Have we mis-identified the core purpose and value proposition of Business Analysis?

I have recently found myself wondering if we have fundamentally mis-identified the core value proposition of business analysis, or if my view of the issue is skewed by past experience?  So I thought I would lay out my thoughts and see what others have to say.

First, let’s look at the IIBA definition of business analysis from the BABOK v3:

Business Analysis is the practice of enabling change in an enterprise by defining needs and recommending solutions that deliver value to stakeholders.“[emphasis mine] [1]

And while we’re at it, let’s check the PMI definition from their recent Business Analysis Practice Guide:

In short, business analysis is the set of activities performed to identify business needs and recommend relevant solutions; and to elicit, document, and manage requirements.[2]

Since the PMI definition is virtually identical other than tacking on an explicit function around requirements, let’s use the IIBA definition from here on.

The first thing I take from the definitions is that both the IIBA and PMI seem to identify the core purpose of Business Analysis as being the practice of defining needs and recommending solutions.

But what is the core value proposition of Business Analysis?

The words “that deliver value” could be read in two ways, in my opinion.  Do we read the emphasis as “by defining needs and recommending solutions that deliver value“, in which both the need defined and the solution can deliver value to the stakeholder?  Or should we read the emphasis as “recommending solutions that deliver value” in which the value lies in the solution that is recommended?  Given that so much of the perception and discussion of Business Analysis revolves around solution requirements, I would say that the community seems to take that latter view that the core value proposition of Business Analysis lies in the solution delivered.

This is somewhat supported by the IIBA definition of value which is:

The worth, importance, or usefulness of something to a stakeholder within context.

Value can be seen as potential or realized returns, gains, and improvements.

The first part of that has no relation to “solutions” as value, and indeed it just states that value is found in “something” by a stakeholder.  But the second sentence at least seems to imply that value is realized by at least the identification of a specific change, or more likely an implementation of that change.

This idea seems to be supported by other BA’s where much of the discussion of “delivering value” focuses around “delivering the solution”.  I’ll pick on Laura Brandenburg as an example of this and use a post on her web site titled “How Does Business Analysis Create Value?” as an example.  In that post she presents this formula and states: [3]

Return on Investment = [Value achieved through the solution] – [Cost of the solution]

As business analysts, we can impact both of these variables. We can increase the value achieved through the solution to the business problem and our activities actively reduce the cost to implement the solution.

Additionally, this concept of value being realized only through implementation of change is further seen in the focus of Agile methodologies on functional code being the primary metric by which business value delivered is determined.

However, this mindset that value lies in the solution has implications.  One of the main ones is that all of the activities that come before needs identification and solution definition are treated as sunk costs with little or no value.  They are merely precursor steps that happen before actual value is achieved by “defining needs and recommending solutions”.  As such, I’m sure I am not the only BA who has a hard time convincing stakeholders that allocating time to current state analysis is time well spent.  Or who hears statements like “you’ve been working with the business for X months, when are we going to start delivering a solution so that we can show value from your time?”

But what if this belief that the primary value of Business Analysis lies in the delivery of a solution is wrong?

Let us explore this question via the following scenario:

You work as a BA at a large conglomerate like Berkshire Hathaway that engages in many types of business and which is known for a decentralized management and operational structure amongst its subsidiaries.  Now, after 15 years as a separately-managed entity one of the smaller subsidiary businesses is going to be merged into a much larger business unit due to market changes and the retirement of several key executives.

You and several other business analysts are sent to work with this subsidiary in order to:

  • Identify all business capabilities, organizational functions, and structure
  • Identify and map all current business processes
  • Identify and document all business rules
  • Identify all software applications in use, their status, functions, and use
  • Identify current business problems (NOT needs, NOT solutions, just problems)
  • Analyze the current competitive environment the business operates in
  • Identify several likely future changes to the competitive environment, their likelihood, and potential reactions of competitors to those changes

You and your fellow BA’s spend a number of months doing all of the work above.  You analyze and assemble all of the information that was learned into a variety of consumable outputs for use by staff of both subsidiaries (“acquirer” and “to be merged”).

 

Given that scenario, the question I ask is “Have you done Business Analysis?” as it is currently defined?

You might say that this is basic current state analysis and of course it’s business analysis.  But in the scenario above you have neither identified any needs nor identified any potential solutions.  So is it business analysis as the community seems to have defined it?  My answer is that based on the community definitions above you have NOT done business analysis.

Now let’s ask the harder question, “Have you provided value?” as it is currently defined?

This one is harder, but at first glance since you have not delivered any solution, or even identified any needs or recommended solutions the answer seems to be no if evaluated by the metrics the community seems to be using at the moment.

But in my opinion both of those answers are wrong.

I would instead like to argue that the primary value of business analysis lies not in the identification of needs or recommending solutions; but in the provision of actionable knowledge to decision-making stakeholders of the current business, its environment, and the problems it is experiencing.

That decision-making might include initiating efforts to identify potential changes the organization might make.  It might include decisions that initiates process or technology projects to actually implement change.  It might include decisions to re-do strategic planning exercises based on information provided.  Or they might include a decision to do nothing because the information provided makes that a reasonable decision to make.  But none of those decisions change the value of analysis that was done.

If there is a decision to move forward with identifying change options or to move forward with a specific change, then that knowledge the BA assembled can be used to define needs and recommend solutions, but it does not lack substantial value without those steps.  Indeed, without that current knowledge the identification of needs and solutions is problematic at best.

I would instead argue that the primary value of business analysis lies in providing all of the following to decision-makers:

  • An outsiders view
  • Decision-maker time not spent on gathering and analyzing the information the BA has
  • Higher-quality inputs to the decision-making process
  • Greater decision-maker awareness of the organizational environment and changes

The item in bold is one of the greatest values I see that never gets discussed.

“Needs” will come from strategic choices made by decision-makers based on the environment.  They don’t arise out of the organization or even out of the environment, they arise from decisions the organization makes.  The BA can then have a substantial role in identifying and refining the needs that arise from decisions, but most of the work should be around refining needs and determining the operational factors of those needs.

What I do know is we currently seem to drastically underestimate the value of current-state analysis, well-thought out future state scenarios, and the benefits having that information bring to organizational decision-makers.

I don’t know how many times I’ve heard from senior stakeholders how much they liked the outputs of current state work because “it enabled me to see what we do in a holistic way” or “… in a new way”.  Or how much value they got from efforts to identify business problems, even before we got to identifying “needs”, just because it gave them a much better picture of the environment they are operating in and enables them to make better decisions.

I would argue that the Business Analysis community may want to re-orientate on a definition of Business Analysis that focuses on analysis itself and less about project-oriented outputs of analysis like needs, requirements, and solutions.  Maybe we can adapt something from the definition of Intelligence Analysis below that comes from Wikipedia?

… the process of taking known information about situations and entities of strategic, operational, or tactical importance, characterizing the known, and, with appropriate statements of probability, the future actions in those situations and by those entities.[4]

The ability to provide a strongly analyzed “outsiders” view of an organization or problem to decision-makers should not be undervalued.  Nor should the massive time saved by decision-makers by having a BA do that work.  Unfortunately, I think both are values that the Business Analyst community currently ignores outright with the current definitions and statements on what business analysis is and how it delivers value.

Yes, defining needs and recommending solutions are important.  But are they the primary function of Business Analysts?  Are they the primary way we deliver value?  Are they even possible to do well without the identification and analysis of organizational and environmental conditions we currently seem to undervalue so much?

I don’t disagree at all that they are important functions that Business Analysts provide, but are they core of what we do?  Are they the only way we deliver value, which seems to be the current consensus of the community?

I would argue that virtually every major problem identified as a “requirements issue” can probably be traced back to a failure to do enough current and future state analysis before a desired change was identified, let alone initiated.

  • Missed requirements?  A gap between current and future state.
  • Incorrect prioritization? A less than clear understanding of the desired future state.
  • Wrong solution?  A sub-optimal change was selected due to incomplete or misunderstood current and future state analysis.
  • Product Owner taking “too long” to answer critical questions in an agile project?  Not enough knowledge of the current state and desired future state.

We seem to really undervalue the time, effort, and results that go into “enterprise analysis”.  That is the complete understanding of the current state, the likely environment changes, the desired future state, and the identification and root cause analysis of the problems that block our ability to achieve that future state.

What do you think?

 

References:

  1. IIBA BABOK Guide, v3.  Pg. 2.
  2. PMI Business Analysis for Practitioners. Pg. 3.
  3. How Does Business Analysis Create Value?“.  By Laura Brandenburg.  Bridging the Gap.
  4. Wikipedia: Intelligence Analysis.

 



© 2016 by David Olson

4 thoughts on “Have we mis-identified the core purpose and value proposition of Business Analysis?

  1. Rahul Ajani

    Several solid arguments, buddy. I don’t think anyone can or should ignore the points you made. And I believe, as you pointed out, we need to redefine business analysis. Probably this also has radical impact on BACCM. Most importantly, the ‘change’ is not necessarily required to add value. As you pointed out, we provide actionable knowledge which may sometimes facilitates a simple decision like “the change we thought was good is not worth it – let’s do nothing”. And yet we added great value by facilitating this decision-making. I am glad I read your article, David.

    Reply
  2. Rahul Ajani

    And one more thought, the word ‘enable’ in the definition (‘enable change’) kind of bothers me. It should be rather ‘facilitate’. Using the word ‘enable’ indicates (in my opinion) as if without BAs the change is not possible.

    Reply
  3. Tom Hussey

    Interesting. Another way of perhaps framing the challenge of defining the BA role is to consider a spectrum with Business Consultant at one end and Solution Architect at the other. What I think you are in effect saying is that the BA can and often does typically add a lot of value in the space closer to Business Consulting rather than just being stuck in the middle … but the middle is where the definition and most people typically see the role.

    Reply
  4. Dave Post author

    There is a discussion thread about this post on the LinkedIn IIBA forum here if you want to give it a look: https://www.linkedin.com/groups/92583/92583-6130448714596106244

    Also, Kupe Kupersmith pointed to a 2013 article he wrote for BA Times that makes a somewhat similar argument. You can read it here: http://www.batimes.com/kupe-kupersmith/decision-making-an-underlying-competency-or-what-a-business-analyst-does.html

    As that article states, “You should view decision making not as something that supports your work, but rather all analysis techniques and processes support decision making. One of your main responsibilities is to help others make better decisions. “

    Reply

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