What is an Activity Analysis?

Mary McMahon

An activity analysis is an assessment of a company or workplace which is designed to gather information about the activities engaged in there and ways in which they can potentially be made more efficient or valuable. The term “activity analysis” is also used in occupational therapy to describe an evaluation of a patient who is getting ready to start therapy, in which case the purpose is to identify activities performed by an individual for the purpose of directing therapy more effectively. In this type of analysis, the occupational therapist looks at activities the patient engages in or wants to resume after an injury, breaks them into their component parts, and determines the best way to help the patient on the basis of activity-based needs.

Businessman giving a thumbs-up
Businessman giving a thumbs-up

In the business world, an activity analysis starts with identifying activities which take place in a given company, office, or environment. For example, if a company sells widgets, a number of activities related to widget sales are going to be identified, including marketing widgets, taking orders, packaging orders for shipment, working with suppliers of raw materials, and managing human resources to ensure that personnel are available to perform all of these tasks. The analysis may also include a specific detailed breakdown of each identified activity.

With activities laid out, the activity analysis moves on to who engages in which activities, how the activities are performed, and why they are performed in a particular way. The analysis looks specifically at how resources are utilized to complete activities successfully, looking at people, time, money, and supplies involved in each activity. The activities are also evaluated in terms of the value they add to the business.

An analysis of activities can usually reveal weak points and areas in which improvement is needed. These can include activities which are not being completed as well as activities which are being performed in an inefficient manner. The preparation of the analysis includes a discussion of areas in which improvement is possible and how to approach that improvement. For example, the activity analysis might point out that widgets could be better packaged by robotic equipment than human workers.

Businesses use the results of an activity analysis to improve their operations with the goal of streamlining and making sure that they accomplish specific goals. Such analysis can also be useful when businesses are preparing to restructure, sell, or make major changes in their operations. For employees, there are advantages to cooperating with the analysis, including opportunities to offer input about areas for potential improvement.

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Discussion Comments


@MrsPramm - Well, people don't just go to work because they want the money though. Sometimes they just need to work and get away from the home.

I think if people are going to evaluate human activity from a financial perspective, either at home or in a business, they have to take into account that humans aren't robots. They aren't necessarily going to increase their output just because you ask them to.


@indigomoth - Yeah, it can work the same way in a household as well. I've heard of households where they crunched the numbers and realized that they weren't saving very much by having two incomes. Childcare costs can be so high that if one of the two people is in a relatively low paying job, then they end up spending everything they earn on the child care.

When you factor in that a parent at home can also do home cooking and repair, it can seem like a cheaper option.


Even a small business can benefit from an activity analysis. Even if you are doing everything yourself, in your business, it can help to work out exactly what steps you're taking.

It might be surprising how it could be more efficient to hire an outside person. If you do your own accounts and taxes, for example, and it takes you a long time because you aren't well versed in that kind of thing and always have to look things up, it might be cheaper to hire someone to do it on a contract, and then you have those hours free to work on another aspect of the business.

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