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A Comprehensive Approach to Business Analysis
By Pat Weidmann, Senior Consultant at Navigator Management Partners
In a frenetic world of buzzwords and trends – Cloud, SaaS, PaaS, Big Data, Agile, Internet of Things, etc. – sometimes the fundamentals can get less attention than they deserve. This article will talk about the continuing importance of “Big B” Business Analysis and those who perform this critical role, the Business Analysts.
Why is it still so important? It’s fundamental to answer this simple question: How well are we doing? The question can be examined from three vantage points: operational, tactical, and strategic. A retail manager’s
analysis causes a reaction to swiftly move products to ensure high turnover rates, leading to higher sales revenues. The director of product development’s
analysis may lead to a rapid response to managers to improve go-to-market strategies or increase customer satisfaction. Or a Chief Operating Officer’s
analysis helps steer the overall operational objectives while envisioning the next wave of innovation to differentiate her company from its competition.
In all of this, the role of a Business Analyst (BA) is central. This BA role has evolved with new frameworks, methodologies, tools, and techniques to keep pace with a growing global marketplace and disruptive technologies.
In most cases, when applying the discipline of Business Analysis to answering the question, “How are we doing?” there are generally two approaches involved. The rest of this article will discuss those two approaches in more detail.
The Top-down Approach:
In this approach, the Business Analyst first focuses on the organizational targets to accomplish its mission and vision. For example, a corporate goal might be to educate, invest, or retain to provide learning, financial, or customer value. Its objective is to improve, increase, strengthen, reduce, or enhance the purpose of the services or products it provides. These targets and goals are the strategic objective statements of the organization.
With clear strategic objectives, the analysis continues to the examination of capabilities. Capabilities are a description of what needs to be performed and managed, not how it is accomplished. Does the organization have resources with the collective skills and expertise to achieve its core objective? An assessment of capabilities can reveal the capacity of the organization to achieve its vision and goals. For example, if the mission is to educate, is the educational institute able to meet accreditation requirements - the assurance of quality and adherence to academic standards?
An organization’s ability to fulfill its objectives depends on a shared understanding of its critical success factors. How an organization ‘measures-up,' how it knows it is meeting the goals of mission and vision is gauged by factors such as the effectiveness, efficiency, and viability to succeed. Success factors represent the final element of the top-down business analysis approach.
The alignment of strategic goals, capabilities, and critical success factors encourages an organization to improve, innovate, and enhance value continuously. A gap or a weakness in the top layers of alignment would precipitate the need to dig deeper into the causes.
The Bottom-up Approach:
In the Bottom-up Approach, the analysis begins at the functional level (Finance, Human Resources, IT or other supporting core capabilities, such as Marketing, Sales, etc.) of the organization. For example:
The solution module or process framework, such as APQC (American Productivity & Quality Center) anchors the scope of the business analysis effort.
The functions of finance (such as accounts payable) are broken down into sub-areas like vendor master records, vendor payments, payroll, etc. to form a framework for process decomposition and modeling.
Functional requirements and current state process flows are assessed to determine what's working, what should be working, and what's not working, and if an investment is warranted.
What materializes is an end-to-end operational view and cross-business-unit dependencies. The analysis gets to the root cause of the activities of the organization's processes and if technology provides the fix.
What if the technology is not the answer? What if the technology is functioning as intended and the resources lack the requisite skills to perform? What if the activities are no longer required because it no longer meets the capability of the organization? What if the organization has taken a new direction and the entire business unit is no longer viable? What if the current process is sound and efficient, yet it no longer aligns with the strategic direction of the organization?
Business problems are uniquely complicated. The scope can span from enterprise-wide to a single work group, while the complexity can transition from a pure process understanding to full-scale process optimization or re-engineering effort. A comprehensive analysis presents a more precise view of the organization. Decisions concerning organizational change, IT investments, and the need to re-engineer processes are now in the context of the objectives and goals of the organization's mission and vision.
In all of this, the value and importance of Business Analysis remains high, as does the critical role of those who peform that analysis, the Business Analysts.
Talk to one of our BA experts today!