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Briefing 2

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Managing Change for Health Information Professionals (MCHIP)  


Briefing Paper #2  

 June 2004


STEP and PEST analysis



A common tool in planning for change is to analyse the environment using the  STEP or PEST formula:


  • Sociological trends

  • Technological innovations

  • Economic influences

  • Political factors


All organisations exist in an environment, not in isolation. This is just as true for LIS facilities. The organisation interacts with its environment in many complex ways, with influences flowing both ways. Another approach is to view the environment as a collection of stakeholders, all of whom have some interest in the service it provides. Stakeholders include those who work in the organisation, those who use its services, those who provide resources it uses (for libraries this might include the producers of databases, journal publishing houses etc), those who commission its services and those who fund it. We will come back to stakeholders in Message 8.


Environmental analysis may however be problematic, because:

  • The environment may be huge and hard to categorise (healthcare and LIS  are both vast fields: it may be necessary to focus in on the national or even local situation).

  • In times of rapid change, it maybe hard to tease out which innovations are just happening in the background and which will impinge directly on your organisation.

  • People tend to concentrate on issues they have some experience of managing already, or which traditionally “matter” to their organisation, whereas in periods of rapid change, some more imaginative approaches may be needed.



STEP analyses typically cover the following broad areas:


Sociological: includes cultural  and demographic issues like changes in the population structure; income distribution and income inequality; social mobility; changing lifestyles; attitudes to health and work in the general population; consumerist attitudes; levels of education and awareness. In fact, any factors which may be altering the way people think, work and live from day to day.



Technological: any technical innovation, discovery or application, but for LIS, especially  developments in information and communication technologies. Also may include issues around how pro-active bodies like government departments are in commissioning  and disseminating research (e.g. regional R&D initiatives). Includes not just new materials and machinery, but also innovations in organisation and delivery.



Economic: relates to issues like economic cycles, interest  and inflation rates and whether the national economy is expanding or contracting; costs of resources like fuel; labour shortages; disposable income; consumer spending patterns and confidence; taxation levels; government economic policies, especially related to expenditure on the public services. Includes competitors and an organisation’s own financial resources.



Political: includes legal issues;  new government policies and legislation; regulation and licensing of professionals; standards for public services (e.g. charter marks, national audits, CHI(A), service level agreements).




For our case study, analysis under these four headings will be quite adequate, but you may come across an “extended “ PEST analysis, with the rather odd acronym PESTELI . This is a not a new pasta dish, nor is it Italian for pestle, but it adds on three more categories:


Ecology: the way the organisation interacts with other organisations.


Legislative requirements: this specifically separates legal from political factors, but for the purposes of our case study, we can leave them together.


Industry analysis: a review of the overall “attractiveness”  of the  type of business the organisation operates in.





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