What is Business Analysis in the 21st Century?
When I was a young developer, I worked on a project creating an application for a French insurance company. While working on that assignment, I read one of the company’s business rules:
“We charge a $2.00 fee for each new policy, extension, amendment, or cancellation unless the agent reduced the premium to match a competitor’s offer, or at the discretion of a senior underwriter.”
Unsure how to interpret the rule, I asked the company’s senior underwriter for clarification. That was the turning point in my career. Contacting that subject matter expert (SME) transformed me from a software developer into a business analyst (BA). With my wife Angela (who was that SME), I would spend the following thirty years defining, teaching, and practicing business analysis. But what exactly is business analysis?
Last Updated April 2022
Business Analysis Techniques for Discovering Requirements, User Stories, Features, and Gherkin (Given-When-Then) Tests | By Tom and Angela HathawayExplore Course
Business analysis defines the future of an organization’s capabilities
The business analysis process allows software developers to deliver the functionality the business community needs. Given that lofty goal, it is not surprising that business analysis has become a hot topic in the global marketplace.
Considering the complexity of modern digital solutions and business systems, this is not a trivial task. As a result, the skills needed to identify and define the best IT solutions are invaluable for every role in the organization. These skills can propel you from the mailroom to the boardroom by making an organization more effective and profitable.
Business analysis as a discipline is extremely broad and extensive
Business analysis deals with technology, people, project team issues, quality assurance, and process problems. Practitioners analyze business problems, determine business needs/requirements, and define the solutions for these needs. Common business analysis activities include improving business processes, creating a business case, eliciting business needs, analyzing requirements, recommending solutions, and often testing or validating the implemented solution.
Business Analysis comes in three levels of detail:
- Strategic Business Analysis
- Tactical Business Analysis
- Operational or Targeted Business Analysis
Strategic Business Analysis is the up-front work at the very beginning of a project or initiative. This level of business analysis is relatively methodology-independent because it has nothing to do with software development per se and is more related to project management. The only impact is how it expresses the outcome.
If a traditional methodology is in place, Strategic Business Analysis delivers business strategies, goals, and objectives and develops Project Scope and Business Requirements.
For an Agile SDM, Strategic Business Analysis defines the high level of the initiative or product in terms of Themes and Business Epics, which are less formal and postpone details until the developers need them. In either case, those performing this level of business analysis need a broad set of tools and techniques to ensure that the resulting projects and initiatives support the organization’s business goals and objectives.
During Tactical Business Analysis, the selected software development method will affect this level in two ways:
- Timing of Analysis
- Level of Detail of the Outcome
Fundamentally, Agile software development depends on Just-In-Time (JIT) analysis. The Product Owner, together with the business community, manages the Product Backlog and prioritizes User Stories in preparation for the next release. The Agile Team clarifies and estimates User Stories to be developed in the next release. This form of Tactical Business Analysis exists in traditional methodologies to ferret out Stakeholder Requirements based on the Business Requirements for the project.
Some organizations go down one more level to Operational or Targeted Business Analysis. That is the nitty-gritty detail that usually only concerns developers. It is also often called Systems Analysis and deals mostly with Solution Requirements or technical specifications.
Critical skills for the business analyst
Software developers need clear and verifiable IT Requirements to guide their programming efforts. Unfortunately, you can rarely look up the technological needs of a company. Most business or technical requirements are not documented anywhere. They exist only in the minds of stakeholders and in feedback that needs gathering from end-users. Therefore, requirements must be elicited, analyzed, communicated, and validated, all of which require a vast skill set.
Some traditional skill sets a business analyst needs are:
- Defining and analyzing business problems and opportunities
- Discovering (eliciting) business needs and stakeholder requirements
(i.e. textual, User Stories, Epics, Features)
- Analyzing stakeholder and solution requirements
(i.e. textual, models and diagrams, Use Cases, detailed User Stories)
- Developing acceptance tests
(i.e. Scenarios, Scenario Outlines, and Examples)
- Facilitating user story workshops or requirements meetings/workshops
Business analysis is a people-centered profession. Along with traditional business analysis techniques, soft skills are becoming increasingly critical to successfully performing BA work. The most important ones are:
- Communication skills (listening, nonverbal, presenting, and motivating, for example)
- Facilitation skills
- Conflict resolution
- Critical thinking and creativity
- Learning quickly
- Leadership skills
- Relationship forming
- Negotiation skills
Who does business analysis?
With the vast amount of knowledge that IT developers need and the growing demand for digital solutions, the challenge of creating high-quality business and stakeholder requirements is increasingly falling on the business community.
It is more and more the task of Product Owners, Product Managers, Project Managers, Business Analysts, Requirements Engineers, and business experts to create software requirements for digital solutions. Many people who have no formal training or relevant title often do business analysis.
The key to ensuring that business analysis is a positive force for change is that the people doing it have the appropriate skills and business analysis techniques to do it well. Whether those individuals have the job titles related to the business analyst position is a question for the organizational structure.
Two institutions for standardized business analysis
The International Institute of Business Analysis (IIBA) was founded in 2003 in Toronto, Canada. It divides IT requirements into Business Requirements, Stakeholder Requirements, Solution Requirements, and Transition Requirements.
While the first two types (Business and Stakeholder Requirements) relate to the business side, the latter two (Solution and Transition Requirements) are crucial for the technical teams and are very often specified requirements for engineers or developers.
In 2006, another institute was founded in Fürth, Germany. The International Requirements Engineering Board (IREB) focuses on correctly structuring and communicating technical requirements that drive the development of software. IIBA is widespread in the US, while IREB is more popular in Europe.
In 2020, the IREB and the IIBA signed a “Memorandum of Understanding” for the mutual promotion and further development of the disciplines of Requirements Engineering and Business Analysis as complementary approaches. This is helpful to all who deal with requirements in this field.
The true purpose of business analysis
Master political philosopher Niccolò Machiavelli — a historic figure who predates information technology by centuries — expressed one of the best reasons for doing business analysis. He observed :
“It must be remembered that there is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than a new system.”
People who define and design systems have a power that far exceeds their authority. As the ones defining future digital solutions for organizations, anyone who practices business analysis has an awesome responsibility for achieving big picture goals. This career should not be taken lightly.
Expand your business analysis acumen
If you are interested in a deep dive into business analysis or would like to become a business analyst, check out these courses available on Udemy:
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