Why terms of reference?
Terms of reference are a key tool of business analysis. They are a vital control for:
- activities and work packages within the project
- project governance and management
- project team members
A useful mnemonic for possible elements of a terms of reference is BOSCARD. It provides a framework for a terms of reference and is the basis of a contract between the business analyst and other project team stakeholders.
BOSCARD stands for:
- Background: What is the background to this project? What is the problem to be solved or the opportunities to be realised? The business analyst is directly concerned with identifying the business problems and opportunities
- Objectives: What are the objectives for this project and for the product or service that it will create? Objectives should relate to the statements in the ‘Background’ about problems and opportunities. Try to relate the project and product objectives to the higher level corporate objectives that this project will support through the provision of its products and services. Objectives can also be linked to the anticipated benefits that this project will realise.
- Scope: Define what is IN and what is OUT of scope for the project or project activity. Scope can be represented graphically by using a context diagram: see below.
- Constraints: Identify constraints such as time and money applicable to the project or project activity. Constraints may also define the format and standards applicable to the deliverables; e.g. ‘Apply in house standards when creating user stories’.
- Authority: Identify the hierarchies of authority that govern the project or project activity.
- Resources: Identify the people with a role within that project. For business analysis related activities, identify the people and the roles that will work with the business analyst. Also identify any non human resources that will be required, e.g. development tools, rooms, equipment, software licences, etc.
- Deliverables: What the project or project activity is supposed to create. The business analyst is typically responsible for delivering the requirements. Other business analysis deliverables include problem analyses, analyses of business processes, business information (data and concepts), business rules, benefits, costs and risks
There is a natural partnership between the project manager and business analyst. The BOSCARD represents a form of contract between the project manager, the business analyst and other players in the project or project activity.
Context diagrams are a great way of demonstrating, discussing, agreeing and reviewing the scope as defined in the terms of reference. Context diagrams may be used show any of the following:
- Scope of a project
- Scope of (sub) activities within the project
- Scope of a role or a project team member
The square at the centre of the context diagram can represent any of the following:
- Organisation or organisation unit
- The product or service that the project intends to create
- A project
- A project activity within an overall project
- A project role or project member; this can show communication channels to and from other roles
The smaller squares surrounding the central one are referred to as ‘externals’ or ‘external entities’. They represent bodies that the central unit communicates with. What they are in any particular case will therefore depend on what the central unit is supposed to represent, e.g. organisation, product, project or team member. In these different cases, the externals could be:
- External organisations such as customer and suppliers
- Internal organisation units which will have to communicate with the project team
- Computer systems which the product to be delivered will have to interface (inter-operate)
- Work units that the concerned role or team member must communicate with
Who Writes the TOR?
The terms of reference are normally created by relevant sections of the project team.
For business analysis activities, the team may include:
- Project sponsor
- Business analyst(s)
- Product manager / owner
- Representatives of the concerned business areas
- Representatives of the architecture, design, development, implementation, test and release management teams
- Project manager
- Representatives of the externals
Terms of reference for a role or an individual may be written members of the role or by the individual concerned.
Agreeing the TOR
Terms of reference must be agreed by all concerned parties.