Strategy Analysis: From Current State to Change Strategy
Strategy Analysis examines how the enterprise moves from where it is to where it needs to be. BABOK Guide v3 defines four tasks: Analyze Current State, Define Future State, Assess Risks, and Define Change Strategy. Expect questions on the difference between goals and objectives, gap analysis, risk tolerance, solution scope, and transition states.
Core rules
- Analyze Current State establishes the business need and the internal and external context: capabilities, processes, technology, structure, and constraints. Root cause analysis keeps you from solving the wrong problem.
- Define Future State sets business goals and business objectives - measurable and time-bound - plus the scope of the solution space and its constraints. Future state describes outcomes, not a product design.
- Assess Risks identifies and evaluates risks against the enterprise's risk tolerance, that is, how much uncertainty it will accept.
- Define Change Strategy compares current and future states (gap analysis), determines solution scope, sequences transition states, and sets out the change strategy and business case.
Worked example
An online retailer has high return-related contact volume. Current state shows returns can only be processed in store. Future state objectives are a 40% reduction in returns contacts and refunds within two days. The gap: no self-service return portal and no reverse-logistics integration. Risks include fraud, carrier capacity, and low digital adoption among older customers. The change strategy covers a single-region pilot, then national rollout as two transition states; solution scope includes the portal and carrier integration but excludes in-store returns, which remain unchanged. The reasoning: the gap determines scope, the transition states manage risk, and the objectives carry measures and timeframes.
Traps that cost marks
- Writing the future state as a solution design or a feature list.
- Stating goals without measures, timeframes, or baselines.
- Ignoring the do-nothing option and the business case behind change strategy.
- Confusing gap analysis with solution design - the gap explains why change is needed, not how to build it.
- Skipping transition states, which leave both the origin and destination and the route between them undefined.