The Value of Business Analysis: Identifying Business Need
One of the critical roles of the Business Analyst (BA), or Enterprise Analyst (EA), in the area of Enterprise Analysis is to identify business need. Many business professionals make the mistake of thinking that since it is named Enterprise Analysis, that identifying business need can happen only at the enterprise level. Nothing could be further from the truth; Enterprise Analysis and identifying business need, can happen at the enterprise level, involve multiple lines of business within the organization but not the entire enterprise, and at the business unit level.
There are many factors, or many ways that the business analyst can identify business needs. It can be a result of market research or an identified new opportunity brought about by actions of a vendor or competitor. It could be derived from a strategic goal or initiative of the organization. It could have come from a business user complaint about a current system issue and/or the subsequent Root Cause Analysis. It could also be derived from an Enterprise Analysis activity that the BA performed, such as Capability Gap Analysis, SWOT Analysis or Product Feasibility Analysis.
If this vital role is not performed than the organization would not realize the benefits of identifying some business needs that need to be addressed, possibly gaining greater competitive advantage, possibly achieving strategic goals or taking advantage of an opportunity presented in the market. As you can see this can have a direct effect on the strategic success, and bottom line, of the organization.
Define Business Need
Once identified, the business need should be documented in the Business Case to initiate a project to develop a solution for this business need. This solution may, or may not, involve information technology software development; some solutions are completely a business solution. The business need defines the problem for which the business analyst is attempting to find a solution. The way the business need is defined determines which alternative solutions will be considered, which stakeholders will be consulted and which solution approaches will be evaluated.
Defining business need and defining the problem are two different things. The business need leads to the problem, but both the business need and problem statement needs to be defined and documented. Take for example that you have identified that sales have been decreasing for the past three years. So your business need statement could be “Need increased sales”. What is your problem statement? A root cause analysis uncovered an aging sales force using archaic sales techniques, no new products introduced to the marketplace in three years, competitors introducing products with innovative features, no new marketing campaigns in the last two years, rising costs, and production equipment in need of repair and upgrade.
Leads to the Solution
Now that the true problems have been identified, the enterprise can now initiate separate projects to find solutions for the sales problem, product problem, marketing problem, and production problems; rising costs and production equipment. The team assigned the sales problem can determine if they need to hire younger salespeople, provide sales training on newer techniques, provide better sales support, or implement a new Customer Relationship Management (CRM) system. Likewise, the other project teams will determine proper solutions to their defined problem statement.
One pitfall that many business analysts and project teams fall into is trying to define the business need by the solution. In practice, quite often the business stakeholders define the solution at the start of the project instead of defining the problem statement first. They start with the solution first instead of the problem first. This reduces the solution alternatives that receive consideration and may bring a lesser valuable solution to deployment than what could have been achieved. So starting with the business need, problem statement, and solution scope; then developing alternative solutions will bring the most valuable solution to the organization, and the business analyst’s recommendation, to light.
In our sales problem example above, the organization may have identified slumping sales for three years. Without proper problem statement identification the business team may decide to simply hire more salespeople to increase sales. Without proper root cause analysis, they may hire older salespeople, just like the rest of the sales force they have. None of the true root cause problems get resolved because the team jumped to the solution with identifying the true problems needing addressed.
We all learn from our mistakes, what pitfalls to developing the Business Case have you encountered in your career?
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