What is business analysis?
Business analysis provides support to organisations in these times of increasingly rapid change. This article, ‘What is business analysis’ gives a useful overview of the topic.
The article also examines the role of the business analyst.
A change for the better
What is Business Analysis?
Business analysis concerns the identification and definition of those vital changes, large and small, that all organisations must constantly make in order to:
- adapt
- survive
- prosper
The IIBA defines business analysis as the 'practice of enabling change in an enterprise'. It’s concerned with defining changes to the way an organisation or enterprise does what it does.
Like ships at sea, where storms can explode into life with little or no warning, all organisations operate in an environment,
- over which they have no control
- and which is constantly changing
What is a business analyst?
'Business Analyst' is a role that performs business analysis. There are many job titles for this role.
Click here to read about the required skills for business analysts.
Sources of Change
The changes that organisations must react to are caused by a mix of:
- Politics
- Economics
- Society - Cultures and trends - What's cool and what's not
- Technologies
- Laws of societies and of nature
- Environment - the natural environment in which we all live
These are the 'drivers for change'.
PESTLE - Drivers for change
The initial letters of the words of the sources for change form the word, 'PESTLE'.
PESTLE is a technique that organisations use to prompt them to consider where the next changes might come from. This can identify both opportunities and threats.
Thinking in advance is important because organisations must:
- quickly choose the most appropriate response to the change
- make any necessary adjustments to their strategy
Failure to do this risks being pushed aside.
The ability to respond quickly and appropriately is summed in the concept of 'business agility'. The ability to respond effectively, seizing opportunities whilst avoiding threats, is dependent on the organisation's relative strengths and weaknesses.
Business analysts can help to guide organisations in becoming more agile. In fact, PESTLE is a good place to start to answer the question, "What is business analysis?" It follows that business analysts must understand the organisation's strategy.
Customers, Suppliers and Competition
Organisations provide services for individuals or other organisations; these are their customers.
It is vital that organisations understand who their best customers are and what they value. Effective business analysts must also have this awareness.
Businesses in similar sectors compete for these customers.
To source the development of their product, organisations in all sectors must compete for the limited resources available from suppliers. These resources may be intellectual or physical, tangible or intangible.
The nature of the competition must be understood by organisations and their business analysts.
Rummler and Ramias elegantly demonstrate all of the above in their book, ‘White Space Revisited', a must read for business analysts.
Business analysis and business strategy
An organisation's management will use this and other models to help to determine a business strategy. Senior business analysts may define an information system (IS) strategy that will help to achieve the business strategy. The IT department can then define a technical (IT) strategy to support the IS strategy.
- The IS strategy defines WHAT is required to meet the business strategy
- The IT strategy defines HOW to support the IS strategy, i.e. the software, hardware and services that are needed
Business stakeholders, business analysts and IT specialists need to work together for success. It's a team effort.
All these things may come together with the Chief Information Officer, (CIO). Senior business analysts may work closely with the CIO.
A BA's levers for change - Processes, Data and Rules
Business analysis and business processes
To manage and coordinate their activities, organisations create business processes. These form a major element of business analysis and business architecture.
What is a business process?
Sharp and McDermott, authors of 'Workflow Modelling', define a process as:
- a set of related activities, ...
- triggered by an event, ...
- which achieves a specific result ...
- for the customer and other stakeholders.
An example of a business event is an order received from a customer.
Results of the process that delivers the customer's order are:
- The customer receives what they ordered
- The organisation gets paid
Processes and Customers
The processes on which the life of an organisation really depends are those that are seen by the customers. They must provide value to those customers. In delivering the goods and services, the processes deliver the organisation’s value proposition, their promise of value to the customers. The aim of optimising such processes is to improve the customer experience.
Business analysis and business Data
Processes create and use data. This too forms a major element of business analysis and architure.
Business analysts must seek to understand
- what data an organisation has
- where it is created and used
- where and how it is stored
Modern applications such as artificial intelligence (AI), big data, machine learning, business intelligence and data warehousing are dependent on such knowledge.
Business analysts who have a deep understanding of data and analytics can support the data scientists employed on applications such as AI. They can also help to ensure that the data scientists deliver results of real business value.
If you are not familiar with data modelling, take a look at this short article and video.
Business analysis, data analysis and data analytics
Although the concepts of business analysis, data analysis and data analytics overlap, there are differences between them. Therefore it is useful to first consider them separately as far as this is possible; they all cover a lot of ground and there will be many opinions as to the exact scope of each.
Business analysis is the main topic of this article.
Data analysis can involve the modelling of data in order to understand and define data items and the connections between them. This is a job for a business analyst. Some business analysts may specialise in this area.
Data analytics is a form of data analysis, typically aimed at examining and applying algorithms to very large quantities of data in order to identify metrics such as trends. The people who perform this function may be called data analysts or data scientists. Organisations are likely to have their own understanding of the names and nature of these roles.
Business analysts, particularly those who specialise in data modelling, can support data scientists to help them understand and locate available relevant data.
Other relevant concepts in this area are artificial intelligence (AI) and machine learning.
Business analysis and business rules
Business rules
Business rules authority, Ronald Ross, said that rules are typically derived from business policies.
They support:
- Business processes
- Use of data
- Compliance with regulations and acceptable norms of behaviour
They are the glue that binds things together.
Unfortunately, business rules are often out of sight, in databases, computer code, documents and people's minds.
Business analysts can take a leading role in:
- bringing rules into the open
- ensuring that they are written in the language of the organisation
- and placing the control of them in the hands of people who operate the business
For more information about how to record and analyse business rules, see this article.
A holistic approach to business analysis
Although business processes, data and business rules are at the heart of all organisations' operations, they cannot simply be viewed in isolation. They affect each other.
They are also affected by things such as the:
- workplace and its layout
- management organisation structure
- use of tools and technology
To appreciate the implications of this requires an understanding of the structure of the organisation.
Business analysts must consider all of these things both independently and collectively. This is known as taking a holistic approach, a cornerstone of effective business analysis.
Business analysis and enterprise Architecture
Business analysis provides a bridge between the business and its use of IT. That bridge can be constructed with an enterprise architecture.
The architecture links business strategy to IT strategy and the elements that make up the implementation of that strategy. It comprises, directly or indirectly, all of the things discussed in this article.
This allows the impact of changes in strategy to be assessed. It also paves the way for the support of change programmes and projects.
The role of BAs in change programmes and projects
When there appears to be a problem or opportunity a team comprising business people, business analysts, architects and other relevant groups can examine it.
This typically means creating a programme or project. The critical success factors for business analysis are similar to those for project management. There is a close relationship between these two functions and the roles of business analyst and project manager.
The team seeks to:
- Understand the root cause of a problem
- Assess the size of the opportunities created by the solution
- Define the scope of the project or programme
They can also,
- assess the obstacles to achieving success
- make a case for change, the business case.
BAs determine requirements for a solution
A key responsibility of a business analyst is to determine the requirements for a solution that will,
- solve the problem
- deliver the opportunity
Identifying and defining the true requirements and successfully building solutions based on these requirements, as long been difficult to achieve.
Modern approaches to projects often involve an iterative, so called 'agile' approach, avoiding an immediate dive into detail.
In agile projects, a business analyst might take the role of product owner. This role can
- help to communicate the goal of the product
- manage the backlog of needed activities
An aim of such approaches is flexibility in response to changes arising during the project. This in turn can support the achievement of business agility.
Business analysis is a 'people' job
Above all, business analysis is concerned with people. Business analysts don't work with organisations; they work with people. The role is about understanding the perceptions of the people, the business stakeholders. A person's perceptions give context to what they say and what they ask for. A key technique for understanding perceptions is stakeholder analysis; it's among the first things a business analyst needs to do in change project.
When engaging with stakeholders, BAs need to,
- Demonstrate empathy
- Listen
- Show that they are listening, and interested
These are essential for success in applying techniques such as,
- Interviewing
- Making presentions
- Negotiating