Business analysis and options appraisal
Business Analyst Team
If your project contains any system elements you will need to contact the Business Analyst team during Stage 1: Initiation and scoping of your project planning. This early contact will help you to establish potential approaches and will ensure synergies with other systems are considered.
You will need to consult with the Business Analyst Team again once the project mandate has been approved and you have begun Stage 2: Planning and defining the design and approach in order to further explore options appraisals and identify the preferred solution.
The Business Analyst Team can give advice, and in some cases provide support, on the following areas:
- options appraisals
- process review/improvement
- gap/impact analysis
- requirement elicitation/analysis/modelling
- workshop Facilitation
- authoring requirements specification
- planning, coordination and support user acceptance testing (UAT)
- assist with work stream planning
- stakeholder management (in addition to, not instead of Project Managers)
- act as a bridge between IT and the ‘Business’/University
If you need Business Analyst support for your project, you will need to ensure they are added as an allocated resource as part of your project Business Case.
What is an options appraisal?
An options appraisal is described as “The process of defining objectives, examining options and weighing up the costs, benefits, risks and uncertainties of those options before a decision is made.”
Basically, it is what options have been considered and which should be chosen… not forgetting the ‘do nothing’ option.
The options appraisal should be carried out in consultation with the Business Analysts, as part of developing the Project Mandate. As part of the mandate we are asked to identify and explain what the issue, or opportunity is that we think the project will address. It’s rare that there will only ever be one solution to this though, particularly if you factor in the ‘do nothing’ option.
Why do you need to do it?
An options appraisal looks at various factors, including the need for change, strategic context, appropriate risks, value for money (including lifecycle costs (.pdf), impacts and benefits and required outcomes, and enables you to fairly compare each option against the same set of criteria, in order to determine the best or preferred option.
By evaluating the options in more detail in this way, it shows that the project has explored a range of options in enough detail to fully understand the associated high level risks, benefits and costs of each one, and therefore is fully informed to be able to make a confident recommendation.
How is it done?
You may start out with a wide range of options and need to do research to get down to a shorter list, or there may only be a few options to begin with. Either way there is a simple process to follow.
- establish the strategic need
- establish the resources available
- define the key outcomes and objectives (objectives should be SMART: Specific, Measurable, Agreed, Realistic, and Time bound)
- establish a ‘do minimum’ or ‘baseline’ position
- review the tolerance for risk
- develop criteria for long and short list of options
- identify the options
- gather information and create a short list of options
- fully evaluate the short list of options
- identify preferred option
As part of the evaluation of the options, you will need to undertake a range of different activities which will act as supporting evidence to inform the evaluation. This will vary from project to project, however it could include:
- consultation with experts in the field, either internally or externally
- talking to similar institutions, either face to face or on forums dedicated to the subject matter
- getting quotes from suppliers
- financial advice, including engagement with the Finance Section
- business advice, including engagement with the Business Analysts
Tools
There are tools to help with the evaluation of each option.
PESTLE and SWOT analysis can help define the pros and cons of each option. PESTLE will help to evaluate the various environmental factors; the findings of this can then be used to help complete a SWOT analysis, which looks at the strengths, weaknesses, opportunities and threats of each of the options.
PESTLE
Political
- Government policy
- General elections
- Referendums
- Political instability
- Changes to policies or laws
Economic
- Economic growth
- Interest and exchange rates
- Inflation
Social
- Population growth
- Age distribution
- Health awareness
- Career attitudes
Technological
- New ways of producing goods and services
- New ways of distributing goods and services
- New ways of communicating with target markets
Environmental
- Raw materials
- Pollution targets
- Ethics and sustainability
- Carbon footprints
- Safeguarded land
- Recycling
Legal
- Health and safety
- Equal opportunities
- Advertising standards
- Consumer rights and laws
- Product safety
SWOT analysis
Strengths
For example:
- customer service/support
- flexibility
- dedicated, enthusiastic staff
- web development services
Weaknesses
For example:
- staff levels
- funding model
- lack of strategic planning
- lack of service level agreements
Opportunities
For example:
- economies of scale
- cloud computing
- integration of systems
- wireless
Threats
For example:
- accelerated expectations vs capacity
- inconsistencies in keeping up
- more devices to support
Options appraisal grid
Once you have identified your short list of options, and begun to evaluate them, you need to record your findings. There are various ways to do this, depending on the complexity of your project and the number of options you are evaluating. A very simple grid could be used, such as this one:
| Option | Benefit | Risk | Cost £ |
| 0 - Do nothing | |||
| 1 - Modest change | |||
| 2 - Significant change | |||
| 3 - Full transformational change |
Or you could use a more substantial grid, which allows for more thorough evaluation of how each option also meets the objectives of the project.
| Issue/output | Option 1 | Option 2 | Option 3 |
| Strategic fit | |||
| Benefits | |||
| Risks | |||
| Impact | |||
| Key objective(s) | |||
| Costs £ (including lifecycle / ongoing costs) |
The final reporting, to be included in the mandate or business case, should clearly identify the preferred option that you think should be taken, and how that conclusion has been reached.
Contacts and further information
For further information about conducting an options appraisal as part of your project please contact one of the Business Analysts or the Strategic Projects Office at change@essex.ac.uk.
- Elaine Atkins, Business Analyst and Support Manager
