The business case for business analysis

Systems and processes are integral to business today but are still difficult to implement successfully. Successful processes and systems are those that meet the business requirements. Businesses utilise these technological and intellectual assets to create value for themselves.

Performing analysis upfront ensures the business requirements are met and ensures the success of a project/integration, while also saving costs over the lifespan of the system.

Although analysis is intuitively necessary, it can still be difficult to justify because it is a means to an end rather than an end in itself. Stakeholders are hesitant to invest in analysis as there is a risk that the project will be terminated after the analysis phase.

This could be due to a variety of possible reasons and lead to the perception that the effort and cost was wasted. Such an early termination is precisely why analysis should be carried out - to prevent spending much more on a poor quality solution that will not be used effectively. This is the case for analysis of the business needs and proof that it will reduce the risk of failure and the total cost of the solution.

The objective of good business analysis is to ensure that businesses realise the full potential of their project initiatives. When optimising processes or implementing systems, the associated business cases will set out the cost versus benefit analysis with the benefit being that which the business is trying to maximise. The obvious issue that arises is whether, by investing in analysis, the business is raising the costs in greater proportion than it is raising the benefits.

Ian Munro, BSG, Head of Business Solutions, JHB, says that while you may potentially be raising the costs in the short-term, or for the duration of the project, you are, in effect, raising the benefits over the longer-term of the business so that the benefits will outweigh the costs. Munro says the benefits of a system which is fit for purpose and thus supports the fundamental drivers of efficiency, improved customer service, cost containment, etc, are tangible, while maintaining a system which has bugs or which is not fit for purpose has a significantly higher cost due to the constant need to fit in new requirements which were not originally identified.

In the past, there has been substantial focus on good business analysis reducing long-term costs. Little attention has been given to the long-term benefits that investing in good business analysis brings. So how does business analysis maximise benefits for organisations?

Munro states that identifying requirements and possible areas and methods of improvement in a project, upfront, has huge benefits for a business. Quality business analysis performed at the outset of the project has the potential to uncover business opportunities that could have been missed had the analysis not been performed or performed poorly.

A typical example that Munro uses is that of an optimisation of human resources processes. A project sponsor would initiate a project to optimise the HR processes of the business, highlighting the hiring and retrenchment processes. The business analyst would delve into the detail behind these processes but if the analysis is poor or undertaken without a broader context, would only address the hiring and retrenchment processes. The analyst may then suggest an off-the-shelf package to address hiring and retrenchment alone, resulting in a further 'silo'd' technology investment. Good business analysis would identify that there is potential re-use of an HR package in other areas of the business and interfacing certain functions would result in greater efficiencies and more value for the business.

This is how quality business analysis maximises value for organisations. A pertinent question is thus, what is quality business analysis.

Academic material provides exhaustive lists but Munro states that these can essentially be grouped into four major high-level areas, namely completeness, accuracy, audience management and requirements management.

Completeness refers to addressing not just the problem at hand but extending the focus to all areas that could have an impact on or could be impacted by the change. For example, if for instance a company was reviewing its human resources processes and these included recruitment and retrenchment, incomplete analysis would consider only the recruitment and retrenchment processes. Complete business analysis, on the other hand, would at some point in the process, reveal that possibly the promotions and employee retention processes should also be considered in the analysis. Incomplete analysis looks only at the highlighted issues rather than including the peripheral issues that could be affected. For this reason, BSG advises its clients to allow BSG to carry out a scoping exercise, to highlight all possible dependencies as this is valuable, even if client based scoping has already been performed.

Accuracy is a core determinant of quality and is thus an essential component of good business analysis. Completeness and accuracy rely on working in analysis teams to brainstorm and check outputs thoroughly. BSG's practice is to send no less than two analysts on a project to ensure completeness and accuracy.

Audience management involves managing stakeholders and their expectations, and ensuring that the requirements are documented in formats that are easily understandable. There is a fine line between understandable and pedantic, however.

Munro says that merely writing everything on paper can lead to ambiguities and misunderstandings on the systems side, so much so that the representation of the analysis has the potential to render the analysis poor, when actually it isn't. Representation and communication are therefore pivotal factors to consider in audience management. Broadly speaking, requirements need to encompass all aspects in order to be complete, they have to be accurate and to the correct level of detail, and then they need to be communicated effectively to a varying set of stakeholders, from business owners to technical implementers.

Requirements management, also known as analysis management, results in, as Munro puts it, bi-directional traceability among all the requirements. When a change in a process occurs, it allows analysts to understand what else will be affected and how cascading analysis changes through all aspects of the business functions, processes, technologies, etc, being analysed will result in the design of a robust business solution. A support function to these four high-level areas would be project and change management across the entire initiative. This is the high-level view of what good business analysis entails.

To test the definition, BSG conducted a study with one of its clients, a specialist finance company. The study aimed to identify the value business analysis brings to a project by mapping the total spend on a project utilising business analysis against the statically estimated total spend on the same project without proper business analysis. When viewed over the lifespan of a successful system implementation, the analysis cost is a small percentage of the total cost as the graph, below, from the BSG study depicts.

The graph above shows that the cost of analysis, when performed correctly, is 5% of the total cost of the system over its lifetime. The only significant maintenance done on the system was to add enhancements in year four, including upgrading the database management software to a newer version. Maintaining low support costs was possible due to complete, accurate analysis which managed stakeholders' expectations well.

The graph below illustrates the difference in total spend on a project based on average cumulative monthly costs, with and without analysis. The magenta shaded area represents actual cumulative spend on the project by BSG's client and the blue shaded area represents the deviation from the industry benchmark for standard implementations without effective analysis, ie the cost savings. This clearly illustrates that although quality business analysis requires an initial investment, the return is far greater over the lifespan of the implementation. This is both in terms of cost savings and benefits maximisation.

"Benefit maximisation is more difficult to track in terms of quantitative data," says Sandra Rheeder, BSG, Head of Business Development, before explaining it by way of an example from a project BSG had previously worked on. BSG had been contracted by the branch channel of a large financial client planning to launch a new value-add product to their customers. The client was unable to target these prospective customers through the existing base and was proposing to develop a new system in which to store the data of the customers who had applied for it.

BSG's quality business analysis uncovered that the problem was the client did not have the ability to see consolidated views of their customers' information and had been storing their customers' data in different product-specific databases. This silo'd approach has resulted in poor customer service ratings. The client was unable to properly research their customer base and draw trends from it. BSG's analysis uncovered that there was no need to purchase or develop an entirely new system. The solution put forward and implemented by BSG was to integrate the existing systems and data stores and clean up the customer data. The result was that the client was able to identify who to target with their new value-add product and was better able to launch the product through the branch channel.

Additionally, the client was able to gear up for launching the product through other channels and was in a better position to take on the challenges of FICA compliancy. This would become more relevant to the client in due course. Rheeder says there are numerous examples like this where business analysis conducted to address a particular issue has resulted in it uncovering peripheral issues and potentially providing a solution to them.

Measuring benefit maximisation is difficult because of the qualitative nature of the proof but the example clearly illustrates how quality business analysis leads to the maximisation of benefits, encourages reuse of systems, concepts and processes and provides cross functional leverage.

BSG has dedicated itself to constantly delivering quality analysis to its clients, but what is it that makes BSG different from its competitors? BSG's philosophy is that a good business analyst requires a combination of skills that mainly fall under two categories: core skills and soft skills.

The core skills consist of analytical thinking, project management, interpersonal and communication skills, contextual knowledge and technological knowledge, including analysis methodologies. The soft skills include productive beliefs, values, behaviour and attitudes. A BSG business analyst should be able to play different roles in different environments, and because of this it is important that the business analyst is dedicated to the disciplines required and possesses a number of skills that come from both the core and soft skills categories.

Munro states that BSG's success in business analysis comes down to the type of people that BSG hires. Following a rigid recruitment process comprising of culture-fit role plays, case study development and general competency and background questions, BSG has ensured that only the best of the best are able to progress through the system.

Gillian Veldsman, BSG, Head of HR, says that BSG's people have extensive information systems knowledge and have the correct training and capability to conduct analysis. That in itself goes a long way to ensure BSG is delivering a quality product.

Munro adds that the huge focus on growth and leadership at BSG, the varied exposure that the BSG analysts get to different clients' projects rather than working in only one environment, and the values fit with the BSG culture of all employees, has led to BSG positioning itself as a deliverer of quality business analysis.

BSG consultants are challenging the perception of consultants everywhere. There is a general belief that business analysts, and consultants in general, are prone to developing and delivering high-level presentations that do not delve into the detail of the problem. BSG business analysts have a strong delivery focus and as such, familiarise themselves with the detailed aspects of the system or process and deliver solutions that address these at this level.

There is a strong focus on growth and leadership at BSG to facilitate business analysts performing at the expected level. BSG's lead analysts are PRINCE2 certified and all projects are run according to this methodology. Heather Drummond, BSG, Head of Projects Office, says: "We have a UML-based analysis methodology, wrapped by a project management and planning methodology. Our templates have been designed to create focus and guide our consultants through their business analysis. Quality reviews are part of standard BSG delivery. Through its leadership philosophy, BSG has also developed large support networks so, when problems do arise, there is always a panel of experienced analysts from which to get advice. There is also a strong focus on mentoring at BSG, with well defined mentoring and team lead structures developed to ensure analysts deliver a quality product."

Quality business analysis is crucial to a project realising its full potential. Without this preliminary phase, on-going maintenance costs on systems will cause the overall cost of the project to be substantially higher than if business analysis had been invested in. Additionally, quality business analysis has the potential to help the business maximise the long-term benefits of the solution as additional requirements, changes and improvements can be identified upfront in the initial analysis. It makes good business sense to invest in good business analysis both from a cost savings perspective and from a future - benefit perspective.