Early warning scans are used to detect or predict important events as early as possible. They may be used to understand where competitors are likely to attack the business from and assess the probability that a given scenario will happen.
Business analysts may use early warning scans as an intuitive technique for systematically and regularly tracking major assumptions about competitors and the task environment into the future with the aim of informing decision-makers when situations change in a possibly risky and significant way.
Competitive firms, especially those that function across vibrant markets and have a multi-national outlook need to implement this technique. Crucially, business analysts are mandated to anticipate and prevent possibly substantial antagonistic marketplace surprises or movements by connecting evidence collected from quantities of data using the early warning scans technique.
According to experts, there are four sources of signals that can benefit organisations:
(1) From the present external world, (2) From the projected external future, (3) From the internal processes of the organisation, and (4) From internal factors that may impact the organisation in the future as depicted in the diagram below:
Implementing the early warning scans in business is often difficult since consistent market-linked issues are discussed instead of looming events.
The business analyst is therefore tasked with developing a usable methodology in this discipline that will aid in enhancement of their calculations hence, offering forecasts which are more robust. There are seven significant components of an early warning scan system that should be considered when defining a business strategy:
· Market definition: This involves clearly defining the scope of the field to be analysed. For instance, a particular market, brand, or location
· Open systems: The capability of seizing huge amounts of information on important rivals
· Filtering: This involves prioritising the information collected from the field based on their significance or relevance. It is important to be able to expertly interpret information in order to detect specific events that denote strategic shifts.
· Predictive intelligence: Understanding the driving forces of a competitor so as to be able to envisage the direction they will possibly take. For instance, a business analyst may build possible scenarios and keenly pursue the indications that sanction the scenario.
· Communicating intelligence: Confirming that the relevant people are regularly briefed on important signals in the organisation
· Contingency planning: Establishing contingency plans for occasions that have a high possibility of occurring or high potential impact.
· A cyclical process: The practise of assessing evidence for new warning signals should always continue while laying emphasis on emerging opportunities and threats. Additionally, the practise should be flexible in order to confront unforeseen short-term developments.