What is business analysis? Definition, Introduction and Process

Technology and information in the last ages have significantly changed the way in which business management problems are solved. Now, more and more companies start seeing business analysis as one of the key elements that can hold a business together.




An experienced business analyst can bring a great value to a company through his/her ability to be the vital link between the information capacity and business objectives.

On this post:

  • What are business analysis and analyst? Definition and introduction.
  • Requirements and process.
  • Techniques.
  • An infographic in PDF for free download.

What is business analysis?

In short, business analysis main goals are:

  1. To define business needs;
  2. To provide possible solutions.

Well, it seems simple but in the modern enterprise world, those are quite of tasks.

The official definition is:

Business Analysis is a discipline and practice of defining business needs and recommending solutions to business problems. Business analysis deals with the current state of each company, desired future state, stakeholders’ needs, processes, software and more.

In one project, business analysis takes care about the project scope. A well-made analysis is the backbone of each project.

What is a business analyst?

The answer is simple – business analyst is anyone who performed business analysis activities.

You know that companies are profitable when can successfully manage projects that transform customer needs into valuable products and services.

This is where business analysts come to make it happens more effectively.

In other words, the business analyst’s most important goal is to help businesses fulfill technology solutions in a cost-effective manner.

Many organizations don’t have this job title but it doesn’t mean they don’t perform business analysis. For example, many project managers do business analysis on a daily basis.

Requirements

In order to manage and satisfy business needs one analyst deals with many requirements.

The answer of question “What is a requirement?” may differ. The most simple is: something needed to solve a problem or something needed by a solution to satisfy contracts, standards, etc.

Business requirements are the crucial activities that must be performed to meet the goals. Elicitation, managing, communication, verification of the requirements is the core of business analyst job.

So, there are a couple of types of requirements which are well accepted by the community and could be used as an introduction to the business analysis process.

  • Business Requirements–these are high-level requirements which come mostly from the customer, management, or sales. They are usually quite broad like a vision statement. It might arise from contract, business case, and market demand. Business requirements are a good starting point for discussion about possible alternatives.
  • Stakeholder Requirements – these requirements usually connect business need with particular stakeholder. They are a bridge between business requirements and detailed solution requirements. Stakeholder requirements are a great source for acceptance criteria for each project.
  • Solution Requirements – describes details of how the solution will meet business and stakeholder requirements.
    There are 2 major types of them:
    – Functional Requirements – they answer “What” question. For example, in a software project, functional requirements describe the “What” kind of features should be provided in order to achieve a useful solution.
    – Non-Functional Requirements – they answer “How” question. For example, how a system should behave with the environment as performance, security, stability, archiving etc.
  • Transition Requirements –they are temporary requirements which exist only during a transition from AS-IS state to TO-BE state. A classical example in a software project is the migration and everything related to it – roll-back procedure, data mapping, ETL processes, etc.

Business Analysis Process

Business analysis process has some fundamental steps needed for a successful execution.

  • Enterprise analysis

The most important part here is domain knowledge in the enterprise structure, internal processes, strategic goals, markets, competitors. In short, the business analyst needs to know his/her company structure and business.




A good business analyst can work in the area without domain knowledge. But in any case knowing the enterprise and its business is important.

The crucial focus here is in feasibility studies, maintaining business architecture, searching for new opportunities, creating business cases, and identifying initial risks.

  • Business analysis planning and monitoring

While enterprise analysis can be an ongoing process, usually planning and monitoring is related to a certain project.

Here, the business analyst should investigate the most important stakeholder, select techniques which will be used, defining the process of business analysis, change management. In short – this is the “homework” for the business analyst.

  • Elicitation of Requirements

In this step, the business analyst starts working with stakeholders. There are certain numbers of techniques for requirement elicitation. But the most important is that you need to stay focused on your stakeholders’ needs, not desires.

It is perfectly fine a stakeholder to say “I would like to do something…..in order to achieve a goal”. But it is not a good practice to allow a stakeholder to decide how his/her problem to be solved. It is too early for that and you can limit your future solutions if you allow it.

  • Requirements management and communication

Having a set of requirements is a good thing. But it is something common, the different stakeholders to have different needs. Or not have enough resources for all requirements.

That’s why managing requirements is one of the most important activities. So, the business analyst has some important tasks here:

  • A proper way to document the requirements;
  • An investigation for conflicting requirements;
  • Some expert judgments if requirements are applicable and achievable is highly recommended (especially for software project);
  • Requirement prioritization.

I could not stress how important is the requirement prioritization. This can save your day. If you have priorities, you can be sure that at least the most crucial needs will be covered.

Usually, stakeholders are quite resisting against prioritization. They also know that resources are limited and lower priority means less chance for fulfilling the requirements.

  • Solution Assessment and Validation

Once you have all the requirements analyzed, documented and confirmed, it is time to propose solutions.

The business analyst job is to provide a set of possible solutions with their pros and cons. Some estimations (high-level or detailed) can be very useful. Numbers are also welcomed.

Due to the process of solution assessments, the business analyst should be unprejudiced and impersonal. And should provide information about each solution in a fair and open way.

Usually, it is not a business analyst job to validate the selected solution. The customers, managers, PMs, Architects are the ones responsible for justifying the chosen solution.

Business Analysis Techniques and Competencies

There is a wide range of analysis techniques and we will have a separate article for them.

Anyway, the most important of business analysis techniques are:
  • Interviewing
  • Benchmarking
  • Process Modeling
  • Prototyping
  • Functional Decomposition
  • Document Analysis
  • Focus Group
  • Estimations
  • Brainstorming
  • Risk Analysis
  • SWOT Analyses
  • Observation
  • Key Performance Indicator
  • Non-functional requirement analysis
  • Decision analysis
  • Problem Tracking
  • Requirements Workshop
  • Structured Walkthrough
  • Root Cause Analysis
  • Scenarios and Use Cases
  • User Stories
  • Questionnaires and Surveys

Business Analyst Competences

There some basics fundamental competencies in the business analysis which are quite important and very useful.

The list below can be used for a starting point:
  • Analytical thinking
  • Creative thinking
  • Problem Solving
  • Decision Making
  • Learning
  • System thinking
  • Ethics
  • Trustworthiness
  • Business principle knowledge
  • Industry Knowledge
  • Organizational knowledge
  • Solution knowledge
  • Oral communication
  • Written communication
  • Teaching
  • Facilitation and negotiation
  • Leadership and influencing
  • Teamwork
  • Software knowledge

This was a basic introduction to business analysis. The area is quite new and very hot. The business analysis discipline is about to grow.




The article is influenced by BABOK (Business Analysis Body of Knowledge) which is the “Bible” for any practitioner.

More information for BABOK can be found on the site of International Institute of Business Analysis.

Infographic in PDF for free download: Introduction to Business Analysis

business analysis infographic

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