WHAT IS BUSINESS ANALYSIS?

business analyst role, we now need to recognise the potential this can offer, particularly in a global economic environment where budgets are limited and waste of financial resources is unacceptable. The importance of delivering the business benefits predicted for business change initiatives has becoming increasingly necessary to the survival of organisations.

The use of consultants

Many organisations use external consultants to provide expert advice throughout the business change lifecycle. The reasons are clear: they can be employed to deal with a specific issue on an ‘as-needed’ basis, and they bring a broader business perspective and thus can provide a dispassionate, objective view of the company. On the other hand, the use of external consultants is often criticised, particularly in public-sector organisations, because of the lack of accountability and the absence of any transfer of skills from the external consultants to internal staff. Cost is also a key issue. Consultancy firms often charge daily fee rates that are considerably higher than the employment cost for an internal analyst and, whilst the firms may provide consultants who have a broad range of expertise, this is not always guaranteed. The experiences gained from using external consultants have also played a part in the development of the internal business analysis role. Many business analysts have argued that they can provide the same services as external consultants and can, in effect, operate as internal consultants. Reasons for using internal business analysts as consultants, apart from lower costs, include speed (internal consultants do not have to spend time learning about the organisation) and the retention of knowledge within the organisation. These factors have been recognised as particularly important for projects where the objectives concern the achievement of business benefit through the use of IT, and where IT is a prime enabler of business change. As a result, although external consultants are used for many business purposes, the majority of business analysts are employed by their organisations. These analysts may lack an external viewpoint but they are knowledgeable about the business domain and, crucially, will have to live with the impact of the actions they recommend. Consequently, there have been increasing numbers of business analysts working as internal consultants over the last decade.

THE SCOPE OF BUSINESS ANALYSIS WORK

A major issue for business analysts, based on feedback from a wide range of organisations, is the definition of the business analyst role. Discussions with several hundred business analysts across a range of business forums have highlighted that business analysis job descriptions are unclear and do not always describe their responsibilities accurately. A quick survey of the job advertisements for business analysts also reflects a range of possibilities. For example, in some cases the job description of a business analyst seems, on close inspection, to be similar to that of an analyst/programmer, e.g. ‘Candidates must have experience of SQL.’ In other organisations the business analysts are required to work with senior stakeholders and need to have detailed business domain knowledge. Even though the role of the business analyst emerged almost 20 years ago, a formal definition of the role is still debated hotly whenever there is a group of business analysts.

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The range of analysis activities

One way in which we can consider the business analyst role is to examine the possible range of analysis activities. Figure 1.2 shows three areas that we might consider to be within the province of the business analyst. Consultants, both internal and external, who specialise in strategic analysis often have to get involved in business process redesign to make a reality of their strategies, and good systems analysts have always needed to understand the overall business context of the systems they are developing. However, it is useful to examine them separately in order to consider their relevance to the business analyst role.

Figure 1.2 Potential range of the business analyst role

Strategic analysis and definition

Business analysis

IT systems analysis

Strategic analysis and definition

Strategic analysis and definition is typically the work of senior management, often supported by strategy consultants. Some business analysts, albeit a minority, may be required to undertake strategic analysis and identify business transformation actions, but most will probably have a role to play in supporting this activity.

In the main, we believe that strategic analysis is mostly outside the remit of business analysis. We would, however, expect business analysts to have access to information about their organisation’s business strategy and be able to understand it, as their work will need to support the achievement of this strategy. Given that business analysts often have to recommend process and IT system solutions,

it could be argued that they define the tactics that will deliver the business objectives and strategy. Hence, it is vital that they are able to work within the strategic business context. It may also be the case that some business analyst roles will require strategic-level thinking. The use of IT to enable business improvements and the opportunities presented by technology will need to be considered during any strategy analysis. The business analysts are the specialist team within organisations that should be able to advise on the use of technology to drive business change. Given these issues, we feel that although strategic analysis work is not core to business analysis, business analysts will need a good understanding of strategy development processes. Chapter 3 explores a range of strategic analysis techniques and provides an overview of the strategic planning process.

IT systems analysis

At the other end of our model, there is the IT discipline called systems analysis. The systems analyst role has been in existence for over 40 years and can be

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WHAT IS BUSINESS ANALYSIS?

defined clearly. Systems analysts are responsible for analysing and specifying the IT system requirements in sufficient detail to provide a basis for the evaluation of software packages or the development of a bespoke IT system. Typically, systems analysis work involves the use of techniques such as data modelling and process or function modelling. This work is very specific to describing the computer system requirements, and so the products of systems analysis define exactly what data the computer system will record, what processing will be applied to that data and how the user interface will operate.

Some organisations consider this work to be of such a technical nature that they perceive it to be completely outside the province of the business analyst. They have decided that modelling process and data requirements for the IT system is not part of the role of the business analyst, and have separated the business analysis and IT teams into different departments. The expectation here is that the IT department will carry out the detailed IT systems modelling and specification. The job role ‘systems analyst’ tends to be used rarely these days, and the detailed specification of the requirements is often undertaken by systems designers or developers.

However, in some organisations the term ‘IT business analyst’ has been adopted to identify a business analyst working in the area traditionally known as systems analysis. The essential difference here is that a business analyst is responsible for considering a range of business options to address a particular problem or opportunity; on the other hand an IT business analyst, or systems analyst, works within a defined scope and considers options for the IT solution.

In some organisations there is little divide between the business analysts and the IT team. In these cases the business analysts work closely with the IT developers and include the specification of IT system requirements as a key part of their role. In order to do this, the business analysts need a more detailed understanding of IT systems and how they operate, and need to be apply to use the approaches and modelling techniques that fell historically within the remit of the system analyst job role.

Business analysis

If the two analysis disciplines described above define the limits of analysis work, the gap in the middle is straddled by business analysis. Hence Figure 1.2 highlights the possible extent of business analysis work. Business analysts will usually be required to investigate a business system where improvements are required, but the range and focus of those improvements can vary considerably.

It may be that the analysts are asked to resolve a localised business issue. They would need to recommend actions that would overcome a problem or achieve business benefits. However, it is more likely that the study is broader than this and requires investigation into several issues, or perhaps ideas, regarding increased efficiency or effectiveness. This work would necessitate extensive and detailed analysis. The analysts would need to make recommendations for business changes and these would need to be supported by a rigorous business case.

Another possibility is that the business analyst is asked to focus specifically on enhancing or replacing an existing IT system in line with business requirements.

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In this case the analyst would deliver a requirements document defining what the business requires the IT system to provide.

Whichever situation applies, the study usually begins with the analyst gaining an understanding of the business situation in hand. A problem may have been defined in very specific terms, and a possible solution identified, but in practice it is rare that this turns out to be the entire problem and it is even rarer that any proposed solution addresses all of the issues. More commonly, there may be a more general set of problems that require a broad focus to the study. For any changes to succeed, the business analyst needs to consider all aspects, for example the processes, IT systems and resources that will be needed in order to improve the situation successfully. In such cases, techniques such as stakeholder analysis, business process modelling and requirements engineering may all be required in order to identify the actions necessary to improve the business system. These three topics are the subjects of later chapters in this book.

Realising business benefits

Analysing business situations and identifying areas for business improvement is only one part of the process. The analyst may also be required to develop a business case in order to justify the required level of investment and ensure any risks are considered. One of the key elements of the business case will be the identification and, where relevant, the quantification of the business benefits. Organisations are placing increased emphasis upon ensuring that there is a rigorous business case to justify the expenditure on business improvement projects. However, defining the business case is only part of the picture; the delivery or ‘realisation’ of these business benefits once the solution has been delivered is also gaining increasing focus. This is largely because there has been a long history of failure to assess whether or not the business benefits have been realised. The business analyst will not be the only person involved in this work, but supporting the organisation in assessing whether predicted business benefits have been delivered is a key element of the role.

Taking a holistic approach

There appears to be universal agreement that business analysis requires the application of an holistic approach. Although the business analyst performs a key role in supporting management to exploit IT in order to obtain business benefit, this has to be within the context of the entire business system. Hence, all aspects of the operational business system need to be analysed if all of the opportunities for business improvement are to be uncovered. Figure 1.3 represents the four views that it is useful to consider when identifying areas for improving a business system.

This model shows us that business analysts need to consider these four aspects when analysing a business system. For each area, we might consider the following:

The processes: are they well defined and communicated? Is there good IT support, or are several ‘workarounds’ in existence? Does the process require documents to be passed around the organisation unnecessarily?

The people: do they have the required skills for the job? How motivated are they? Do they understand the business objectives that they need to support?

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WHAT IS BUSINESS ANALYSIS?

The organisational context: is there a supportive management approach? Are jobs and responsibilities well defined? Is there effective cross-functional working?

The technology: do the systems support the business as required? Do they provide the information needed to run the organisation?

Figure 1.3 The four views of a business system

Organisation

Technology

We need to examine and understand these four areas if the business system is to be effective. It is often the case that the focus of a business analysis or business change study is on the processes and the IT support. However, even if we have the most efficient processes with high standards of IT support, the system will have problems if the staff members do not have the right skills to carry out their work or the organisation structure is unclear.

It is vital that the business analyst is aware of the broader aspects relating to business situations such as the culture of the organisation and its impact on the people and the working practices. The adoption of an holistic approach will help ensure that these aspects are included in the analysis of the situation.

Business analysis places an emphasis on improving the operation of the entire business system. This means that, although technology is viewed as a factor that could enable improvements to the business operations, there are other possibilities. The focus on business improvement rather than on the use of automation per se results in recommendations that typically, but not necessarily, include the use of IT. There may be situations where a short-term non-IT solution is both helpful and cost-effective. For example, a problem may be overcome by developing internal standards or training members of staff. These solutions may be superseded later by longer-term, possibly more costly, solutions but the focus on the business has ensured that the immediate needs have been met. Once urgent issues have been handled, the longer-term solutions can be considered more thoroughly. It is important that our focus as business analysts is on identifying opportunities for improvement with regard to the needs of the particular situation. If we do this, we can recommend changes that will help deliver real business improvements.

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