2022 PGDip DAY 3

PDBA: MODULE 3
Day 3
Business Process
Analysis (Lydia Palmer)
6/28/2022 1
www.criticalthought.co.za
BUSINESS IMPROVEMENT
DAY 2 DAY 3 DAY 4 DAY 5
Decide which Manage the
Issues & Process Improvement
INTRODUCTION
Problems to Improvement Process
Investigate
Identify the Resource Improvement

Identify the
Business Planning for Application &
Business Issues
Processes to be Improvement Future State
& Problems
Improved Objectives
Prioritise the
Issues &
Problems
6/28/2022 2
Business Improvement Techniques (1)
1. Problem 2. Problem 3. Decision
Identification Prioritisation Making
Issue Analysis Value Analysis PEST(LE) Analysis
Cost benefit
Dimension Analysis Pareto Analysis Analysis
Cause & Effect

SWOT Analysis
Diagrams
5 Why’s & Check

De Bono’s (Hats)
Sheets
6/28/2022 3
4. Process 5. Process 6. Resource 7. Managing
Identification Improvement Planning the Process
Process SREDIM Capacity Performance

Modelling Framework Planning Measurement
Dimension
Flowcharting Benchmarking
Analysis (Again)
SIPOC DIAGRAMS Cycle Time Improvement

Reduction Priorities
RADAR Charts
Rhombus of
Change
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Business Improvement Stages
1. Problem Identification
2. Problem Prioritisation
3. Decision Making
4. Process Identification
5. Techniques for Process Improvement
6. Resource Planning
7. Manage the Improvement Process
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Role of The Business Analyst
Identify
Business
Objective
Create New Create Current

Requirements State Model
Present
BUSINESS Analyse
Solutions to Current State
Stakeholders ANALYST Model
Conduct Gap Create Future

Analysis State Model(s)
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RECAP of our PURPOSE
• The role of the Business Analyst
• Process Improvement Checklist
• …………………
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DAY 3
Decide which Problems & Issues to solve
6/28/2022 8
Cost benefit
Cause & Effect

SWOT Analysis
Diagrams
5 Why’s & Check

De Bono’s (Hats)
Sheets
6/28/2022 9
Process
Dimension
SREDIM Performance
Modelling Analysis
Framework Measurement
(Revisited)
Flowcharting Cycle Time Capacity

Benchmarking
Reduction Planning
RADAR Charts
SIPOC Project Network Improvement
DIAGRAMS Rhombus of Diagrams Priorities
Change
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Decide which Manage the
INTRODUCTION
Problems to Improvement Process
Investigate
Identify the Resource Improvement

Identify the
Business Planning for Application &
Business Issues
Processes to be Process Future State
& Problems
Improved Improvement
Prioritise the
Issues &
Problems
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DECISION MAKING
PEST(LE) Analysis
SWOT Analysis
Cost Benefit Analysis
De Bono’s (Hats)
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Decision Making
• Decision Making Techniques are very useful
tools.
• Often the numbers are not enough, and
one needs to technique that includes some
more aspects to help with the decision.
• These are techniques that can be handy
when deciding some Business choices.
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Decision Making
▪ Some tools to for the Business Analysts to use
with Stakeholders to make some choices. They
help the Analyst to “ASK the RIGHT QUESTIONS”
▪ SWOT Analysis
▪ PEST(LE) Analysis
▪ Cost Benefit Analysis
▪ Six Thinking Hats
(The last one is extra for interest – but a very good technique
never the less.)
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DECISION MAKING TECHNIQUES
• Decision making techniques provide a
framework or guidelines for the types of
questions that need to be asked.
• They help one to look at a problem or a
suggested solution from different points
of view, before taking a decision.
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PEST(LE) Analysis
BUSINESS IMPROVEMENT TECHNIQUES
DECISION MAKING
6/28/2022 16
What is PEST(LE) Analysis?
• A popular instrument for identifying and
analysing the impact of external factors on
business operations.
• PESTLE is an acronym for Political,
Economic, Social, Technological, (Legal &
Environmental).
• https://youtu.be/bYn4CyL3r5w
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PEST ANALYSIS
• An examination of the macro-environment
that affects all businesses.
• Sometimes called the BIG PICTURE
• Used to consider the organisations
environments before embarking on a
marketing process.
• Works very well in conjunction with SWOT
Analysis.
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PEST ANALYSIS
• Political,
• Economical,
• Social,
• Technical.
– factors that affect the business.
– Both Internal and External.
– Works very well with SWOT Analysis.
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PESTLE ANALYSIS
• Extra L and E are for :-
– Legal &
– Ecological
• Environment can be divided into three
components:-
– Internal
– Micro
– Macro
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EXTERNAL FACTORS?
• External factors:
–factors which are beyond the
business’s control but their
implications need to be understood.
• The PESTLE factors can be categorized in the

SWOT Analysis in the Opportunities and
Threats segment.
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5 1
4 2
3
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The PESTLE Analysis Process
1. Brainstorm and record the key issues that are beyond the
company’s control.
2. The implications of each issue should be broadly
identified.
3. Each issue should be rated according to its importance to
the organization (Eg; Is it critical or insignificant?).
4. There should be a rating of the likelihood that the issue
will occur (Eg Is it certain or it will probably never
happen?).
5. Briefly contemplate the consequences if the issue did
occur.
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Political Factors - Example
• Determine the extent to which a government
may have influence over the country’s
economy, or a particular industry.
• Examples:
– Fiscal policy,
– trade tariffs and
– policies concerning tax
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Economic Factors - Examples
• Determine an economy’s performance and
have a direct impact on company, potentially
causing long term effects.
• Examples :
– interest rate,
– inflation rate,
– economic growth patterns and
– foreign exchange rates.
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Social Factors - Examples
• Examination of the social atmosphere in
relation to the market.
• Examples:
– Trends (cultural),
• Eg. A buying trend is that there is increased
demand in Western nations during the holidays.
– population analytics and
– demographics.
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Technological Factors - Examples
• Technological innovations that may have an
impact on the industry processes and the
market in a positive or negative way.
• Examples of technological elements include:
– mechanization,
– technological cognizance and
– research and development.
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Legal Factors - Examples
• Both internal and external.
– Internal Company Policies and National Laws.
• Examples:
– The labour laws,
– consumer laws and
– health and safety standards.
• These can also influence the Strengths &
Weaknesses Sectors of SWOT Analysis.
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Environmental Factors
• Determined by the surrounding environment.
• Specifically important in agriculture, farming
and tourism.
• Examples:
– Geographical location,
– Weather,
– Climate and
– Global changes.
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Where can PESTLE Analysis be useful?
• Introducing a new product/service.

• Venturing into an unfamiliar region or
country.
• Exploring a new segment in the market.
• Working within a strategic project team.
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PESTLE Analysis Conclusion
• The 6 elements of the PESTLE Analysis are
invaluable for any industry.
• The PESTLE Analysis framework assists in the
understanding of the market.
• Important tool in Strategic Decision making.
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WEBSITES
• https://youtu.be/bYn4CyL3r5w
• https://www.lucintel.com/pestle-analysis-
south-africa-2016.aspx - REPORT
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Prioritise the Manage the
INTRODUCTION
Problems Improvement Process
(cont.)
Decide which Resource Improvement

Identify the
Issues & Planning for Application &
Business Issues
Problems to Improvement Future State
& Problems
Investigate Objectives
Identify the
Prioritise the
Business
Issues &
Processes to be
Problems
Improved
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Dimension Analysis Pareto Analysis SWOT Analysis
Cause & Effect Cost benefit

Diagrams Analysis
5 Why’s & Check

De Bono’s (Hats)
Sheets
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DECISION MAKING
PEST(LE) Analysis
SWOT ANALYSIS
De Bono’s (Hats)
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SWOT Analysis
DECISION MAKING
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SWOT ANALYSIS
• SWOT Analysis is a Strategic Planning technique
used to understand the Strengths, Weaknesses,
Opportunities and Threats involved in a project
or business. But also very good for decsion
making.
• Developed by Albert S Humphrey in 1960’s.
• Helps us to identify:-
– INTERNAL (Strengths & Weaknesses)
– EXTERNAL (Opportunities & Threats)
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SWOT ANALYSIS
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SWOT Analysis Diagram
Strengths Weaknesses
Opportunities Threats
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INTERNAL
Helpful Harmful
❖ PATENTS ❖ GAP IN CAPABILITIES

❖ FINANCIAL RESERVES ❖ HIGH COST STRUCTURE
❖ BRAND RECOGNITION ❖ POOR REPUTATION WITH
CUSTOMERS
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SWOT ANALYSIS - Strengths
• An Organisation Strengths are resources and
capabilities (within the organisation) that are
available to meet its strategic business goals.
– Patents
– Brand Recognition
– Market Share
– Financial Reserves
– Location
– Leadership
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STRENGTHS • WEAKNESSES
• Powerful retail brand globally
• Value for money, convenience, wide
range of products
• Online shopping, joint ventures & local
recruitment
• buy in bulk, benefits from economies
of scale.
OPPORTUNITIES • THREATS
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SWOT ANALYSIS - Weaknesses
• An Organisation Weaknesses are
deficiencies within the organisation that
may restrict or limit meeting their goals.
– Gap in capabilities
– Poor reputation with customers
– Cash-flow difficulties
– High cost structure
– Legacy IT systems
6/28/2022 43 43
• Powerful retail brand globally • profit impacted by bad debt from
• Value for money, convenience, wide credit cards and high levels of
range of products household insurance claims
• Online shopping, joint ventures & local • lack of experience in some markets
recruitment that it intends to enter (own brand
• buy in bulk, benefits from economies smartphones and tablets)
of scale. • needs to invest a lot of cash in new
web technologies and IT.
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EXTERNAL
Helpful Harmful
❖ NEW TECHNOLOGIES ❖ NEW RULES FROM REGULATORY

AGENCY
❖ NEW TRENDS & MARKET ❖ CHANGE IN MARKET DEMAND
OPPORTUNITIES
❖ PARTNERSHIPS ❖ NEW COMPETITOR WITH CHEAPER
PRODUCT/SERVICE
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SWOT ANALYSIS - Opportunities
• Opportunities can occur when changes happen in the
external environment.
• Might provide a chance to introduce a new product or
service that can add value to your organisation.
(Necessity is the mother of invention!)
– New technologies
– Customer needs
– Trends
– New market opportunity
– Partnerships
6/28/2022 46 46
• Powerful retail brand globally • profit impacted by bad debt from credit
• Value for money, convenience, wide cards and high levels of household
range of products insurance claims
• Online shopping, joint ventures & local • lack of experience in some markets that
recruitment it intends to enter (own brand
• buy in bulk, benefits from economies of smartphones and tablets)
scale. • needs to invest a lot of cash in new web
technologies and IT.
• Online shopping can offer greater
flexibility to customers – growing
market in South Africa
• Expansion in markets where grocery
retail market faces relatively limited
competition yet fiercely price-sensitive
- SA prime example
• Offering own-brand tablets and
smartphones intersect with investment
in6/28/2022
multimedia streaming services
(target low-income consumers)
47 47
SWOT ANALYSIS - Threats
• Threats are external changes or threats that
could become a barrier to attaining the
business goals.
– Competitors
– New rules and regulations
– Change in market demand
– Tax changes
– Interest and /or exchange rates
6/28/2022 48 48
• Online shopping can offer greater • Is the target of consistent competition
flexibility to customers – growing – faces local competitors (Shoprite,
market in South Africa Checkers)
• Expansion in markets where grocery • Effect of town planning and consumer
retail market faces relatively limited intolerance for out-of-town stores can
competition yet fiercely price-sensitive impact Tesco’s expansion plans in
- SA prime example South Africa
• Offering own-brand tablets and • Wal-Mart is Tesco’s largest global
smartphones intersect with investment competitor and therefore has the
in6/28/2022
multimedia streaming services necessary skills, resources, experience
49 49
and funds to cause Tesco problems
Aim of a SWOT Analysis
• Reveal the firm’s competitive advantages.
• Analyse the prospects for sales, profitability and
product development.
• Prepare the company for problems.
• Allow for the development of contingency plans.
• A SWOT analysis is a process to identify where an
organisation is strong and where vulnerabilities are
— where the business should defend and attack.
• The result of the process is a “plan of action”.
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Aim of a SWOT Analysis
• The analysis can be performed on a product, on a
service, a company or even on an individual.
• Done properly, SWOT will provide the business with a big
picture of the most important factors that influence
survival and prosperity. In addition to providing a plan to
act on.
• And lastly, when looking at opportunities and threats of
an organisation, PEST Analysis can help to ensure that a
business does not overlook external factors such as new
government regulations, or technological changes in your
industry.
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When to use SWOT ANALYSIS
• Business & Strategic Planning
• Evaluating competitors
• Marketing efforts
• New production development
• Research reports
• Team building
• To identify problems or issues in the organisation
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SWOT Analysis Diagram
Strengths Weaknesses
Opportunities Threats
6/28/2022 53 53
SWOT & Porters 5 Forces
ANALYSIS - Websites
• SWOT
– https://www.liveplan.com/blog/what-is-a-swot-
analysis-and-how-to-do-it-right-with-examples/
– https://www.examples.com/business/detailed-
swot-analysis.html
• PORTERS 5 FORCES
– https://youtu.be/Dfp23xSqpdk
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MORE SWOT Analysis Examples
• Questions that can help inspire your
analysis
• Here are a few questions that you can ask
your team when you’re building your SWOT
analysis.
• These questions can help explain each
section and spark creative thinking.
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STRENGTHS
The internal, positive attributes of your company.
These are things that are within your control.
• What business processes are successful?
• What assets do you have in your team, such as
knowledge, education, network, skills, and
reputation?
• What physical assets do you have, such as customers,
equipment, technology, cash, and patents?
• What competitive advantages do you have over your
competition?
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WEAKNESSES
The negative factors that detract from your
strengths. Things to improve to be competitive.
• Are there things that your business needs to be
competitive?
• What business processes need improvement?
• Are there tangible assets that your company
needs, such as money or equipment?
• Are there gaps on your team?
• Is your location ideal for your success?
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OPPORTUNITIES
External factors in your business environment that are
likely to contribute to your success.
• Is your market growing and are there trends that
will encourage people to buy more of what you are
selling?
• Are there upcoming events that your company may
be able to take advantage of to grow the business?
• Are there upcoming changes to regulations that
might impact your company positively?
• If your business is up and running, do customers
think highly of you?
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THREATS
External factors that you have no control over.
You may want to consider putting in place contingency plans for
dealing with them, if they occur.
• Do you have potential competitors who may enter your market?
• Will suppliers always be able to supply the raw materials you
need at the prices you need?
• Could future developments in technology change how you do
business?
• Is consumer behavior changing in a way that could negatively
impact your business?
• Are there market trends that could become a threat?
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READ THESE ON YOUR OWN
• The following 11 slides are from an OLD CASE
study, but can help you to try to COMBINE the
techniques to help make decisions.
• PLEASE GO THROUGH THESE SLIDES ON YOUR

OWN IN YOUR OWN TIME, for your own
understanding!
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TESCO:
CASE STUDY - EXAMPLE
SWOT ANALYSIS
6/28/2022 61
Brief Overview
• Tesco plc was the United Kingdom’s top retailer in
2013
• And maintains a presence in 12 countries in Europe
and Asia
• To sustain its position and build profitability, Tesco
must assess its Strengths, Weaknesses,
Opportunities and Threats
6/28/2022 62 62
• Online shopping can offer greater • Is the target of consistent competition
flexibility to customers – growing – faces local competitors (Shoprite,
market in South Africa Checkers)
• Expansion in markets where grocery • Effect of town planning and consumer
retail market faces relatively limited intolerance for out-of-town stores can
competition yet fiercely price-sensitive impact Tesco’s expansion plans in
- SA prime example South Africa
• Offering own-brand tablets and • Wal-Mart is Tesco’s largest global
smartphones intersect with investment competitor and therefore has the
in6/28/2022
multimedia streaming services necessary skills, resources, experience
63 63
and funds to cause Tesco problems
A PESTLE Analysis of Tesco moving
into South Africa
6/28/2022 64
Political Factors
• Corporate tax rate is currently 28% of taxable
income.
• Foreign companies not subjected to 15%
dividend withholding tax.
• No further tax payable on the remittance of
South African branch profits offshore.
• Capital gains tax is an effective rate of 18,6%.
6/28/2022 65 65
Economic Factors
• The South African exchange rate is weak
mainly as a result of political instability.
• South Africa’s investment grade credit ratings
was recently downgraded due to slow
economic growth.
• Competition with Shoprite – South Africa’s
leading low price retailer.
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Social Factors
• Low consumer confidence.
• Slowdown in household credit extension.
• Lost income due to strikes.
• Therefore, at present, grocery retail trading
conditions are expected to remain challenging
and experience low growth.
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Technological Factors
• Large retailers such as Pick n Pay and
Woolworths are only focusing on core-retail
solutions and cost effective operations.
• If Tesco employs advanced in-store/mobile
technologies they can have a competitive
advantage over the existing retailers.
6/28/2022 68 68
Legal Factors
• Tesco would be granted its own legal status due to its
need to register as an external; it is not however
separate legal status except in matter of exchange
control. The branch does obtain a South African
registration number.
• Need to comply with requirements of laws such as the
Basic Conditions of Employment Act 2002.
6/28/2022 69 69
Environmental Factors
• Tesco needs to choose a location that has sufficient
water supply to ensure operations run smoothly.
• South Africa’s energy crisis requires Tesco to consider
investing in Green Solutions.
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PESTLE and SWOT ANALYSIS
CONCLUSION
• Important tool in strategic decision making.
• Tesco needs to consider the above-
mentioned factors if they want to establish
retail stores in South Africa.
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PESTLE ANALYSIS CONCLUSION
• Important tool in strategic decision making.
• Tesco needs to consider the above-
mentioned factors if they want to establish
retail stores in South Africa.
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DECISION MAKING
PEST(LE) Analysis
SWOT ANALYSIS
De Bono’s (Hats)
6/28/2022 73
THIS SESSION WILL BE EASIER TO UNDERSTAND
IF YOU READ CAREFULLY THROUGH THESE
SLIDESIN YOUR OWN TIME AND GET TO
UNDERSTAND THE USE OF THIS TECHNIQUE
Cost / Benefit Analysis

DECISION MAKING
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Cost Benefit Analysis (CBA)
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CBA - Definition
A monetary or safety valuation of the risk

(cost) of performing a task vs the expected
benefit of performing the task.
Value for Money
6/28/2022 76 76
• Cost benefit analysis is a process used
primarily by businesses that weighs the
sum of the benefits, such as financial gain,
of an action against the negatives, or costs,
of that action.
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Cost Benefit Analysis or ROI
• The technique is often used when trying to
decide a course of action, and often
incorporates monetary amounts for
intangible benefits as well as opportunity
cost into its calculations.
6/28/2022 78 78
CBA - Overview
• CBA is similar to Return on Investment (ROI)
• Includes safety/risk analysis.
• Tasks/projects are selected based overall cost
(and risk) vs benefit.
• Although CBA can be used for short-term
decisions, it is most often used when a
company or individual has a long-term
decision.
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• As a Business Analyst, one would need to get an
accurate estimate of the benefits that your
proposed solutions will deliver, as well as how
much they cost.
• The final solution should return the greatest
benefit for the cost that it has incurred.
• CBA cannot easily take into account intangible
factors. (eg Saving Time)
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• CBA is an easy tool to determine which
potential decision would make the most
financial sense for the business or
individual.
• The process can also take indirect benefits
or costs into consideration, like customer
satisfaction or even employee morale.
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• Opportunity cost often plays a big role
when deciding between several options.
• When listing potential costs and benefits,
companies or analysts will often factor in
things like labour costs, social benefits and
other factors that may not be immediately
obvious.
• CBA is similar to net present value (or NPV),
which is often used by investors.
6/28/2022 82 82
Cost Benefit Analysis vs Net Present
Value
• When performing a cost benefit analysis, or
CBA, it is generally helpful to weigh
the total benefits and total costs of a future
project at their present value - which is
where net present value comes in.
• In CBA, net present value is used to
calculate net present costs and net present
benefits.
6/28/2022 83 83
Value
• CBAs are often done with a long-term view
in mind, the value of money often changes
due to inflation and other factors.
• Therefore, it is helpful to factor in the net
present value of the figures you are
analyzing when conducting a CBA.
6/28/2022 84 84
Value
• Net Present Value is a method used to
determine the benefits of undertaking an
investment by calculating the future
benefits or costs in terms of their present
value.
• NPV
https://corporatefinanceinstitute.com/resources/knowledge/
valuation/net-present-value-npv/
6/28/2022 85 85
6/28/2022 86
NPV - Formula
NPV Formula
NPVxyz = Z1 /(1+r) + Z2 /(1+ r)2 – X0
Where:
– Z1 = Cash flow in time 1
– Z2 = Cash flow in time 2
– r = Discount rate
– X0 = Cash outflow in time 0
• (i.e. the purchase price / initial investment)
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Value
• If the NPV is positive for the calculation
– (meaning the benefits outweigh the costs),
• the action or decision will generally be a
good investment.
• If negative, the opposite is likely true.
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How to Calculate Cost Benefit Analysis
For standard CBA, the formula, the

benefit/cost ratio, is fairly simple:
Benefit/cost,
OR
b/c.
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• While there are slightly more complex

formulas, the benefit-cost ratio is
essentially just taking into account all of the
direct or indirect costs and benefits and
seeing if one outweighs the other.
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• The formula reflects the sum of all the

benefits divided by the sum of all the costs,
with consideration for the duration of the
decision or action (or, analysis horizon).
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CBA – STEP 1: Compile Lists
• The first thing to do when running a cost
benefit analysis is to compile a
comprehensive list of all the costs and
benefits associated with the potential
action or decision.
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• Consider not only the obvious costs, but
also possible intangible costs like the
opportunity cost of picking one software
over another, or over another option like
hiring a new employee.
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• Also consider all the possible benefits of

the decision –
– how much might it add to your revenue?
• What other benefits may be inherent in
the action that would make it outweigh
the costs?
6/28/2022 94 94
• For example,
– would a new software improve efficiency or
capabilities that could promote new
business or make current operations run
smoother?
• Be sure to also consider intangible
benefits as well as obvious, financial
ones.
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Step 2:
Give the costs & benefits a monetary value
• Once you have two comprehensive lists of

costs and benefits for the action, assign
monetary values to each individual cost or
benefit.
• For some, the values will be obvious - like
the cost of installing the software might be
R15000.
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Step 2:
Give the costs and benefits a monetary value
• It is also important to try to assign monetary
values to direct or indirect and tangible and
intangible costs or benefits if possible.
• For example,
– Installing a new software may render an employee's
computer inaccessible for a couple hours, costing that
employee working time or productivity and therefore
money generated for the company.
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Step 2:
Give the costs and benefits a monetary value
• Once you assign monetary values for each

cost and benefit, add all the costs and
benefits respectively and set up the
equation.
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Step 3: Set up the equation & compare
• Take the sum of the benefits

– (the sum of all the monetary values assigned to
the benefits of the action) and
• The sum of the costs
– (all the monetary values of the costs of the action)
• and plug them into the b/c equation.
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Step 3: Set up the equation & compare
• The equation should be a numerical

equation.
• If the sum of the benfits outweigh the
costs, it is advisable to proceed with the
decision.
• If not, the company or individual should re-
examine the potential action and make
adjustments accordingly.
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Step 3: Set up the equation and
compare
• This equation can also be set up for
multiple different options or projects and
can help companies compare options side
by side.
• But, what are some actual examples of
CBA?
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Return on Investment (ROI)
ROI Formula
• There are several versions of the ROI
formula. The two most commonly used are
shown below:
• ROI = Net Income / Cost of Investment
or
• ROI = Investment Gain / Investment Base
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Syndicate work
• Using the Issues that you have already
identified and Prioritised, use the PEST(LE)
and SWOT Analysis decision making
techniques to help you to verify which of
the issues really should be considered.
• Show the workings.
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Decision Making
• Once more – you should consider combining
these techniques, as they all work well
together.
• The Cost Benefit Analysis is tricky without the
Users,
• Practice the PEST(LE) and the SWOT together.
6/28/2022 104 104

DECISION MAKING
DE BONO - SIX THINKING HATS
BUSINESS IMPROVEMENT USING BML
105
Section Objectives
• Select processes to model
• Apply profiles of non value added vs. value
added analysis to model
• Use analysis to generate actionable findings
106 106
What is lateral thinking?
• Lateral Thinking is closely related to insight,
creativity and humour.
• A deliberate process and is a way of using

the mind logically!
– BUT in a different way
107 107
Vertical thinking
• Vertical thinking selects a pathway by
excluding other pathways.
• One selects the most promising approach

to a problem, the best way at looking at a
situation.
108 108
Lateral thinking
• Does not select, but seeks to open up other
pathways.
• Many alternative approaches are
generated.
• Even after a promising approach is found –
more approaches are still generated.
109 109
Parallel Thinking
• Parallel thinking helps to facilitate lateral
thinking.
• This can be done by using the technique,

developed by de Bono, called the SIX
THINKING HATS.
110 110
Parallel Thinking
111 111
Six Thinking Hats
112 112
Six Thinking Hats
• Group technique
–Everybody is encouraged to think
• About the same thing
• From the same aspect all
• At the same time.
113 113
Six Thinking Hats
• Used to look at decisions from a number of
important perspectives
• Forces you to move outside of your habitual
thinking style
• Colour of each hat relates to a different
mode of thinking.
114 114
White hat
• About information
- “What information do we have?”
- “What information do we need?”
• Concerned with objective facts & figures
• Objective & neutral
115 115
White hat
• What information is missing?
• What questions do we need to ask?
• How are we going to get the information
that we need?
116 116
White Hat
• Checked facts
– Like a school boy emptying his pockets of
some coins, some chewing gum and a frog!
• Unchecked facts
– Somebody’s opinion, something that you
believe to be a fact!
117 117
Red Hat
• Legitimises feelings & emotions as an
important part of thinking
• Intuition & hunches
• Allows the thinker to say:
“This is how I feel about the matter”
118 118
Red Hat
• The opportunity to express feelings,
emotions and intuition with no need to
explain or justify them.
– “I feel that this is the right person for the job”
– “I feel that this is a risky venture”
– “My intuition tells me that this explanation is
to complex/simple!”
119 119
Red Hat
• Should always be done on an individual
basis.
–Fear and dislike – suspicion!
–Hunch, intuition, sense, taste, aesthetic
feeling.
120 120
Red Hat
• Convenient for the thinker to switch in
and out of feeling mode.
• Explore the feelings of other by asking for
a red hat view.
121 121
Black Hat
• ‘survival’ hat
• Points out the weaknesses or cautions in
an idea.
• Cautious & Careful (identifies risks,
avoids dangers, looks for potential
problems)
• Always logical
122 122
Black Hat
• Most used and the most important hat.
• Stops us doing things that are illegal,
dangerous, unprofitable, polluting etc
– Does this suggestion “fit” our experience/
resources/ ethics/ values?
• (This is NOT a negative hat, and is very

necessary in the thinking process)
123 123
Black Hat
• Black hat thinking is not argument and
should not be allowed to degenerate into
argument.
• It is important not to abuse or overuse the
black hat.
124 124
Yellow Hat
• Positive & constructive
– Optimistic & covers hope & positive thinking
• Seeks value (benefits)

• Harder to wear than a black hat
• Aim is effectiveness, not new ideas
• Used to make things happen
125 125
Yellow Hat
• Things that did not seem interesting might
suddenly have a high value.
• Should be logically based.
• Reason for putting the idea forward.
126 126
Yellow Hat
• Judgement hat and not based on fantasy
– What are the values?
– For whom?
– Under what circumstances
– How are the values delivered?
– What other values are there?
127 127
Green Hat
• Creative
• The energy hat.
• NEW ideas & alternatives
- “We could do this, or this, or this …”
128 128
Green Hat
• Options and alternatives
• Modify and improve suggested ideas.
• Put forward possibilities.
• Provocation is an important part of green
hat thinking.
129 129
Blue Hat
• Control hat
• Organises the other hats
• Management of thinking.
• Sets the focus
• Responsible for overviews, summaries and
conclusions
130 130
Blue Hat
• Conductor of the orchestra or the
ringmaster of a circus!
• Monitors the thinking & ensures that the
rules of the game are observed.
131 131
Association between the Hats
• Information Source
• (Red & White)
• Information Analysis
• (Yellow & Black)
• Information Organisation
• (Blue & Green)
132 132
Summary of Hats
• White - facts, information

• Red – emotions, feelings, hunches
• Black – look for potential problems or
risks, weaknesses
• Yellow – positive, advantages, benefits
• Green – creative, new ideas
• Blue – organises the thinking
133 133
Key issues to keep in mind
• Hats are not categories of
people!!
– They give directions NOT descriptions
– They can be put on and taken off with ease
– Black hat IS NOT A bad hat
134 134
Key issues to keep in mind
• It is important to participate in the game
• The intelligence, experience and knowledge

of all the members of the group are fully
used.
135 135
Advantages – Four broad categories
1. Power
By using entire group’s knowledge and expertise,
gets everyone working in the same direction
2. Time saving
Normal thinking – someone says something and
you respond,
Parallel thinking – just add a thought alongside the
other person’s
136 136
Advantages – Four broad categories
3. Removal of Ego
Normal thinking can be used to get your own way or show
how “clever” you are.
This technique provides neutral & objective exploration of
a subject
4. One thing at a time

Time to look for ideas, time to look for info… avoids
confusion
137 137
Benefits
• Decisions seem to make themselves.
• Easier to choose the best road.
• When not possible to make a decision then
the final blue hat can define a new thinking
focus for a new session.
• If no choice can be made, then the final
decisions should be red hat decisions.
138 138
Summary
• Simplifies thinking - deals with one thing at a
time
• Enables a switch in thinking
• Looks at the affects of a decision from more
than one point of view
• Allows necessary emotion and scepticism to
be brought into what would otherwise be
purely rational decisions
139 139
IDENTIFYING PROCESSES
6/28/2022 140
Cost benefit
Cause & Effect

SWOT Analysis
Diagrams
5 Why’s & Check

De Bono’s (Hats)
Sheets
6/28/2022 141

Dimension
Analysis (Again)

RADAR Charts
Rhombus of
Change
6/28/2022 142
4. Process Identification
Process Modelling & Dimension
Analysis
Flowcharting
SIPOC DIAGRAMS
6/28/2022 143
Process Identification
▪“When a Problem comes along, study it

until you are completely knowledgeable.
Then find that weak spot, break the
problem apart, and the rest will be easy.”
▪ Norman Vincent Peale
6/28/2022 144 144

Process Identification
▪ The BUSINESS PROBLEMS or ISSUIES are normally
identified at the high level FUNCTIONS in the
Business. The TOP ROW of the W5 Model.
▪ The PROCESSES are found in the LOWER LEVELS
of a WHAT Model.
▪ This is what we will be interrogating now. We will
be finding WHAT process(es) might be causing the
ISSUES (Often on the CAUSE and EFFECT Diagram)
6/28/2022 145 145
PROCESS Modelling

IDENTIFYING PROCESSES – PROCESS MODELLING
6/28/2022 146
Process Modelling
▪ Much of this has already been done having carried
out the W5 Approach.
▪ The lower level activities in the WHAT model and
the lower level HOW models are a good start.
▪ Other useful techniques that can help to
understand the process are:-
▪ Flowcharts
▪ SIPOC Diagrams
6/28/2022 147 147

HOW model
• The BML approach to Process Modelling is a very
good start for identifying processes that need to be
improved.
• A Business Analyst should ALWAYS use an “As Is” or
“Current State Model” to help with the
identification of processes that can be improved.
• The rest of the process improvement tools are based
on Process Modelling.
• HOW model in the BML
6/28/2022 148 148
HOW Model from BML
• The HOW MODEL is the very first process flow that
you should consider when identifying processes to
improve.
– Check the HOW MODEL of the FUNCTION
(LEG) that you have identified as an ISSUE.
• The HOW MODEL will also be the model that gets
amended or updated once the new proposed process
improvement has been agreed upon.
6/28/2022 149 149

Techniques to help with
Communication
A brief reminder that all of these
modelling techniques are used to
support the Business Analyst to
communicate with the SME’s and to
ensure a clear understanding between
the Analyst and the SME’s.
6/28/2022 150 150

HOW Model from BML
• Once you have identified the Problem (stage 1), then you
would go to the WHAT model and drill down to the lower
level WHAT’s that make up that process.
• There might be one of more of the lower level WHAT’s
that are responsible for the higher level problem, thus
identifying the PROCESSES that are causing the problem.
• These can then be traced to the HOW model, and the
Process Improvement techniques (to follow) will be used
to help with a solution.
• DISCUSSION at this point!!!
6/28/2022 151 151
Process Identification- EXAMPLE
152 152
DISCUSS the Value of the WHAT and
HOW
• This is relevant now to discuss the value of
the WHAT and the HOW models.
• Also the ATOMS… which are in fact each
HOW model process.
• The causes of the problems can easily be
isolated by looking at these models, having
discovered earlier what the MAIN Business
Problem is.
6/28/2022 153 153
Syndicate Work
• Choose TWO of your BUSINESS PROBLEM ISSUES
that you identified earlier.
• Make sure that your W5 model is fully populated
with the WHO, WHICH etc
• Do a HOW model of the BUSINESS PROBLEM
FUNCTION and interrogate the outcome.
• Run a DIMENSION ANALYSIS of that LEG as well to
help with your investigation.
• LOOK for what might be causing the issues.
6/28/2022 154 154
Syndicate Work
• Check to see whether your ROOT CAUSE
ANALYSIS has also influenced your findings?
6/28/2022 155 155

Flowcharting
https://slidemodel.com/how-to-make-a-flowchart/
BUSINESS PROCESS ANALYSIS
6/28/2022 156
Flowcharting
• Diagrams that illustrate the sequence of operations
performed to get to the solution.
• Similar to a How Model, but can be more procedure
oriented. (One might start with a WHAT dimension)
• Also known as Process Charts or Process Maps.
• Established during the 1920’s and have been used
extensively for many years.
• This was always the starting point for computer
programmers, but is widely used for business process
mapping as well.
6/28/2022 157 157

Flowcharting
• Provides a snap shot of any business process
that is being analysed for improvement
opportunities.
• Can clearly show badly organised flows.
• Highlights problem areas where no “business”
procedure exists to cope with a particular set
of events.
6/28/2022 158 158

Flowcharting
• Can give a detailed understanding of a process prior
to any improvement efforts.
• Allows the Analyst and the SME to see the process
flow at a glance.
• It is a good whiteboard technique to use with your
SME’s to ask them to spell out the exact procedure
of a process.
• An EXCELLENT COMMUNICATION TOOL.
6/28/2022 159 159

6/28/2022 160
6/28/2022 161
Flowcharting
• Usually drawn using a set of standard symbols.
• Four basic flowchart symbols:-
– Start/ End
– Process/task
– Decision
– Flow of Control
6/28/2022 162 162

Flowchart Symbols & Meaning
6/28/2022 163
Flowcharting – Class Exercise
• You are required to draw a flowchart for the
example on the following slide.
• See whether you can find any anomalies and
use this to help you to “ask the SME” the right
questions regarding what happens.
• Check for any missing flows or anything extra.
6/28/2022 164 164

Flowcharting – Exercise –
New hire recruitment (PAGE 1)
• Vacancies are advertised on the company web site
• Applications are received by post and processed
by Jane and her team.
• Each application is forwarded to the Store
Manager
• Store managers shortlist applications for interview
• Shortlisted candidates are invited for interview
CONTINUED………
6/28/2022 165 165
Flowcharting – Exercise (Continued)
• New hire recruitment….. continued
– Shortlisted candidates are interviewed by Store
Manager.
– Successful candidate(s) are offered position
– Successful candidate(s) accepts position
– Recruitment Manager draws up work contract
– Candidate signs work contract
– Candidate starts work.
6/28/2022 166 166
SIPOC Diagrams

6/28/2022 167
SIPOC DIAGRAMS
• SIPOC DIAGRAMS are a good way to identify all
of the relevant elements of a higher level
business process.
– Suppliers
– Inputs
– Processes
– Outputs
– Customers
6/28/2022 168 168
SIPOC DIAGRAMS
• SIPOC DIAGRAMS also called high level process
maps.
• Used commonly in Six Sigma to show only the
major steps of the methodology.
• Helps BA’s to visualise the five key components
of a process.
• Should be used to describe the “as is” or current
state process, and not the “to be” or future
state process.
6/28/2022 169 169

SIPOC DIAGRAMS
• Should only be used to help describe
existing processes “current state” and
should not really be used to describe the
Future State.
• Very similar to using the W5 Approach –
identifying all of the different aspects of a
process.
• This technique can be used to help draw up
the WHAT model.
6/28/2022 170 170
SIPOC DIAGRAM
Suppliers Inputs Process Outputs Customer
Step 5 Step 4 Step 1 Step 2 Step 3

Identify Identify Identify Identify Identify
the the the the the
Suppliers Inputs Process Outputs Customer
6/28/2022 171
Define Business Need
Group Exercise
• Work in your assignment teams.
• Use your outcomes of one or two of the
problems that you have decided to address.
• Use the Process Identification Techniques
discussed above to identify the actual processes
which could be causing the problems.
• Identify the reasons if possible.
• Use a flip chart, to show your workings and
explanations.
6/28/2022 172 172

Cost benefit
Cause & Effect

SWOT Analysis
Diagrams
5 Why’s & Check

De Bono’s (Hats)
Sheets
6/28/2022 173

Dimension
Analysis (Again)

RADAR Charts
Rhombus of
Change
6/28/2022 174
Cost Benefit Analysis, ROI and
Opportunity Costs
• https://www.thestreet.com/personal-
finance/education/cost-benefit-analysis-14878947
• https://corporatefinanceinstitute.com/resources/kno
wledge/finance/return-on-investment-roi-formula/
• https://www.thestreet.com/personal-
finance/opportunity-cost-14648358
• https://www.business-case-analysis.com/cost-
benefit-analysis.html
6/28/2022 175 175

WEBSITES
• https://www.business-case-analysis.com/
• https://managementstudyguide.com/strategic-
management.htm
• https://www.managementstudyguide.com/all-
subjects.htm
• https://www.managementstudyguide.com/business-
process-improvement-articles.htm
• https://www.managementstudyguide.com
6/28/2022 176 176

Some Interesting Videos
https://www.youtube.com/watch?v=GI7lZCGTYsA (4 Mins)
Part 1: Agile, Lean, DevOps, Kanban, ATD, BDD, Cynefin – the New World for Business Analysts
https://www.youtube.com/watch?v=TRwwlrB23HU (13 Mins)

Part 2: Business Analysis Techniques Used by the Strategic Business Analyst
https://www.youtube.com/watch?v=6MINge6wQu4 (7.5 Mins)

Part 3: Business Analysis Techniques Used by the Tactical Business Analyst
https://www.youtube.com/watch?v=KeE5EaEgx7s (5.5 Mins)

Part 4: Business Analysis Techniques Used by the Operational Business Analyst
https://www.youtube.com/watch?v=hbVQ0q4k-jI (3.5 Mins)

Part 5: When Do You Do Business Analysis in Agile Projects
https://www.youtube.com/watch?v=P2KX6FSHoMA (7.5 Mins)

Part 6: The Now and Future Business Analyst Profession
6/28/2022 177 177

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PDBA: MODULE 3

Identify the Resource Improvement

Issue Analysis Value Analysis PEST(LE) Analysis

Cause & Effect

5 Why’s & Check

Process SREDIM Capacity Performance

SIPOC DIAGRAMS Cycle Time Improvement

Create New Create Current

Conduct Gap Create Future

• The role of the Business Analyst

• Process Improvement Checklist

Decide which Problems & Issues to solve

Issue Analysis Value Analysis PEST(LE) Analysis

Cause & Effect

5 Why’s & Check

Flowcharting Cycle Time Capacity

Identify the Resource Improvement

Cost Benefit Analysis

• The PESTLE factors can be categorized in the

• Introducing a new product/service.

Decide which Resource Improvement

Issue Analysis Value Analysis PEST(LE) Analysis

Dimension Analysis Pareto Analysis SWOT Analysis

Cause & Effect Cost benefit

5 Why’s & Check

Cost Benefit Analysis

❖ PATENTS ❖ GAP IN CAPABILITIES

❖ NEW TECHNOLOGIES ❖ NEW RULES FROM REGULATORY

• PLEASE GO THROUGH THESE SLIDES ON YOUR

Cost Benefit Analysis

Cost / Benefit Analysis

A monetary or safety valuation of the risk

Value for Money

For standard CBA, the formula, the

• While there are slightly more complex

• The formula reflects the sum of all the

• Also consider all the possible benefits of

• Once you have two comprehensive lists of

• Once you assign monetary values for each

• Take the sum of the benefits

• The equation should be a numerical

6/28/2022 101 101

6/28/2022 102 102

6/28/2022 103 103

6/28/2022 104 104

• A deliberate process and is a way of using

• One selects the most promising approach

• This can be done by using the technique,

• (This is NOT a negative hat, and is very

• Seeks value (benefits)

• White - facts, information

• The intelligence, experience and knowledge

4. One thing at a time

Issue Analysis Value Analysis PEST(LE) Analysis

Cause & Effect

5 Why’s & Check

Process SREDIM Capacity Performance

SIPOC DIAGRAMS Cycle Time Improvement

▪“When a Problem comes along, study it

6/28/2022 144 144

BUSINESS IMPROVEMENT TECHNIQUES

6/28/2022 147 147

6/28/2022 149 149

6/28/2022 150 150