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What Is Business Analysis?

Feb 27, 2023

Whether working with companies, governmental organizations, or nonprofits, a business analyst (BA) helps organizations solve problems and improve the efficiency of processes, systems, products, and services. BAs perform research and analysis to design plans, find solutions, and recommend changes that drive value for stakeholders. Many of these solutions deal with software and digital, data-based components, some also incorporate organizational changes such as improving processes, implementing new policies, and engaging in strategic planning. 

Individuals working in this field can support an organization’s success by using their unique skills, including leadership, communication, and mastery of valuable, data-driven insights, to impact a company’s success. A competitive business landscape requires companies to take advantage of every tool and resource at their disposal in order to succeed.  

What Is Business Analysis?

A business analysis offers insight by collecting information and defining the needs of a business. Business analysts then recommend changes and offer solutions that produce value for stakeholders. BAs create an organizational model for the entire business/organization by identifying operational needs through in-depth analyses of targets and requirements.

Working with cross-functional teams to assess the current performance of an organization, analysts must understand the structures and policies of an organization before recommending ways to achieve goals. They often take the following into account:

  • Enterprise analysis: Analysts begin by identifying prospective business opportunities, assessing the development and maintenance of existing organizational structures, and determining optimum project investment. 
  • Requirement planning and management: A document typically created alongside the primary project plan, outlining the scope management process. Its primary purpose is to ensure that all stakeholder and business requirements are captured, analyzed, managed, and addressed in the project plan.
  • Requirement elicitation: The process of communicating and collaborating with key stakeholders to gather insight and identify the project's needs. 
  • Requirement analysis and documentation: The task of collecting, organizing,  and tracking project requirements from key stakeholders to ensure completion of projects with BAs taking on responsibilities including investigating business systems, evaluating the actions needed to improve the operation of a business system, and to document the business requirements for the IT system support using appropriate documentation standards.  
  • Requirement communication: The process of informing the project team, suppliers, sponsors, and stakeholders of the plan’s objectives. The goal is to gain a common understanding of the requirements necessary to complete an initiative or solution. 
  • Solution evolution and validation: Assess the value created by the solution, assign sufficient resources, or demonstrate the money or time saved by risk management. 

Business Analysis Techniques 

Analysis strategies can apply to many industries. From streamlining operations to defining a company’s purpose, business analysis methods identify an organization’s long-term goals and manage challenges that emerge along the way. Because markets are competitive and ever-changing, business analysts are valuable assets that help companies articulate and understand new needs and goals. Here are common techniques used by business analysts:

MOST (Mission, Objectives, Strategies, and Tactics)

The MOST analysis technique is used for goal setting at every structural level to ensure that a company’s most critical goals are reached. Each element of the acronym builds on and connects to the others: 

  • Mission: The organization’s enduring purpose. Other sections of MOST and their decisions are weighed against this mission. 
  • Objectives: What is needed for a company to accomplish their mission and follow “SMART” objectives (Specific, Measurable, Achievable, Realistic, and Timely). 
  • Strategy: Targeted steps to achieve objectives. 
  • Tactics: Small and efficient methods employees can use to carry out tasks toward a larger goal without having to necessarily understand the bigger picture. H3: SWOT (Strengths, Weaknesses, Opportunities, and Threats)  

This type of analysis offers an overview of a company and allows it to capitalize on opportunities, acknowledge weak points, and act on their strengths. SWOT is the foundation for guiding the questions businesses or teams ask when making decisions:

  • Strengths: What internal resources are currently in place? What does the company or individual teams do well? What are their advantages over the competition? 
  • Weaknesses: In what areas does the company compare unfavorably to its competition? What is lacking within the organization? 
  • Opportunities: What benefits can emerge from external opportunities or changes to the company?
  • Threats: What strategies is a competitor using that can be potentially harmful for an organization’s viability? Other threats may include an increase in supplier costs or dramatic changes in consumer behavior or the economy. 

PESTEL (Political, Economic, Sociological, Technological, Environmental and Legal)  

The PESTEL analysis helps companies assess the macro-environmental factors that can impact them either positively or negatively. As factors change, an organization’s PESTEL analysis may be changed or modified to remain relevant. This type of analysis is especially helpful for companies launching a new product, project or service. Each of the letters in PESTEL represents a different environmental factor: 

  • Political: Keeping track of local, national, or international politics and its potential impact on industry.
  • Economic: Identifying prevalent economic factors, which may include inflation rates, consumer purchasing power, interest rates, foreign exchange rates, and growth patterns. 
  • Social: Observing current and projected cultural trends, including buying and engagement patterns across generations. 
  • Technological: Evaluating innovations that will likely affect a company’s target market or industry. This includes automation, communication, or production of goods, products, or services. 
  • Environmental: Looking at the ways environmental factors play into a company’s long-term plans or goals, including sustainability and how climate can impact operations. 
  • Legal: Assessing what an organization needs in order to be compliant with the law, as well as evaluating pending legislation that may impact a company’s structure. 

Steps to Business Analysis

To gain insight into the development of the initial framework for any project, a business analysts follows the following steps: 

  1. Get clarity. Understanding what a business would like to improve or any problems needing to be solved. 
  2. Identify stakeholders. Stakeholders on a project make decisions and sign off on requirements and priorities. Knowing each stakeholder and how they impact the project is a critical first step in the process flow. 
  3. Define the scope of the business analysis. Establishing the business strategy and objectives helps business analysts and project managers stay focused on the goal and make course corrections along the way. 
  4. Create a business analysis plan. The business analyst and project owner put together a detailed timeline for delivering requirements. 
  5. Define the requirements. This step involves the business analyst gathering and analyzing data and dividing the requirements as functional or nonfunctional. 
  6. Support the implementation. A business analyst is involved in the technical implementation of requirements, making sure that everything aligns with the plan created. Feedback from the development team is provided to facilitate requirements and manage changes. 
  7. Research the value provided by the solution. Evaluate the actual progress across the timeline and assess whether the solution delivers the value initially anticipated. 

Becoming a Business Analyst 

After graduating with a bachelor’s degree in business management, an entry-level  business analyst can earn an average salary of $77,218 per year. The U.S. Bureau of Labor Statistics (BLS) projects a rate of job growth of up to 25% between 2020 and 2030. At WGU, business students experience a competency-based degree program designed with input from industry experts to teach real-world skills in core topics such as finance, accounting, marketing, and economics. 

Explore the online bachelor in business management degree at WGU and discover the first step to a lucrative and dynamic career as a business analyst. 

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