In many cases organisational change is initiated when an internal stakeholder raises a problem or concern which is perceived to be urgent. These types of problems are often tangible and emotive, which leads to an understandable pressure for swift decision making. Imagine a manager of a call centre struggling to cope due to an unexpected spike in demand—they are likely to be under pressure to get the issue resolved now and they will very likely press for an early decision to be made over the ‘solution’. After all, they have customers complaining to them, and they have senior managers on their back asking them how they plan to resolve the issue. There will be immense pressure to find an answer, a ‘silver bullet’ to resolve the issues.
This pressure for an early solution is understandable, but dangerous. When changes are initiated without an adequate understanding of the business context and the problem there is a significant risk that what is delivered won’t achieve the desired outcomes. In some cases it might even make the situation worse for one or many stakeholder groups. At best it will lead to an incremental change to the existing processes and information systems, and it will typically be too internally focused.
The busy call centre manager might, for example, argue that they need a new telephone system which allows smarter call routing and gives them better management information to support planning. This is a logical step from where they are, and it might be a useful solution—but is it the only one? More importantly, has it got to the root of why there was a sudden peak in demand? Sadly not… and as many customers will tell you, the last thing they want is an ‘advanced’ telephone system with hundreds of menu options. They just want their query resolved. A more pragmatic approach would be to balance the internal and external perspectives.
This is an area where business analysis can make a huge difference. PESTLE is a practical and often overlooked technique for examining the external environment that encourages analysis of the external Political, Economic, Socio-cultural, Technological, Legal and Environmental factors. There is sometimes a perception that this technique can only be used for organisation-wide strategic discussions. It is certainly true that it can be used at this level but it also has practical uses at a project and programme level too.
Building on the call centre example, a PESTLE analysis might uncover an increasing trend and desire for customers to self-serve online (socio-cultural), the increasing availability of technology that enables customers to do this (technological) alongside a legal and ethical imperative to provide options for those that can’t use web-based technology (legal). This can then be combined with a general examination of the internal business context and a root cause analysis (to find out why so many people are phoning) to provide a much clearer picture of what is both feasible and desirable.
This leads to divergent thinking techniques such as brainstorming, allowing the business analyst to continue to collaborate with stakeholders to imagine different ways of improving the business situation. A new phone system might be one option, an online self-service portal might be another, completely redesigning the processes so a customer doesn’t need to make contact at all might be a radical but favoured option. Having looked outwards as well as inwards, the types of options generated go far beyond the incremental improvements that might have otherwise been considered. A bigger universe of options to choose from is now available, and the chosen option is more valuable than the initial knee-jerk assumption.
Keep Looking Throughout The Business Change Lifecycle
Focus is often put on this type of analysis early in the business change lifecycle, but it would be foolhardy to ignore it during the later stages. Techniques like PESTLE ought to be revisited regularly to see what external influences are changing and emerging. The world changes at a fast pace and situations can arise where what was planned is no longer relevant or needs to change significantly. I’m sure many business analysts have worked in organisations where recent data protection law changes seemed to come as a surprise. In some cases this may have led to significant disruption to project activity. Yet information about these laws had been available for years. This is an example of something that would have initially surfaced in the ‘P’ in PESTLE (governments indicating they plan to legislate) and then ‘L’ (legislation being formalised).
As well as factors that constrain, external opportunities can also be found in PESTLE. Technology is moving at a fast pace, and many projects will involve the implementation, change or configuration of digital technologies. Technology is only one part of the holistic view, of course, but keeping an eye out for technologies that might help the business is an important BA contribution. This is an area where there is additional scope for collaboration as it brings together the worlds of users, architects, analysts and other stakeholders too.
In summary: balancing the outward and internal perspectives is key, and PESTLE (alongside other tools) is a firm favourite within the BA toolkit.
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