What is a Business Analysis?
In an era where technological advancement is happening faster than ever, businesses need to constantly find new ways to improve business processes and employ the best practices to remain relevant. As software-based solutions have become the go-to for any business problem, one key to increasing revenue and clientele lies in understanding what exactly the pain points in a particular business and how best to solve them with cost-effective techniques.
This is where Business Analysis comes in. Business owners and managers who overlook the importance of implementing business analysis lose the opportunity to mitigate risks that affect business success. Unfortunately, a large number of businesses often fail within a few years because of the lack of business systems and the guide business analysis provides.
As the scope of business analysis is broad, here is a full overview of what exactly business analysis is, covering definitions, benefits, steps in the business analysis process as well as methods of business analysis.
Business Analysis Definition
In essence, business analysis enables a business achieve goals and objectives through the identification of the organization's problems, and need for change. One of the key roles business analysis plays in the success of a business is facilitating change in the organization and providing solutions to any business need.
As business analysis cuts across all levels of the business, specialized knowledge of the business process, strategy and planning is required to execute business analysis. The business analysis process is often treated as a project, hence project management and the business analyst career go hand-in-hand. However, it can also be a continuous process especially as businesses consistently need to grow and expand.
One of the objectives business owners have in common is increasing profit. Hence, the ultimate goal of business analysis is to enable a business minimize cost, maximize profits, identify new opportunities for growth and implement proven strategies that will help business managers achieve set objectives. This can be done in various ways including product or software development, project identification and execution, or policy and model development.
Benefits of Business Analysis
The business analyst job title is broad, hence the benefits of business analysis are numerous; however, they are not as obvious as they seem. Furthermore, several business players are not aware of the comparative advantages of using business analysis instead of carrying on business without proper strategies to solve business problems.
The benefits associated with business analysis include but are not limited to-
1. Understanding business problems- Identifying current business problems may be the easy part, but having an in-depth understanding of these problems, what caused them, and how they can be mitigated is a unique benefit of business analysis.
2. Value addition- Besides getting to the root of business problems, implementing business analysis helps to deliver value to the business process. Ultimately, business analysis activities maximize the value a business can provide to shareholders and customers as the business gains an edge over competitors.
3. Strategizing and providing solutions- Business analysis provides a goal-centric approach to creating strategies.
4. Lowering business risk- All businesses face risk, and as such, businesses must be protected from unreliable recommendations and solutions by technical experts in the organization. The business analysis uncovers such recommendations to ensure solutions that are likely to fail are not implemented in the first place.
Steps in Business Analysis
The business analysis process can be broken down into five simple steps-
1. Pre-Analysis orientation
This step requires the business analyst to understand business needs, existing systems, business processes, and the project scope before carrying out any high-level analysis of the business.
2. Identification and management of business requirements
Once the pre-analysis activities have been carried out, the next step is to clearly define business objectives and the project requirements business owners have in mind. This role business analysts play involves identifying detailed requirements and expectations of the business from shareholders, customers, employees, and other stakeholders.
3. Analyzing and documenting requirements
This step serves as the backbone of the business analyst job. Here, the methods and tools needed to carry out analysis are clearly defined. Other key responsibilities include the structure and outline of possible solutions to business problems being analyzed and developed.
4. Communication of analysis
Before any solution is agreed on and implemented, the business systems analyst must communicate the analysis plan to the stakeholders of the business and obtain approval.
5. Evaluation of solutions
Finally, identified solutions are assessed for alignment with core business objectives and the requirements project managers initially defined. In essence, the business analyst role is incomplete if the solutions do not comply with the initial goals of the business.
Techniques in Business Analysis
The top business analysis techniques include-
1. MOST- This stands for Mission, Objectives, Strategies, and Tactics, and involves the systems analyst using the internal analysis to procure strategies.
2. SWOT Analysis- SWOT is short for Strengths, Weaknesses, Opportunities, and Threats. As the name implies, this technique analyzes a business's strengths, weaknesses, and threats to maximize opportunities.
3. Six Thinking Hats- These are thought processes that can be used by business analysts and are categorized by color, namely
- White hat Facts and information
- Blue Hat Control and focus
- Green hat Creativity and new ideas
- Yellow hat Optimistic point of view
- Black hat Pessimistic point of view, critic and judgment
- Red hat Emotions and intuition
5. CATWOE- This is short for Customers, Actors, Transformation Process, World View, Owner and Environmental, which highlight the activities likely to be affected by a business' actions.
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