overlap with a company’s business model with a competitor analysis. This overlapping can be analyzed in terms of key customers, technologies, distribution, and financial models. When all those elements are analyzed, it is possible to map all the facets of competition for a tech business model to understand better where a business stands in the marketplace and its possible future developments.
The Pareto Analysis is a statistical analysis used in business decision making that identifies a certain number of input factors that have the greatest impact on income. It is based on the similarly named Pareto Principle, which states that 80% of the effect of something can be attributed to just 20% of the drivers.
A comparable company analysis is a process that enables the identification of similar organizations to be used as a comparison to understand the business and financial performance of the target company. To find comparables you can look at two key profiles: the business and financial profile. From the comparable company analysis it is possible to understand the competitive landscape of the target organization.
A SWOT Analysis is a framework used for evaluating the business’s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.
The PESTEL analysis is a framework that can help marketers assess whether macro-economic factors are affecting an organization. This is a critical step that helps organizations identify potential threats and weaknesses that can be used in other frameworks such as SWOT or to gain a broader and better understanding of the overall marketing environment.
Business analysis is a research discipline that helps driving change within an organization by identifying the key elements and processes that drive value. Business analysis can also be used in Identifying new business opportunities or how to take advantage of existing business opportunities to grow your business in the marketplace.
In corporate finance, the financial structure is how corporations finance their assets (usually either through debt or equity). For the sake of reverse engineering businesses, we want to look at three critical elements to determine the model used to sustain its assets: cost structure, profitability, and cash flow generation.
In finance, the capital asset pricing model (or CAPM) is a model or framework that helps theoretically assess the rate of return required for an asset to build a diversified portfolio able to give satisfactory returns.
The capital structure shows how an organization financed its operations. Following the balance sheet structure, usually, assets of an organization can be built either by using equity or liability. Equity usually comprises endowment from shareholders and profit reserves. Where instead, liabilities can comprise either current (short-term debt) or non-current (long-term obligations).
Financial modeling involves the analysis of accounting, finance, and business data to predict future financial performance. Financial modeling is often used in valuation, which consists of estimating the value in dollar terms of a company based on several parameters. Some of the most common financial models comprise discounted cash flows, the M&A model, and the CCA model.
Behavioral finance or economics focuses on understanding how individuals make decisions and how those decisions are affected by psychological factors, such as biases, and how those can affect the collective. Behavioral finance is an expansion of classic finance and economics that assumed that people always rational choices based on optimizing their outcome, void of context.
Value investing is an investment philosophy that looks at companies’ fundamentals, to discover those companies whose intrinsic value is higher than what the market is currently pricing, in short value investing tries to evaluate a business by starting by its fundamentals.
First proposed by accounting academic Robert Kaplan, the balanced scorecard is a management system that allows an organization to focus on big-picture strategic goals. The four perspectives of the balanced scorecard include financial, customer, business process, and organizational capacity. From there, according to the balanced scorecard, it’s possible to have a holistic view of the business.
The Buffet Indicator is a measure of the total value of all publicly-traded stocks in a country divided by that country’s GDP. It’s a measure and ratio to evaluate whether a market is undervalued or overvalued. It’s one of Warren Buffet’s favorite measures as a warning that financial markets might be overvalued and riskier.
Double-entry accounting is the foundation of modern financial accounting. It’s based on the accounting equation, where assets equal liabilities plus equity. That is the fundamental unit to build financial statements (balance sheet, income statement, and cash flow statement). The basic concept of double entry is that a single transaction, to be recorded, will hit two accounts.
The income statement, together with the balance sheet and the cash flow statement is among the key financial statements to understand how companies perform at fundamental level. The income statement shows the revenues and costs for a period and whether the company runs at profit or loss (also called P&L statement).
Financial statements help companies assess several aspects of the business, from profitability (income statement) to how assets are sourced (balance sheet), and cash inflows and outflows (cash flow statement). Financial statements are also mandatory to companies for tax purposes. They are also used by managers to assess the performance of the business.
Revenue modeling is a process of incorporating a sustainable financial model for revenue generation within a business model design. Revenue modeling can help to understand what options make more sense in creating a digital business from scratch; alternatively, it can help in analyzing existing digital businesses and reverse engineer them.
Financial accounting is a subdiscipline within accounting that helps organizations provide reporting related to three critical areas of a business: its assets and liabilities (balance sheet), its revenues and expenses (income statement), and its cash flows (cash flow statement). Together those areas can be used for internal and external purposes.
Post-mortem analyses review projects from start to finish to determine process improvements and ensure that inefficiencies are not repeated in the future. In the Project Management Book of Knowledge (PMBOK), this process is referred to as “lessons learned”.
Retrospective analyses are held after a project to determine what worked well and what did not. They are also conducted at the end of an iteration in Agile project management. Agile practitioners call these meetings retrospectives or retros. They are an effective way to check the pulse of a project team, reflect on the work performed to date, and reach a consensus on how to tackle the next sprint cycle.
In essence, a root cause analysis involves the identification of problem root causes to devise the most effective solutions. Note that the root cause is an underlying factor that sets the problem in motion or causes a particular situation such as non-conformance.
A break-even analysis is commonly used to determine the point at which a new product or service will become profitable. The analysis is a financial calculation that tells the business how many products it must sell to cover its production costs. A break-even analysis is a small business accounting process that tells the business what it needs to do to break even or recoup its initial investment.
Stanford University Professor Ronald A. Howard first defined decision analysis as a profession in 1964. Over the ensuing decades, Howard has supervised many doctoral theses on the subject across topics including nuclear waste disposal, investment planning, hurricane seeding, and research strategy. Decision analysis (DA) is a systematic, visual, and quantitative decision-making approach where all aspects of a decision are evaluated before making an optimal choice.
Business acumen describes an ability to understand and deal with business risks and opportunities in a manner that is likely to facilitate a good outcome. At the same time that is the ability to have an holistic understanding of business scenarios which combine both data analysis and heuristics. Thus, knowing when to use data, and when instead to trust intuition.
A DESTEP analysis is a framework used by businesses to understand their external environment and the issues which may impact them. The DESTEP analysis is an extension of the popular PEST analysis created by Harvard Business School professor Francis J. Aguilar. The DESTEP analysis groups external factors into six categories: demographic, economic, socio-cultural, technological, ecological, and political.
The STEEP analysis is a tool used to map the external factors that impact an organization. STEEP stands for the five key areas on which the analysis focuses: socio-cultural, technological, economic, environmental/ecological, and political. Usually, the STEEP analysis is complementary or alternative to other methods such as SWOT or PESTEL analyses.
The STEEPLE analysis is a variation of the STEEP analysis. Where the step analysis comprises socio-cultural, technological, economic, environmental/ecological, and political factors as the base of the analysis. The STEEPLE analysis adds other two factors such as Legal and Ethical.
Activity-based management (ABM) is a framework for determining the profitability of every aspect of a business. The end goal is to maximize organizational strengths while minimizing or eliminating weaknesses. Activity-based management can be described in the following steps: identification and analysis, evaluation and identification of areas of improvement.
PMESII-PT is a tool that helps users organize large amounts of operations information. PMESII-PT is an environmental scanning and monitoring technique, like the SWOT, PESTLE, and QUEST analysis. Developed by the United States Army, used as a way to execute a more complex strategy in foreign countries with a complex and uncertain context to map.
The SPACE (Strategic Position and Action Evaluation) analysis was developed by strategy academics Alan Rowe, Richard Mason, Karl Dickel, Richard Mann, and Robert Mockler. The particular focus of this framework is strategy formation as it relates to the competitive position of an organization. The SPACE analysis is a technique used in strategic management and planning.
A lotus diagram is a creative tool for ideation and brainstorming. The diagram identifies the key concepts from a broad topic for simple analysis or prioritization.
Functional decomposition is an analysis method where complex processes are examined by dividing them into their constituent parts. According to the Business Analysis Body of Knowledge (BABOK), functional decomposition “helps manage complexity and reduce uncertainty by breaking down processes, systems, functional areas, or deliverables into their simpler constituent parts and allowing each part to be analyzed independently.”
The multi-criteria analysis provides a systematic approach for ranking adaptation options against multiple decision criteria. These criteria are weighted to reflect their importance relative to other criteria. A multi-criteria analysis (MCA) is a decision-making framework suited to solving problems with many alternative courses of action.
A stakeholder analysis is a process where the participation, interest, and influence level of key project stakeholders is identified. A stakeholder analysis is used to leverage the support of key personnel and purposefully align project teams with wider organizational goals. The analysis can also be used to resolve potential sources of conflict before project commencement.
Strategic analysis is a process to understand the organization’s environment and competitive landscape to formulate informed business decisions, to plan for the organizational structure and long-term direction. Strategic planning is also useful to experiment with business model design and assess the fit with the long-term vision of the business.
Key Highlights
Failure Mode And Effects Analysis:
Structured approach to identify design failures in a product or process.
Anticipates potential failures during the design stage.
Enables better resource utilization and target performance achievement.
Agile Business Analysis (AgileBA):
Certification and guidance for business analysts in agile environments.
Helps relate Agile projects to organizational mission and strategy.
Ensures analysts possess necessary skills and expertise.
Business Valuation:
Formal analysis of key operational aspects of a business.
Determines the economic value of a business or company unit.
Incorporates financial performance, assets, liabilities, and technology.
Paired Comparison Analysis:
Ranks options with subjective evaluation criteria.
Useful when clear priorities or objective data are lacking.
Compares a range of options against each other.
Monte Carlo Analysis:
Quantitative risk management technique.
Considers risk impact on project management.
Provides a range of possible outcomes and probabilities.
Cost-Benefit Analysis:
Analyzes decisions based on associated costs.
Identifies project implementation benefits and assesses alternatives.
Articulates projects in simple terms for effective analysis.
CATWOE Analysis:
Problem-solving strategy considering six different perspectives.
Offers holistic approach to problem-solving.
Combines multiple perspectives into a unifying solution.
VTDF Framework:
Analyzes key players overlapping with a company’s business model.
Considers customers, technologies, distribution, and financial models.
Helps understand competition in the marketplace.
Pareto Analysis:
Identifies input factors impacting income significantly.
Based on Pareto Principle – 80% effect from 20% drivers.
Comparable Analysis:
Identifies similar organizations for comparison.
Assesses business and financial performance of target company.
Understands competitive landscape of the target organization.
SWOT Analysis:
Evaluates strengths, weaknesses, opportunities, and threats.
Identifies problematic areas and potential challenges.
Helps in strategic decision-making.
PESTEL Analysis:
Assesses macro-economic factors affecting an organization.
Identifies potential threats and weaknesses in the marketing environment.
Complements other frameworks like SWOT.
Business Analysis:
Research discipline to identify key elements driving value.
Identifies new business opportunities and growth strategies.
Financial Structure:
How corporations finance their assets through debt or equity.
Determines cost structure, profitability, and cash flow generation.
CAPM Model:
Helps assess the rate of return required for asset diversification.
Guides portfolio management for satisfactory returns.
Behavioral Finance:
Focuses on how psychological factors affect decision-making.
Expands classic finance to consider human biases.
Value Investing:
Looks for companies with intrinsic value higher than market pricing.
Evaluates businesses based on their fundamentals.
Balanced Scorecard:
Management system to focus on strategic goals.
Includes financial, customer, process, and organizational perspectives.
Buffet Indicator:
Measures total value of publicly-traded stocks divided by GDP.
Warns of potential market overvaluation and risks.
Double Entry Accounting:
Foundation of modern financial accounting.
Transaction recorded in two accounts.
Income Statement:
Key financial statement showing revenues, costs, and profit or loss.
Financial Statements:
Used to assess business performance and for tax purposes.
Includes balance sheet, income statement, and cash flow statement.
Revenue Modeling:
Incorporates sustainable revenue generation in business model design.
Analyzes existing digital businesses and reverse engineers them.
Financial Accounting:
Provides reporting on assets, liabilities, revenues, expenses, and cash flows.
Used for internal and external purposes.
Post-Mortem Analysis:
Reviews projects to determine process improvements.
Helps avoid inefficiencies in future projects.
Retrospective Analysis:
Determines what worked well and what didn’t.
Provides insight for future project sprints.
Root Cause Analysis:
Identifies underlying factors causing problems.
Aims to devise effective solutions.
Blindspot Analysis:
Evaluates blind spots to avoid hindrance to growth and profitability.
Break-even Analysis:
Determines the point of profitability for new products or services.
Decision Analysis:
Systematic approach to evaluate all aspects of a decision.
Helps make optimal choices.
Business Acumen:
Ability to understand and manage business risks and opportunities.
Combines data analysis and intuition.
DESTEP Analysis:
Framework to understand external factors impacting a business.
Groups factors into demographic, economic, socio-cultural, technological, ecological, and political categories.
STEEP Analysis:
Tool to map external factors impacting an organization.
Includes socio-cultural, technological, economic, environmental/ecological, and political factors.
STEEPLE Analysis:
Variation of STEEP analysis with added Legal and Ethical factors.
Activity-Based Management:
Determines profitability of all aspects of a business.
Identifies areas of improvement.
PMESII-PT Analysis:
Environmental scanning and monitoring technique.
Organizes large amounts of operations information.
SPACE Analysis:
Technique used in strategic management and planning.
Focuses on competitive position of an organization.
Lotus Diagram:
Creative tool for ideation and brainstorming.
Identifies key concepts from a broad topic.
Functional Decomposition:
Analyzes complex processes by dividing them into parts.
Helps manage complexity and reduce uncertainty.
Multi-Criteria Analysis:
Ranks adaptation options against multiple decision criteria.
Considers weighted importance of criteria.
Stakeholder Analysis:
Identifies key project stakeholders and their interest and influence levels.
Aligns project teams with organizational goals.
Strategic Analysis:
Understands the organization’s environment and competitive landscape.
Formulates informed business decisions and long-term planning.
Framework/Concept
Description
When to Use
Advantages
Drawbacks
Failure Mode And Effects Analysis
A structured approach to identify design failures and potential failures in the design stage.
In product or process development to enhance reliability.
Enhanced product reliability, risk mitigation.
Resource-intensive, may not cover all scenarios.
Agile Business Analysis
Guidance and training for business analysts working in agile environments.
To support agile project delivery and align with organizational goals.
Adaptation to changing requirements, collaboration.
Requires training and adaptation to agile principles.
Business Valuation
Analysis to determine the economic value of a business or company unit.
In assessing the worth of a business in various economic conditions.
Informed financial decisions, valuation insights.
Subjective judgment and market variability.
Paired Comparison Analysis
Rates or ranks options with subjective criteria by comparing them.
When evaluating options with subjective evaluation criteria.
Subjective assessment, relative comparison.
May not consider absolute performance.
Monte Carlo Analysis
Quantitative risk management technique to model range of possible outcomes.
To assess project risks, time, or budgetary constraints.
Probabilistic insights, risk assessment.
Requires data input and modeling expertise.
Cost-Benefit Analysis
Analyzes decisions based on costs and benefits, aiding resource allocation.
To evaluate the economic feasibility of projects and decisions.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
