QUESTION
You are to write a 2,000 to 2,500 word analysis on Business Analysis and the role of the Business Analyst within organisations, and how it has evolved over the past thirty years.
Then you are to speculate (using sound argument based on research) on how and why the role may develop in the coming years/decades
SOLUTION
Business analysis is about identifying the business needs and problems of an organization. Once the problems are identified, business analysis also involves identifying and generating the solutions of those problems (Kathleen B Hass, Richard Vander Horst, Kimi Ziemski ,2008, pg 96).
The solutions identified in business anaysis may be of the following types:
i) Development of completely new systems
ii) improvement and up gradation of existing processes or business process reengineering
iii) Strategic and organization wide changes.
The personnel responsible with the task of business analysis are business analysts. The business analysts have been classified into different types according to their areas of focus. For instance IT business analysts focus on generating IT and software solutions to the problems of the organization.
The perspective of business analysis is to identify those areas where the organization needs to take some action so that it can achieve its strategic goals and objectives. Business analysis focuses on strategies, processes, structures and systems of the organization.
Business analysis also involves the monitoring of the external environment so that new business opportunities for the organization can be identified. Creation of business architecture is also within the domain of business analysis (Kathleen B Hass, Richard Vander Horst, Kimi Ziemski ,2008, pg 87).
The business architecture is the sum of the organizational capabilities, value chains, stakeholder and partner relationships, processes and structure of the organization. The organizational structure plays a critical role in making the organization more effective and efficient.
Feasibility studies are an integral part of business analysis. Feasibility studies determine the feasibility in practical terms of a proposed project or course of action. The feasibility is adjudged on the parameters of costs, technical feasibility, operational feasibility, legal feasibility and financial feasibility.
As aforementioned, analysis of the external environment is done by the business analyst for the identification of opportunities and threats in the external environment. At the same time, the business analyst also analyzes the internal environment for identifying the strengths and weaknesses of the organization.
After the business opportunities have been identified, the analyst prepares the business case. The business case states the reasons and causes because of which the company should embark on a new project or course of action.
Risk assessment is another aspect of business analysis. It is a component of risk management. The risk is measured qualitatively and quantitatively. Such a measurement of risk helps in assessing the seriousness of the risk in terms of its possible adverse impacts.
Goals of business analysis:
The main goals of business analysis are:
i) Reduction in efficiencies and leakages: Such inefficiencies and wastages increase costs and decrease profitability and Returns on investments ( ROI ). The business analyst continuously strives to eliminate them.
ii) Generating solutions of complex problems of the organization: This is one of the raison d’être of business analysis. The business analyst suggests solutions to the problems and challenges that are plaguing the organization.
iii) Documentation of the requirements : Business analysis aims at meticulous documentation of the requirements of a project or the organization. This meticulous document then guides the business analyst in devising the solutions of the problems. Business analysts constantly strive to define the applications in the best possible way.
Business Analysis Techniques:
One popular technique of business analysis is the PESTLE analysis. PESTLE analysis is used for analyzing the macro-environment. In PESTLE analysis the political, economic, social, technological, legal and environmental factors of the macro-environment are analyzed.
The HEPTALYSIS technique is used for analyzing business ventures in their initial stages on the following parameters: Product or service; potential market size; execution strategy and plan; financial resources; human resources; expected return on investments (ROI) and margin of safety.
The MOST technique analyzes a project on the parameters of mission, objectives, strategy and tactics. The mission indicates the ultimate goal or objective of the business. The objectives are the critical goals that have to be achieved for the project or business to achieve its mission. The strategies are the ways in which the objectives will be achieved. The tactics are the ways to implement the strategy of the organization.
SWOT stands for strengths, weaknesses, opportunities and threats. It is one of the most commonly used techniques of business analysis. The strengths and weaknesses of the organization are identified and so are the opportunities and threats in the external environment (Hall, J.M. and Johnson, M.E.,2009,pg 91-93).
The CATWOE technique analyzes the perspective of the business. Understanding of this perspective enables the analyst to understand the fit between the potential solutions and the strategy of the business. This technique analyzes the perspective of the business on the parameters of customers, actors or stakeholders, transformation processes, world view, owner and environmental constraints.
Another contemporary business analysis technique that is gaining currency is the ‘Six Thinking Hats’ technique. This technique is used in brainstorming sessions. Brainstorming sessions are done for generating new and innovative ideas. The six thinking hats classified in this technique are:
i) White thinking which is purely logical thinking. Such thinking is based on pure facts.
ii) Green thinking which is more intuitive and creative. Such thinking is lateral and looks beyond the available facts.
iii) Black thinking is the pessimistic way of thinking. Such thinking operates with a negative perspective.
iv) Yellow thinking is defined as optimistic thinking. Yellow thinkers move with a positive perspective and focus on the bright aspect of things.
v) Red thinking is characterized by passion and emotions. Red thinkers are very passionate about their ideas and beliefs.
vi) Blue thinkers are calm and dispassionate. Blue thinking is not characterized by excessive emotions or passions.
The Five Whys technique is another popular business analysis technique. This technique is used for understanding the causes of the problems. The five whys are asked for analyzing the different aspects of the problems (Howard Smith and Peter Fingar,2003,pg 93).
The MoSCoW technique of business analysis is used in requirements planning. It prioritizes the requirements on the following parameters:
i) Must have requirements, which are the indispensable requirements. Without these requirements the delivery or the solution will not succeed.
ii) Should have requirements, which are those requirements which the solution is expected to deliver.
iii) Could have requirements, which are those requirements that will maximize the satisfaction generated by the solution or the project.
iv) Would like to have requirements, which are those requirements that can be needed in future but are currently not required.
The VPEC-T technique of business analysis analyzes the prevailing context on the basis of the following parameters:
i) Values of the stakeholders.
ii) Policies of the organization which set the constraints within which the goals have to be achieved.
iii) Events of the external environment which will have an impact on the organization or the project.
iv) Content that is relevant to the current situation or extent. This content is extracted from the relevant documents and conversations.
Object oriented analysis is another technique that is used in IT business analysis. Objected oriented analysis uses the techniques of object modeling for identifying the requirements of the IT system. Objected oriented analysis focuses on what the IT system does. Object oriented designing focuses on how the Information Technology system does what it does.
The role of business analysts in software implementation projects:
The biggest evolution in the role of business analyst over the past two decades has happened because of the advent of information technology and software. The IT business analysts focus on the information technology and software needs of the organization. Through fulfilling these solutions the IT business analysts strive to make the IT and software architecture a source of competitive advantage for the organization.
In a software implementation project the IT business analyst documents the requirements of the internal users. After requirements documentation the business analyst suggests the software solutions that can fulfill the needs of the internal users and the organization. After due diligence the IT business analyst also assesses the costs and benefits of implementing these solutions. Should this software be developed in-house or should it be bought from an outside vendor? This question too is answered by the business analyst. The IT business analyst should suggest solutions so that the return on investments (ROI) of the software project is maximized.
The challenges before a business analyst:
There are numerous challenges before a business analyst. The business analyst dons the roles of strategist, architect and systems analyst. The rapidly changing external environment in this era of globalization and information technology has compounded the challenges of the business analyst (Paul Harmon, 2007, pg 88). He has to keep himself abreast of the developments in the external as well as the internal environment. A business analyst therefore has to be aware about both the macro-environment and micro-environment.
The change in the role of Business Analyst over the past thirty years:
The biggest change has come because of Information technology and software developments. The role of IT business analyst emerged with this. Another change came because of increased competition due to globalization. The external environment has become much more dynamic because of this. The challenges and problems of an organization operating on a global scale can be quite different from those of an organization operating in one country only.
Role of the business analyst in future:
The role of the business analyst in future may change if major technological innovations like those in information technology take place. The business analyst in future will continue playing the role of strategist and systems analyst. The business analyst will have to provide such solutions to the organizational problems that are aligned with the strategy of the organization. In the absence of ground breaking technological innovations and challenges the business analyst in future will have a very similar role like the one in present (Howard Smith and Peter Fingar,2003, pg 77).
Business Analysis in Practice:
The business needs are identified through a process that follows the following steps:
i) Defining the business in terms of its mission and vision.
ii) Understanding the domains in which the business operates.
iii) Identifying and prioritizing the goals of the business. The business should achieve these goals if it wants to fulfill its mission and vision.
iv) Identifying the core competencies of the business. The core competencies are the areas where the business has an expertise. These core competencies are the biggest source of competitive advantage for the business.
v) Identifying the competitive positioning of the business.
After identifying the business needs, the business analyst does company analysis in terms of its business architecture, enterprise resources etc. This is followed by requirements planning and management. Requirements planning involves identification of the requirements, prioritizing them and then managing them. In the first stage of requirements planning and management, the business analyst lists down the requirements of a project. The business analyst asks the different stakeholders about the requirements of a project. The analyst, for requirements elicitation, can use methods like brainstorming, interviews, focus groups, surveys, user task analysis, workshops, reverse engineering, document analysis etc (Howard Smith and Peter Fingar,2003,pg 74).
Requirement analysis and specification is the next step. The requirements are specified in great detail. The whole architecture of the business is analyzed and documented. The business processes are analyzed. Business process analysis is critical for business analysis. The business process consists of all those processes that are involved in the production of the final goods and services that the business delivers. By analyzing the business processes, the business analyst identifies the strengths and weaknesses of the process and also the requirements that will make the business processes more efficient and effective (Hall, J.M. and Johnson, M.E.,2009, pg 91-93).
Object oriented analysis is done for identifying the functional requirements of a system. Object-modeling techniques are used for analyzing the functional requirements.
Structured analysis is also done. This analysis identifies the IT and software requirements, specifies them and these specifications are then used for generating the hardware and software solutions.
The requirements documentation can be in textual form, matrix form or in the form of diagrams and models. After the requirements are documented the requirements are communicated to the different stakeholders. The requirements validation is done in the last step for ensuring the validity of the requirements and the solutions. Through requirements validation the analyst ensures that the requirements and proposed solutions will actually satisfy the needs and objects of the project or organization.
Business Impact Analysis:
Business impact analysis is done for distinguishing between the critical and non-critical activities of the organization. The critical activities of the business are those activities whose disruption will result in substantial negative impact for the stakeholders of the organization. Disruption in non-critical activities may result in not so significant impact for the stakeholders of the organization (Paul, Debra; Donald Yeates, Keith Hindle ,2006, pg 87).
Conclusion:
Business analyst performs very important function in a business organization. There are strategic, technical and implementation dimensions to business analysis. The importance of the technical dimension of the role of the business analyst has increased in significance due to developments in information technology and software. In future this dimension of business analysis will gain more prominence.
The business analyst is informed by the strategy of the organization. On the other hand the business analyst also informs the strategy of the organization. So there is a two-way interaction between the business analyst and the strategic management of the organization. The business analyst has to oversee both the micro-environment inside the organization and the external macro-environment. As the complexities and challenges in the macro-environment increase, the challenges of the role of the business analyst will also multiply. The role of the business analysis will evolve with the evolutions in technology and evolutions in the global and domestic macro-environments. One thing however can be said with certainty about the future role of business analyst and i.e. the role of the business analyst is not going to decrease in significance in future. And there is a very high probability that the role of the business analyst will evolve from that of an analyst to a leader in future.
References:
Kathleen B Hass, Richard Vander Horst, Kimi Ziemski ,2008, From Analyst to Leader: Elevating the Role of the Business Analyst ,New York: Management Concepts
Hall, J.M. and Johnson, M.E. (2009), “When Should Process Be Art, Not Science“, Harvard Business Review
Paul Harmon, (2007). Business Process Change: 2nd Ed, A Guide for Business Managers and BPM and Six Sigma Professionals. Sydney: Morgan Kaufmann
Howard Smith and Peter Fingar,2003, Business Process Management. New Jersey: The Third Wave, MK Press
Paul, Debra; Donald Yeates, Keith Hindle (2006), Business analysis, Boston:BCS
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