Hi Paul
I have a couple of alternative suggestions for you. You'll need to take a look at your specific circumstance to determine what is best for you.
1. Process maping
A good basic and familiar technique. Your analysis should observe both the physical and logical process. (ie what information flows happen and how they are transported and transformed each step along the way.
2. Capability Mapping
Capability modelling still looks at activities but instead of in a process context it looks at things from a functional capability view. You are then expected to consider how you can assemble your capabilities into value offerrings for your clients.
There is a discussion at Nick Malik's blog on the strengths and weaknesses of capability v process modelling, and wherthe you can blend them together. It'shere - http://blogs.msdn.com/nickmalik/archive/2008/04/24/merging-capability-modeling-with-process-modeling.aspx
It illustrates this idea better than I can here.
3. Business/operating model
I like the business model framework put together by a guy called Osterwalder (http://business-model-design.blogspot.com/) but there are other significant ones including the Value Chain and Market segmentation, Porter's 5 forces, Organisational structures and so on. (Google these concepts.)
It's an interesting way of looking at business - and includes processes and business activities as a subset, but looks beyond them including relationships, customer value and key performance indicators. Seriousy consider using this as a framework for looking at the whole business (unit) you are investigating.
4. AS v TO BE
I disagree with David's suggestion to go straight for the TO BE, although it's true you might try to capture them both during the one investigation phase. In truth you probably need to go for two rounds of investigation. A forst pass gets the main issues, and the second pass picks up some of the tricky details. By the second round you should know the trouble spots you'll need to pay special attention to.
I think you do need to go for a current and future state because you are going to prioritise activity based upon gaps you identify. You need to compare the two to get a full picture.
5. Aligning activity to goals
Regardless of whether you have taken a process, capability or business model approach. once you have done a comparison of the AS IS and TO BE you will see a number of gaps. You are now doing a GAP ANALYSIS.
Another technique to get a gap to present itself is to do a top-down analysis and a bottom-up one. Top down is aligned withy business strategy, and bottom up is dealing with the day to day practicalities, constraints and values of the organisation.
Each of these gaps should be addresed by one or several 'initatives.' To get to the right initiative you basically have to make a bit of an inuitive leap: What is the best solution. Many consulting types will present 3-5 options. Three is the minimum you should shoot for. If you can come up with 5 then you are doing your job in terms of a dilligent exploration of options. (A resource for this stage is the McKinsey problem solving model. Google it..
Next up you'll need to prioritise each of the initiatives based upon your ability to address them (Feasibility) and the value they present. A guideline for prioritisation can be found via Kaplan and Norton's Strategy Map (or alternatively the Balanced Scorecard.) Feasbility means your ability to put the right money, people and technology in place to get to your solution. Thee are many constraints in business nad you are limited by budget, time and other things so you have to set your expectations to the right level.
Then you hire yourself some expert consultants or project managers and watch your budget and schedule get blown out (unless you have expert BAs on the project.)
I hope this is useful. And my fellow MA forum regulars - I'd love to hear your comments.