How Business Analyst defines a "business need"?

Here is the short blog on how to how to define the Business Need (either a problem or an Opportunity)

These high level guidelines or parameters will help business analysts defining their Business Needs.

Understand the business:

1.1 Business definition:

Business definition consist of analysis of following information:

1.1.1 What is the 'Entity Type'?
you need to define if the is proprietary or Corporate or Public Limited or Cooperative or Government…
You need to understand what are their governance standards  (such as tax, regulatory process) and requirements. and do they impact on your business need in anyway?

1.1.2 What is the Business Domain?
Is it agriculture or Service, or Hospitality or Defense or  Health Care or Banking or retail or manufacturing, or logistics and so on...

1.2. Products and Services:

1.2.1. Organization Structure (organization units and sub-units and how they are connected to main entity/Head office. People and their association with these entities and their role and position in the organization hierarchy)

1.2.2. Management and its culture (Democratic, lean management, hierarchal, traditional, modern….) Quality policy and standards, quality management process, values and beliefs

1.2.3. Clients, customers and the market: To understand their background and the special needs

1.2.4. Operations and legal and compliance requirement: How the products and services are reached to the end customers?

1.2.5. Organization goals: Long term and short term goals

1.2.6. Core competence: Products and services and other issues. Why these are better selling products compare to their competitors.

1.2.7. Competitive stance: who are competitor and comparison with competitors

1.3. Industry Standards 

  1.3.1 Current Industry Benchmark

  1.3.2 Current and potential future trends in the industry

1.4 New regulations

All these information and data is very useful to analyze the business in comprehensive manner. Without this analysis, the Business Analyst cannot provide the correct business solution that is appropriate the organization.

1.5 Background of Business Need (problem/opportunity):

When we identify the problem or the opportunity we have following area to work on:

1. The Record the problem or opportunity area.

2. Source of the problem or the opportunity:

3. Background of the problem: How it has arisen? Or how the opportunity has been generated.

Impact analysis or identify business value or Business Impact Analysis (BIA):

4.1. Area (department, functions): which part of the organization or which functions are getting affected with business need. For example, the problem is in retrieving sales data for retail chain store, check if the problem is in one region or it is across the region. Or it could be one ‘field’ or some more fields.

4.2. Stakeholders: Who (role – user or customer, signing off authority) are getting affected directly or indirectly? Are there more number of stakeholders is getting impacted with the problem or opportunity. The nature of impact needed to consider before the business need is fully defined. Pls refer stakeholder analysis in planning phase for more details.

4.3. Business Operations: where the impact is? One process or entire business processes are affecting? Is it industry wide impact (example. Change in service tax may affect the pricing and accounting process of the organization. Whereas, implementation of Basel II and Basel III would affect entire banking industry irrespective of size or location).

The best way to approach the problem is to complete the “Gap Analysis” where current business processes are compared against new (required) business processes and the organization’s current and future capability required implementing the same.

5. Financial and non-Financial impact of proposed solution

5.1 Will it increase revenue?

5.2 Will it decrease expenses?

5.3 Will it bring in new customers?

5.4 Will it bring in more money from existing customers?

5.5 Will it improve employee moral?

5.5.1 Not all the problem solving will result into business value such as financial and brand value. Sometime, resolving problem may result into improving the process that result into making things easier for employee in performing their daily work. Repeated work, instant access of data to make decision, decision support system.

5.5.2 Redundant process or lengthy or cumbersome process can be improved to make employees easy to do their daily work without unnecessary hurdles for additional approval or so on. This may result into improved employee moral with additional challenging project/work in their professional life.

6 Brand and image impact: problem within existing products or services or problems related to customers or problems related to operations ie delivery of products / services to the end customers.

6.1 Will it increase shareholder/taxpayer value? Increased customer satisfaction or improved products of services may result into increased revenue. Reduced operations cost could result into increased revenue. Both the cases, there will be direct or indirect impact on shareholder value.

7 Policy, Legal and compliance

7.1 Any new compliance or policy change may result into change in exiting operations or need for new business operations. Either way it may result into need of new business systems.

Once you analyze the business need on above parameters, you will have an understanding of business need and it's impact on the business. This analysis will support the stakeholders to make a decision - go/no-go.

More details in next blog - how to create a business need documents using these parameters and support the solution scope.

Reference:

http://www.uie.com/articles/business_value/