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Business analysis: to analyse or not to analyse... that is the question


Johannesburg, 26 Oct 2016
Sochin Technologies, Daniel Gombe, CEO
Sochin Technologies, Daniel Gombe, CEO

While it is a given fact that the use of IT systems is an important competitive element in many industries, as the use of technology greatly improves the efficiencies, what may be less known is that the rate of failure in implementing such technologies is usually quite high and very often costly, some devastatingly so. "Large IT efforts often cost much more than planned; some can put the whole organisation in jeopardy." (www.mckinsey.com)

It is therefore not surprising that the following holds true:

1. Fifty-seven percent of projects fail due to a breakdown in communication. (Spikes Cavell)
2. Less than a third of IT projects are successfully completed on time and within the budget. The average cost overrun is 27%. (Harvard Business Review)
3. Thirty-nine percent of projects fail due to lack of planning, resources and activities. (Spikes Cavell)

McKinsey's findings paint an even gloomier picture, stating that the findings of its research reflect the sentiment shared by both Spikes Cavell and the Harvard Business Review, but add an additional dimension. Very often, the IT systems projects deliver 56% less value than predicted. Furthermore, "17% of IT projects go so bad that they threaten the very existence of the company", as they turn into "black swans" with budget overruns of more than 200%. (www.mckinsey.com)

A critical success factor that is often overlooked when projects are undertaken is business analysis, the "practice of enabling change in an organisation, by defining needs and recommending solutions that deliver value to stakeholders", as defined by the International Institute of Business Analysis. This enabling change process is true across all economic sectors, and especially more so within the IT sector. An effective business analysis approach will maximise the chances of IT projects delivering value on time and on budget.

McKinsey identifies four groups of issues which cause the most project failures. These are depicted in the table below.

Source: McKinsey-Oxford study on reference-class forecasting for IT projects.
Source: McKinsey-Oxford study on reference-class forecasting for IT projects.

The factors above are overcome by an effective business analysis approach. Organisations must look at the business analyst as an agent of change, whose main objective is to articulate the business requirements and facilitate the business changes and therefore deliver value to all stakeholders; this, while remaining agile and adapting to shifts in the same requirements.

The world, through technology, is changing rapidly, and so must the business analyst's approach to IT projects. Charles Darwin noted the most successful species are not necessarily the most powerful ones, but rather, those that most rapidly adapt to whatever nature throws at them.

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Sochin Technologies

Daniel Gombe, CEO of Sochin Technologies, believes it is imperative for every business to begin with a business analysis phase before commencing with an IT project, and to that end, Sochin Technologies offers end-to-end solutions through its robust business analysis process. Sochin Technologies' approach, says Gombe, ensures all project requirements and deliverables are clearly identified at the beginning of the project and can thus be delivered in a timely manner using an agile and flexible approach, which adapts to cater for unforeseen changes as they occur during the project life cycle.

So, to analyse or not to analyse is the question that companies need to answer if they are to remain relevant and perhaps overcome the "slings and arrows of outrageous fortune".

Contact Sochin Technologies, +27 11 675 7318, before embarking on your next IT project.

Editorial contacts

Daniel Gombe
Sochin Technologies
(+27) 11 675 7318
daniel@soit.co.za