Importance of business analysis
Business analysis is the practice of identifying business needs and establishing the requirements for capabilities to achieve them. This article explores why it’s so important and its role in driving organisational success.
Estimated reading time: 4 minutes
Why is business analysis so important?
Business analysis is important because it helps to drive organisational success. It does this in a number of ways. For example,
- Optimising business processes, leading to cost and time savings
- Ensuring the availability of accurate data to make informed decisions
- Supporting strategic planning
Adapting to change
I cannot control the wind,
but I can adjust my sails
to reach my destination
Business analysis helps organisations to stay competitive by adapting to changing market conditions.
Organisations operate in a world they cannot control. Because of this, all organisations must make continual adjustments to their strategies and tactics. Business analysis helps them do this.
Components of business analysis
For this article, I’ve selected 5 major components of business analysis, namely,
- process improvement
- data analysis
- business rules
- requirements discovery
- stakeholder engagement
Process improvement
Process improvement concerns the analysis and optimisation of business processes for efficiency and effectiveness. It is also intended to ensure that the processes support strategic objectives.
Data analysis
Data analysis provides a base for decision making and analytics, checking that the organisation is on course to achieve its strategic objectives.
Business rules
Business rules analysis seeks to ensure that the rules are current and can be easily managed by business stakeholders to enable appropriate governance of the organisation.
Stakeholder engagement
Stakeholder engagement involves collaborating with stakeholders to understand their perspectives, identify issues and risks, resolve differences of opinion, and identify options for solutions that will improve business performance. This collaboration should achieve openness, transparency, in all activities. As long as BAs deliver on their agreements, transparency is likely to encorage mutual trust and respect between analysts, stakeholders and developers.
Problems, opportunities, capabilities and requirements
All this analysis leads to the identification of problems and opportunities. Business analysts and stakeholders can then specify requirements to define capabilities that can be used to eliminate the problems and make the most of the opportunities.
Roles of a business analyst.
BAs play multiple roles in business change initiatives. Examples include:
- Intermediary, where business analysts act as a bridge between business stakeholders and technical teams. Among other things, this can involve interviewing stakeholders, facilitating workshops, and ensuring that all projects keep the business objectives front and centre.
- Another role is problem solver. BAs analyse problems and potential opportunities. They then collaborate with stakeholders to define requirements for capabilities can be used to solve the problems and maximise the opportunities.
- Supporting IT development. In this role, BAs cooperate with IT teams to turn the proposed capabilities into products such as software and user manuals. These products are often referred to as solutions. In practice, they are more like tools that stakeholders can use to achieve solutions.
- Planner. This involves cooperation with project managers and others to plan and create business cases for projects, then monitor project progress to ensure that it creates and delivers products that can add value for the organisation.
- Testing support involves cooperating with testers to check that the delivered products work according to the requirements and agreed acceptance criteria.
- Implementation support. This role involves working with the business stakeholders, IT, and the various support functions, to ensure that the tested products are transferred successfully to the operational environment.
- Trainer. BAs often create training materials for the new products. They may also deliver the training to the product users.
- Benefits management involves working with business stakeholders, before and after the implementation of the products, to ensure that the anticipated benefits of the project are actually achieved.
Examples of business analysis in action.
To better understand typical business analysis activities, let’s look at some examples.
- Analysing the current order fulfillment process to identify bottlenecks and inefficiencies, leading to reduced lead times and increased customer satisfaction.
- Collaborating with stakeholders to identify requirements for a new customer relationship management system.
- Analysing sales data from an online retail store to generate insights for marketing campaigns.
- Coordinating with IT teams to integrate multiple legacy systems into a unified enterprise resource planning system.
- Assessing the risks associated with the implementation of a new financial reporting system.
From inventory management in retail to risk management in financial services, business analysis is everywhere, driving positive outcomes for organisations that know how to make the most of it.
You can see that there is far more to business analysis and the BA role than might be immediately obvious. That’s what makes it such a rewarding career.
Conclusion – Why business analysis is so important
In conclusion, business analysis is a vital practice that helps organisations achieve their goals and stay competitive in today’s rapidly changing business environment.
By understanding the components of business analysis and the role of business analysts, you can play a valuable role in unlocking the full potential of your organisation.