The Coming of Age of the Business Analyst

Written by Kathleen B. Hass, PMP on March 26, 2007. Posted in Articles.

The dismal success of enterprise-wide IT projects is a matter of national record. According to Meta Group Research (now a part of Gartner), “Communication challenges between business teams and technologists are chronic – we estimate that 60%-80% of project failure can be attributed directly to poor requirements gathering, analysis, and management.” Forrester Research concurs: “Poorly defined applications have led to a persistent miscommunication between business and IT that largely contributes to a 66% project failure rate for these applications, costing U.S. businesses at least $30B every year.” James Martin reports that “56% of defects can be attributed to requirements, and 82% of the effort to fix defects.” Standish estimates that nearly 70 percent of projects are late, over budget or fail outright; Gartner reports that 50 percent of projects are rolled back out of production. Carnegie Mellon states that 25-40 percent of all spending on projects is wasted as a result of rework. And the Office of Management & Budget reported on March 26, 2003 “…771 projects included in the fiscal 2004 budget – with a total cost of $20.9 billion – are currently at risk.”

Those statistics are troubling. So, what exactly is the problem? Project managers are held accountable for getting projects completed on time and on budget. Technical managers are responsible for quality technological solutions. But no one has been accountable for keeping an eye on value as the implementation proceeds. That’s why the new position of business analyst (BA) is fast emerging to fill the gap. The BA’s task is to gather accurate requirements, analyze them and manage them properly throughout the project’s implementation to ensure a value-added outcome that improves an organization’s bottom line. Business requirements, derived from business goals, are the essential activities of the enterprise that must be supported by the system – so much so that at conferences, BA courseware and presentations have become hot topics, and cutting-edge companies are already hiring BAs or investing in professional development for internal candidates.

Defining the Role

In virtually every organization, the pivotal leadership role of the business analyst is beginning to shape the future of IT. In a nutshell, BAs are focused on business needs and on monitoring the value a project has promised to deliver to the organization throughout its implementation. The BA continually scrutinizes costs and compares them to benefits to ensure the project remains sound.

In October 2003, as the role of the BA emerged, the International Institute of Business Analysis (IIBA, www.iiba.com) was created as an international, not-for-profit professional association for business analysis professionals. “The IIBA was founded in response to a real demand in the business community for more BAs,” says Kevin Brennan, a consultant with blue sands, inc. in Toronto, Canada, who serves as Co-chair of the IIBA’s Body of Knowledge Committee. “Businesses have been facing a shortage of people who are qualified to perform requirements analysis, and proper requirements are critical to developing software effectively, on time and in concert with overall business strategy. When companies hire new employees for these roles, they have no guarantee that these candidates actually have the knowledge and skills required. Without a pool of people who can perform business analysis, it’s difficult for IT departments to deliver what the business needs.”

The impetus for the Institute’s launch came from a group of companies based in the Toronto area that had experienced difficulties in hiring business analysts. “Applicants presented all sorts of skills and all sorts of backgrounds, but could not consistently be expected to be effective in the role,” says Brennan.

The IIBA’s mission is to develop and maintain standards for the practice of business analysis and for the certification of practitioners. It defines the position as follows: “Business Analysts are responsible for identifying the business needs of their clients and stakeholders to help determine solutions to business problems. The BA is responsible for requirements development and requirements management. Specifically, the BA elicits, analyzes, validates and documents business, organizational and/or operational requirements. Solutions are not predetermined by the BA, but are driven solely by the requirements of the business. Solutions often include a systems development component, but may also consist of process improvement or organizational change. The BA is a key facilitator, within an organization, acting as a bridge between the client, stakeholders and the solution team. Business analysis is distinct from financial analysis, project management, quality assurance, organizational development, testing, training and documentation development. However, depending on an organization, a BA may perform some or all of these related functions.”

As with any other profession, there are entry-level, mid-level and senior positions. Senior BAs emerge from talented people current in both technical skills and business acumen, and they represent a critical strategic asset to their organizations. They work with the executive team and with project portfolio planning and management teams on:

Pre-project analysis and feasibility studies
Building business cases for new change initiatives
Comparing initiatives to identify which one can be implemented with the fastest time to market and lowest cost and risk to achieve the highest value
Decision-making to invest in the most valuable projects

Competencies and Skills

Business requirements’ analysis differs from traditional information systems’ analysis in its focus, which is exclusively on adding value to the business. In particular, project managers rely on BAs to assist in providing more detailed project objectives; business needs analysis; clear, structured, useable requirements; trade-off analysis; requirement feasibility and risk analysis; and cost-benefit analysis. Without the key liaison of the BA, requirements’ definitions will remain poor, resulting in disconnects between what IT builds and what the business needs. Although the function of BA is distinct from that of a Systems Analyst who fulfills a primarily technical role, some BAs are former Systems Analysts or IT managers. With additional professional development, technical specialists can advance into a business-focused BA position. A future job opportunities ad for a BA will likely call for the following skill sets and competencies:

The BA is “bilingual” in that he or she speaks the language of management and leadership, as well as the language of the IT organization. This ensures requirements are developed and documents structured for optimum use by technical personnel in the design and development of solutions. At the same time, these requirements and documents need to be understandable to the management team, so it can use them to validate business needs.
Technical proficiency and skills in requirements’ elicitation
A thorough understanding of business process work flows
Ability to plan, execute and facilitate workshops at which requirements are gathered from users, customers, stakeholders and developers
Interviewing and surveying skills to obtain information from business subject matter experts
Prototyping competency to work with technical teams in procuring early validation of projects
Strong communication skills, and specifically expert writing skills, to ensure that statements of textual requirements are unambiguous, accurate and complete. While requirements must be written in business language rather than in technical terms, they must be understandable by technical personnel.
Excellent project management skills to plan and manage business analysis activities
Good knowledge of modeling techniques and risk management
Verification and validation skills, to ascertain that requirements are valid
Problem-solving skills
Organizational change-management skills. Once a solution has been developed, the BA prepares the organization to implement and operate it efficiently, so that the value of the new asset is maximized

While technical knowledge is a prerequisite for the role, it is insufficient for successfully managing the requirements of the large, enterprise-wide, complex, mission-critical projects that are the norm today. “One of the goals of the IIBA is to raise the quality of software requirements analysis and thus improve the overall delivery of IT projects,” says Brennan. “Currently, software requirements analysis frequently takes place without directly considering the strategic goals of the enterprise. While business users are interviewed and their needs synthesized and analyzed, there are always competing interests that don’t necessarily tie into enterprise goals. In the future, BAs will effectively tie IT efforts to the business and help drive change efforts across the enterprise.”

Business Analyst Knowledge and Skill Set Requirements

Training for BAs

Since there appears to be a never-ending demand for new IT products and services, executives across the spectrum are adopting the business analysis process to increase the value IT projects bring to the business. In building the business analysis competency within their organizations, they rely on training companies that have developed leading-edge BA course materials and entire BA certification programs.

Training organizations are working in concert with the IIBA, which is in the process of setting standards and developing a body of knowledge for the discipline. “The IIBA’s Body of Knowledge is similar to that developed by the Project Management Institute (PMI) for project management professionals,” Brennan explains. “It describes industry standards for business analysis based on practitioner input and industry best practices. We surveyed the literature of the field and distributed task surveys to practitioners and asked them to review drafts of the Body of Knowledge in comparison with their day-to-day professional practices. At last count, we have had over 600 responses from Business Analysts around the world. That gives us the confidence to say that the content of the Body of Knowledge is in fact reflective of the realities of a BA’s work day.” The first release of the Body of Knowledge was in July 2006 with an update scheduled for later this year. It will be used by training organizations, individual practitioners and businesses that need to develop BA job descriptions. More information is available at www.theiiba.org “

The IIBA is also developing a certification test to award the designation of Certified Professional Business Analyst. “We are using the task survey to validate the certification process to ensure compliance with ISO standards for professional bodies,” says Brennan. The Business analyst student must acquire mastery of a unique combination of technical, analytical, business and leadership skills. The curriculum of a business analysis certificate program consists of studies of computing and management information systems, coupled with traditional business administration courses. It is designed to enhance participants’ ability to elicit, analyze, document, secure agreement, test, trace and manage requirements throughout the life of a project. Courses may include subjects such as the following:

Fundamental skills for mastering business analysis
Skills for planning and managing project requirements
Business analyst leadership skills
Project meeting management skills
Advanced skills for crafting high-quality requirements, verifying and validating solutions and managing projects for value.

In addition to certification programs, training companies offer half-day and full-day workshops that concentrate on building various key skill sets, such as facilitation, communication, modeling and writing. Of course, effective business analysis career development goes beyond classroom study. Companies will also need to provide mentoring and on-the-job training; advancement based on education, testing and experience; defined evaluation and compensation processes; and suitable titles and advancement opportunities.

How can a BA acquire the stature and influence that will make an executive team listen? It may take some time for BAs to prove themselves and gain recognition. As they conduct expert studies and present solid information to management, either during the strategic planning process or in the course of project selection, they will gradually raise the executive team’s confidence until they become an indispensable strategic asset.

Where Will the BA Reside?

Should mid-level and junior BAs reside in the business-operating unit or in IT? Both solutions have pros and cons. If the BA resides in the business unit, management will take greater ownership of systems problems, gaps and capabilities. It can then collaborate with the BA to develop solutions, which may range from procedural to technical. When the BA resides with the IT group, a possible disadvantage is that the business side may attempt to throw problems over the fence without taking responsibility. On the other hand, if the BA resides in the business organization, he or she may tend to grow increasingly distant from the company’s IT operations. Some organizations have solved this problem by building “communities of practice” in which BAs from all the different business units cooperate according to set standards with the goal of continuous improvement. A good rule of thumb is that mid-level BAs who work on small enhancement projects and troubleshooting should reside in the business unit and consider themselves a team of BAs that are decentralized across the business. In this manner they can work together under a single leader and according to standard processes.

The role of systems analyst will continue to be separate and important. Once a BA documents the requirements from a business perspective, systems analysts will use those requirements to develop systems specifications and solutions. In small organizations one individual might fulfill the role of both BA and systems analyst. He or she will convert business requirements into systems specs and work with IT architects to design the best, most feasible solution. Larger organizations will have teams of systems analysts and teams of BAs who will be exclusive in their roles.

Senior-level BAs can be most effective when they report to a high-level, enterprise-wide project management office or center of excellence where they work to support strategic planning and project selection and to manage major change initiatives. From this vantage point, they will have a perspective of the entire organization rather than being limited by a functional silo. Whether senior BAs are working in a strategic mode on business transformation projects, mergers and acquisitions, new lines of business or multi-million-dollar IT projects, they need a bird’s-eye view of the entire enterprise to ensure that the investment is sound and that the organization will realize the expected benefits.

Creating Value

Depending on the level of responsibility and placement in the organization, a Business Analyst’s duties may include the following:·

Identify and understand the business problem and the impact of the proposed solution on the organization’s operations.
Document the complex areas of project scope, objectives, added value or benefit expectations, using an integrated set of analysis and modeling techniques.
Translate business objectives into system requirements using powerful analysis and modeling tools.
Evaluate customer business needs, thus contributing to strategic planning of information systems and technology directions.
Assist in determining the strategic direction of the organization.
Liaise with major customers during preliminary installation and testing of new products and services.
Design and develop high quality business solutions.

Once a large, high-risk project is funded, the BA becomes one of the full-time, core team members along with the lead developer, key subject matter experts, the project manager, the technical lead and the business visionary who is sponsoring the initiative. While the sponsor need not be a full-time team member, he or she must be available to the team and be fully empowered to make decisions on behalf of the business.

As a member of a project team, the BA’s key role is to keep an eye on the business case and promised value. At each key phase in the project – every time project plans and budgets are updated and when risk is reexamined – the BA revalidates the business case by comparing costs and benefits. He or she manages the entire systems requirements life cycle, from understanding the business need to ensuring that the delivered solution meets the need and adds value to the bottom line. No longer will initiatives be funded for two years only to end in failure because no one performed consistent checks along the way to determine if the investment still made sense. Since projects are negative assets while under way they must be constantly revalidated.

Among the BA’s strategies is the creation and delivery of feature-driven requirements in increments so the business receives value sooner at lower risk. Although each increment is only a small piece of the new solution, feature-driven requirements can be prioritized based on business value. The IT team delivers the highest value features first for immediate benefit.

Once the project is completed, the solution delivered and the project team dissolved, the BA works with the executive sponsor to measure the benefit and report it to all decision-makers. If the benefit does not meet expectations, the BA analyzes what went wrong. For instance, was it a poor investment decision; was it poorly executed; or did it cost more than expected, resulting in poor ROI? This analysis is critical because its results will improve the selection and execution of future projects.

Maturity and Mastery

Companies depend on IT solutions for their very survival. In order to change quickly, respond to new customer demands and beat the competition, they require well designed and built systems. Once management has developed a portfolio of valuable IT projects, the focus is on flawless project execution to maximize the value delivered to the organization.

All too often, however, IT project success is elusive. Projects are late, over budget or may never even be delivered. Sometimes work is incomplete, does not meet requirements or does not deliver the expected benefits or ROI. In many cases, once the results are delivered a few years after the business case was first proposed, the marketplace or company’s needs have changed. Disasters such as these have created a sense of urgency to build a stronger bridge between business and IT. Now, the role of BA has emerged to serve as a liaison between the business community and the technical solution providers throughout the project life cycle. As projects become larger, cross-functional, global and more complex, organizations are realizing that requirements’ management skills are indispensable.

Companies are struggling to manage their portfolios of IT, R&D and other projects. The ideal is to invest in projects that will bring the highest value quickly at the lowest possible cost and risk. But senior decision-makers have neither the time nor the skill sets to analyze competing options, particularly when they involve highly technical solutions. For a mature and effective portfolio management process, leadership needs to be able to depend on a professional trained to perform the necessary analyses, present the best solutions and manage projects for value-added outcomes. The role of the BA is vital to the success of both projects and organizations. Those organizations that are first to acquire and master business analysis competencies and elevate them to a leadership role will more effectively respond to and preempt changes in the marketplace. As a result, the flow of value through the enterprise and to the customer will achieve a significant competitive advantage.