What is business analysis and what does a business analyst do? There are plenty of answers on the search engines. Today I was reading through the Business Analysis Body of Knowledge® (BABOK®) and thought I’d share my analysis regarding their definition of business analysis.
Business Analysis is the set of tasks and techniques used to work as a liaison among stakeholders in order to understand the structure, policies and operations of an organization, and to recommend solutions that enable the organization to achieve its goals.
This introductory paragraph gives an overview of the activities, scope and outcomes of a business analyst. Business Analysis is defined as ways (tasks and techniques) in which people can communicate their understanding of an organisation. It is internally focussed, limited to structure, policies and operations – although in practice these may impact external shareholders such as customers, investors etc. Its outcome is to support a recommendation that meets the organisations goals. Thus Business Analysis involves understanding a situation and formulating a business case for the solution.
Notably there is no explicit mention of IT, computer systems, software design or programming. Business analysis is thus theoretically information technology independent although in practice solutions require the use of information systems. Under this definition, the eighteenth century economist Adam Smith was performing business analysis when he showed that by identifying small steps in a process, you could use a division of labour in the application of the process and assign specialists to each step. This resulted in improved quality, faster production speed and greater profits. This early form of business process re-engineering was long before computers.
Business analysis involves understanding how organizations function to accomplish their purposes, and defining the capabilities an organization requires to provide product and services to external stakeholders. It includes the definition of organizational goals, how those goals connect to specific objectives, determining the course of action that an organization has to undertake to achieve those goals and objectives, and defining how the various organizational units and stakeholders within and outside of that organization interact.
The first sentence starts with clarifying that business analysis involves an understanding how organisations function and this necessitates the possession of business knowledge. This includes knowledge from different functional areas, different industries, different organisational structures, the list goes on. This makes a business analyst a student of business, always learning more on how business functions. With more knowledge comes a greater level of understanding of different solutions that can be employed.
The second part of the opening sentence looks at business analysis involving the definition of capabilities required by a specific organisation. This part is more pragmatic and what the business analyst will be employed to do. This part requires the use of business analysis skills and techniques. Notably this part specifies that capabilities should be defined with regards to external stakeholders and the savvy business analyst will be sure to elicit requirements in this context.
The second sentence covers the scope of business analysis as being to define goals, specify how goals can be measured, recommending a solution and defining how different parties interact. This last part, interaction between parties, is often quite complicated.
Business analysis may be performed to understand the current state of an organization or to serve as a basis for the later identification of business needs. In most cases, however business analysis is performed to define and validate solutions that meet business needs or objectives
This paragraph clarifies that business analysis does not need to have an outcome now, the work can be towards understanding the current status quo and contribute to a solution later. However it carefully points out that most business analysis is to define and validate a solution to meet business needs. Thus business analysis is mostly defining and validating.
However, within the earlier defined scope of “structure, policies and operations “, the use of “current state of an organisation” interestingly opens up possible assessments beyond defining and validating though.. For example, analysis measuring the impact of refund policies, customer service levels, operational bottlenecks and labour productivity.
There is also scope within this definition for business analysis to assess a prospects readiness before committing resources to pre-sales analysis or offering payment terms..
Business analysts must analyse and synthesize information provided by a large number of people who interact with the business, such as customers, staff, IT professionals and executives. The business analyst is responsible for eliciting the actual needs of stakeholders, not simply their expressed desires. In many cases, the business analyst will also work to facilitate communications between organizational units. In particular business analysts often play a central role in aligning the needs of business units with the capabilities delivered by information technology, and may serve as a “translator” between the groups.
The is paragraph clarifies that Business Analysts mustbe able to both analyse and synthesize information from a wide range of sources. The ability to analyse and synthesise are logical processes honed by training and practice. These processes also need to be communicated and when done well can be used to great effect making recommendations and communicating solutions.
This paragraph also adds that a business analyst must be able to move comfortably from a role of listening and understanding, to facilitating or mediating between people and through to teaching, presenting or negotiating. These are high level communication skills.
The experienced business analyst thus needs to be good at understanding, logical thinking and communicating.
A business analyst is any person who performs business analysis activities, no matter what their job title or organizational role may be. Business analysis practitioners include not only people with the job title of business analyst, but may also include business systems analysts, system analysts, requirements engineers, process analysts, product managers, product owners, enterprise architects, management consultants, or any person who performs the tasks described in the BABOK Guide include those who also perform related disciplines such as project management, software development, quality assurance and interaction design.
Quite simply a business analyst is defined by the activities that they do, not by their job title, qualifications or experience.
For reference a viewable version of the BABOK® is available on Google Books: