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Business Analysis Importance: A Detailed Guide

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18th Jan, 2024
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    Business Analysis Importance: A Detailed Guide

    Earlier, business analysis was typically related to software engineering and business analysts were known as system analysts. But the problem was faced during gathering requirements where combining business concepts with technical terms became increasingly essential. To achieve business success, the business needs need to guide the development of technology solutions, the business changes must be reflected in IT and also the IT requirements need to be appropriately defined. These became the main three components of the present day business analysis, the business analysis process evolved and the role of the business analyst was developed. 

    What is Business Analysis? 

    Business analysis is a process of collaboration between different shareholders, partners, collaborators, investors, sponsors etc., to understand the needs of the business, its structure, policies and operations to find opportunities and solutions that help the organization achieve its desired goals. It is done by way of analyzing business requirements and proper documentation of the same, identifying the areas of process improvement and the required organizational changes, strategic planning and also developing various policies that drive the organization towards a better future. 

    As the name suggests: analyzing a business, and helping it to reach its strategic goals by identifying and implementing specific changes is the main purpose of business analysis, and the business analysis importance lies here. 

    The nature of change could be anything like strategic, structural, changes of policies and processes within a company that would help the business to remain competitive in the market. For example, by understanding the latest market trends, a company could improve its strategic and technical processes as inferred by doing business analysis. This is the reason why business analysis is important to companies and brings out the importance of business analyst as well. 

    The business analysis includes many elements. Some of these are: 

    1. Preparing a detailed business case. 
    2.  Feasibility studies. 
    3. Identifying and defining new business opportunities. 
    4. Risk assessment and mitigation plan. 

    what is business analysis

    The Importance of Business Analysis in Today's Market 

    1. Business Analysis Increases the ROI 

     ROI means Return on Investment. It is a metric used to evaluate the efficiency of an investment or investments. The survivability and the image of a company depend on the ROI as it shows the business value, its benefits and an increase in revenue. 

    A company may not always focus on increasing its business value vis a vis the investments made. Rather it may focus only on its technology costs and ignore the other business-related expenses it makes instead of focusing on the total business and related expenses. 

    This actually gets discovered during business analysis, by calculating the ROI (from getting a difference from the value received through solutions vis a vis the cost of the solution).

    The process of business analysis increases ROI in various ways. For example, by reducing the costs of the projects, reducing the occurrence of re-work on the projects etc., and thus increasing the benefits and margins both of which finally increase ROI. 

    2. Business Analysis Decreases the Cost 

    Business analysis reduces costs or expenses in many ways by implementing various business strategies. For example, business analysis involves the step of getting a proper understanding of the project’s exact requirements from the related stakeholders. Then communicating the same to the people involved effectively, and also ensuring that the requirements are met. This way the possibility of re-work reduces thereby reducing the waste and expenses. 

    3. Business Analysis Helps in Decision Making 

    The business stakeholders mostly focus on investments and their share, and others. Through business analysis, the actual stock of the situation comes to the foreground which the stakeholders get to know often for the first time and also feel the importance of analysis in business. For example, they get to know the ways of reducing expenses, areas that need improvements, policies that need to be modified and lots more. This helps them to make effective and fast business decisions. 

    4. Business Analysts Opt for Cost-Effective Solutions 

    During the process of business analysis, a professional business analyst seeks to implement the most cost-effective solutions for any problems, creating innovative ways to solve the problems with inexpensive and affordable means. Also, the ineffective processes and methods are sorted out and discarded (like expenses due to re-work) thus increasing the ROI. 

    5. Business Requirements 

    It is by analyzing the business in detail all the needs and requirements that can make a business grow further and bring out the importance of business process analysis. Accordingly, the optimum solutions are drawn and communicated to the stakeholders who in turn make better and faster decisions to implement. A business analyst also ensures that the solutions get implemented within a specified time-line with a constant vigil on the outcomes. 

    6. Focusing on Real Value 

    The stakeholders are always interested to know the outcome of their invested money in business. During a business analysis project, a business analyst gets to learn the overall picture of the business and also the changes needed for its betterment. In turn, a business analyst creates an accurate platform and environment to discuss the extracted analyzed insight and shares it with the stakeholders so that they can make informed business decisions on time. Thus, the core focus of business analysis which is to explore and highlight the overall business outcomes and their effects on the business, is met. 

    7. Providing a Framework 

    As a company grows, its approach, expression, way of work, the pattern of communication etc. keep changing. Business analysis facilitates the previous small business team to match itself with the changing phase and prepare itself for a bigger environment of a large business and team. 

    Business analysis vs Business Analytics 

    Before discussing the role of a business analyst let us interest two often confusing terms – business analysis and business analytics. Business analysis deals with processes and functions whereas business analytics deals with data and creating reports. 

    What Does a Business Analyst Do and Why Is Their Role So Important? 

    What a Business Analyst Actually Does: An Overview  

    • Business analysts actually serve as the connectors among every department throughout the organization helping in: 
    • Giving an understanding of the entire business, its goals and objectives. 
    • Addressing many functional and operational issues. 
    • Identifying the shortfalls of a system and suggesting better, improved and efficient and cost-effective solutions. 
    • Documenting, reporting, budgeting, and pricing by using new technologies.
    •  Setting/modifying protocols. 
    • Understanding the current processes of the clients. 
    •  Suggesting improvements for improving existing business processes.
    •  Taking an active part in the initial phase of a project to gather the information that helps in implementing the plan. 
    • Data collecting and analysis by studying the data in many patterns and trends. 
    • Documenting the analyzed results in written format or visually using presentation tools and dashboards. 
    • Collaborating actively with every department of the organization. 

    Steps of Doing Business Analysis  

     Overall, the process of business analysis involves the following stages: 

    1. Orientation

    Involves knowing the project's history, and goal and defining the role of a business analyst in it. 

    2. Identification

    • Identifies the primary business objectives. 
    • Identifies the stakeholder expectations and requirements. 
    • Writing down the objectives clearly. 

    3. Definition 

    • Defines the entire project’s scope for everyone in the team to follow. 

    4. Creation

    • Creates a business analysis plan. 
    • Creates timelines and outlines the most important steps. 

    5. Requirement

    •  Documents the requirements by analyzing the already collected data. 

    6. Support

    • Supports technical implementation by working closely with IT teams to implement solutions that are dependent on software development. 

    7. Implementation

    • Facilitates the implementation of the solution. 
    • Creates clear documentation of all the processes. 

    8. Assessment

    •  Assesses to see if the project works as expected. 
    • Analyzes the progress it brought to the organization. 
    •  Notes if any follow-ups are needed. 

    Business Analyst Role  

     Need and requirement management hold a significant part in any business analysis which includes either bringing out technical solutions to the existing problems in a company or improving its revenue (by creating, explaining, reporting, and evaluating the requirements).

    How a business analyst fulfills this role and makes a business analyst importance and presence felt everywhere in the organization can be best understood from this image. 

    business analyst role

    Business Analyst Responsibilities  

    Some of the important responsibilities that business analysts handle are: 

    • Identifying the areas needing improvement. 
    • Investing the current trends in a business process.
    • Researching IT advancements to improve the system.
    • Coming up with innovative ideas. 
    • Developing efficient projects and monitoring their performance. 
    • Incorporating the best practices in relation to a project context. 
    • Collaborating with clients and stakeholders. 
    • Designing business systems or IT systems. 
    • Solving business problems. 
    •  formulating technical solutions. 
    • Documenting the functional and non-functional design of the system. 
    • Collaborating with system architects and developers to oversee the successful implementation of systems. 

    Does Business Analysis Need to Be Learnt 

    Technological advancements have brought disruptive changes across the globe. It has deeply impacted how businesses utilize IT solutions to resolve various business issues, challenges, and problems. All these need professionals who are especially qualified in the field reinforced with the skills, methodologies, techniques, and trends as well of how a business should be run to meet its business goals and also shows why business analyst is important for an organization. 

    ECBA Certification Training, for example, is the level one certification in business analysis (BA) framework provided by the International Institute of Business Analysis that is recognized worldwide. This basic level of certification covering the foundational knowledge and skills is specially designed for those who wish to take business analyst as a career. 

    The gaining traction of business analysis is encouraging the new aspirants or even those who are having some business analysis experience to get Business Analyst Training Online to reinforce their experiences and increase the importance of a business analyst. 

    The reason is a certified business analyst serves as a testament to the knowledge, expertise and dedication to modern business practices also answering why are business analysts important. Because a Certification of Competency in Business Analysis (CCBA) or CCBA Training Online, which is the level-2 certification in business analysis (BA), increases the credibility as an expert in the field apart from securing an edge in the job market so does the Certified Business Analysis Professional or CBAP Certification which is the level-2 certification in business analysis (BA). 

    Big and good companies prefer a certificate obtained from a credible institute because acquiring one is not easy, and hence they consider a BA certificate as proof of being a skilled, dedicated, committed and hard-working person who can work under pressure. 

    Also, such studies keep the certificate holder updated with the tools and techniques essential for this ever-changing and growing field. 

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    The Benefits of Business Analysis Certification 

    With the growth of the profession of business analysis and the increasing demand for business analysts, whether or not business analysis certifications add value continues to be a question for many business analysis practitioners, including seasoned business analysts with ten-plus years of experience, as also aspirants with zero experience in the profession but seek to enter into it. 

    Regardless of what end of the business analysis profession spectrum you fit in, pursuing a certification is a big commitment in terms of time and money. Obviously then, the certificate holders (or the would-be pursuers) are interested to know the real value of acquiring a BA certification. 

    Before getting into it, it is good to know about the certification and the institute offering it. The International Institute of Business Analysis (IIBA) is a global association supporting the advancement of business analysis and the progression of business analysts across the globe. The institution does a great and painstaking job of gathering market research data to understand the high demand or the latest trending BA skills. Secondly, it develops certifications to enable the certificate to demonstrate those skills. 

    With this background now it will be appropriate to discuss the benefits of the certification. 

    1. Growing Employer Interest  

    A huge number of project management positions require a Project Management Professional certification (PMP) or an equivalent certification which is considered the gold standard of project management certification. Certified Business Analysis Professional (CBAP) from IIBA is almost similar to the designation “PMP certified” of business analysis certification and there is a growing demand for BA certifications overall. 

    While project management is an older, more established and well-known profession with PMP emphasized; trends indicate that now CBAP and other BA certifications are following the same pattern. What is “good to have” is soon going to be a “must have” and in any case, one will have to catch up with it sooner or later. 

    The reason behind it is not hard to understand. As an organization grows in size and business so enlarges the organizational risks. To mitigate this, employers prefer higher standards from their employees and a typical approach to achieve this is having employees with professional certifications. 

    2. Statics do not lie  

    IIBA’s Global Business Analysis Salary Survey revealed: 

    13% of business analysis certification holders received a promotion. 

    24% of respondents received a salary increase following their certification. 

    CBAP holders earn an average of 26% more than their non-certified peers. 

    A point that needs to be clarified here is: Mere holding a certificate may not bring a windfall of salary or a promotion although there is an increase in employer recognition of the value of BA certifications. This may be true for many and in case if this is your case as well then it calls for some efforts to be put into it. 

    The onus of building a case of the value of your certification will be on you. It can be facilitated by demonstrating how your newly acquired skills or the certification has helped your company save money, contributed to increased profit or even perhaps brought some intangible benefits to the company that the leaders care about. 

    3. Increased Credibility  

    Because IIBA certification is recognized globally, this is perhaps one of the biggest advantages of getting your certification and hence worth pursuing. We have already mentioned the credibility of IIBA as a world-famous institution. 

    Although there are other well-known institutions as well, IIBA is the first and most renowned overall. Earning an IIBA certification is as prestigious as going to a well-known university or college. 

    Also, while most of the companies have started preferring certified business analysts, the supply pool of such professions is still relatively small. Hence acquiring a certification now helps to place a holder at a competitive advantage in the job market before the certification becomes common. 

    Employers understand and know that people often put anything they want on their resumes in the name of experience. But earning a global certification can be verified to reveal that the holder has benchmarked the knowledge, skill set and best practices against global standards.

    This again turns the sail in the applicant’s favor who has earned the certification compared to others who have none. This is especially true for a business analyst consultant. Having a certification increases credibility, reduces gaps in the resume and increases the chance of bagging a contract against fellow applicants. 

    4. Benchmarking 

    The IIBA certification follows the global standards of the BABOK Guide which are composed of commonly accepted practices irrespective of how your company goes about them. This is also where the certificate can add value to prospective employers. 

    Business leaders are always looking forward to improving their business outcomes in all areas of their business. Possessing a certificate benchmarks the holder with the ability to bring the best and standard outcomes to justify the hiring. 

    It is imperative to remember that it is possible to have huge experience but with poor practices. A globally recognized certification benchmarks the holder’s knowledge against a globally accepted standard thereby bringing the opportunity for the holder to introduce to the team the importance of global-standard business analysis practices and even the chance of getting fast recognized by the management. 

    5. Enlarged business analysis toolkit 

    The certification process takes the certificate winner through 50 plus business analysis techniques that the BABOK Guide currently uses which the business analyst might never have used throughout one’s career. Because it is common for a business analyst to stick with a handful of familiar techniques even at the cost of generating suboptimal results.

    To surpass as a business analyst, one needs to use the most important tools for business analyst as also the most effective techniques that would be the best-fit in a situation; the BABOK guide can help facilitate that. This could also be an influencing factor distinguishing between senior business analysts and the mid-level business analysts. 

    Furthermore, the increased range of business analysis tools and techniques also allows the certificate holder to further explore different project elements. This could increase the effectiveness of communication with technical stakeholders (like the developers, data analysts, architects or others) who also get to know why is business analyst important.

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    Conclusion 

    Business analysis is now one of the trending professions coming with an impressive pay package. This is because of the multi-faceted roles the business analysts play in bringing overall success to a business. Especially the certified business analysts are in high demand across the globe as against the scarce supply. Aspirants who wish to make a career in business analysis will derive the best benefit by pursuing the business analysis certifications which cover all the nuances of business analysis. 

    Frequently Asked Questions (FAQs)

    1How can a business Analyst stand out?

    By developing the most crucial skills of: 

    • Excellent communication and collaboration 
    • Critical thinking 
    • Problem-solving 
    • Decision making 
    • Leadership and people management
    2How long does it take to become a business analyst?

    Considering you have already completed your bachelor’s and/or master’s degree, it will take around 10–12 weeks of study with an average of 8–10 hours of study per week to undergo a business analysis certification. 

    3Which is the most important Business analyst certification?

    Certified Business Analysis Professional CBAP 

    4How can I improve my business analyst skills?
    • By undergoing business analysis certification and 
    • Gaining experience by working 
    5What are the disadvantages of business analysis certification?

    Care should be taken to earn certification from a world-class institution like IIBA. 

    Earning a certification will bring maximum benefits if the skills that are required are taught during the certification training. 

    Profile

    Mansoor Mohammed

    Business Agility Expert

    Mansoor Mohammed is a dynamic and energetic Enterprise Agile Coach, P3M & PMO Consultant, Trainer, Mentor, and Practitioner with over 20 years of experience in Strategy Execution and Business Agility. With a background in Avionics, Financial Services, Banking, Telecommunications, Retail, and Digital, Mansoor has led global infrastructure and software development teams, launched innovative products, and enabled Organizational Change Management. As a results-driven leader, he excels in collaborating, adapting, and driving partnerships with stakeholders at all levels. With expertise in Change Management, Transformation, Lean, Agile, and Organizational Design, Mansoor is passionate about aligning strategic goals and delivering creative solutions for successful business outcomes. Connect with him to explore change, Agile Governance, implementation delivery, and the future of work.

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