Business Process & Analysis
A business process or business method is a collection of related , structured activities or tasks that produce a specific service or product (serve a particular goal) for a particular customer or customers. It often can be visualized with a flowchart as a sequence of activities with interleaving decision points or with a Process Matrix as a sequence of activities with relevance rules based on the data in the process.
There are three types of business processes: Management processes, the processes that govern the operation of a system. Typical management processes include "Corporate Governance" and "Strategic Management". Operational processes, processes that constitute the core business and create the primary value stream. Typical operational processes are Purchasing, Manufacturing, Advertising and Marketing, and Sales. Supporting processes, which support the core processes. Examples include Accounting, Recruitment, Call center, Technical support.
Management processes, the processes that govern the operation of a system. Typical management processes include "Corporate Governance" and "Strategic Management".
Operational processes, processes that constitute the core business and create the primary value stream. Typical operational processes are Purchasing, Manufacturing, Advertising and Marketing, and Sales.
Supporting processes, which support the core processes. Examples include Accounting, Recruitment, Call center, Technical support.
A business process begins with a mission objective and ends with achievement of the business objective. Process-oriented organizations break down the barriers of structural departments and try to avoid functional silos.
A business process can be decomposed into several sub-processes, which have their own attributes, but also contribute to achieving the goal of the super-process. The analysis of business processes typically includes the mapping of processes and sub-processes down to activity level.
Business Processes are designed to add value for the customer and should not include unnecessary activities. The outcome of a well designed business process is increased effectiveness (value for the customer) and increased efficiency (less costs for the company).
Business Processes can be modeled through a large number of methods and techniques. For instance, the Business Process Modeling Notation is a Business Process Modeling technique that can be used for drawing business processes in a workflow.
History ( Adam Smith )
One of the most significant people in 18th century to describe processes was Adam Smith in his famous (1776) example of a pin factory. Inspired by an article in Diderot's Encyclopédie, Smith described the production of a pin in the following way:
One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head: to make the head requires two or three distinct operations: to put it on is a particular business, to whiten the pins is another ... and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which in some manufactories are all performed by distinct hands, though in others the same man will sometime perform two or three of them.
Smith also first recognized how the output could be increased through the use of labor division. Previously, in a society where production was dominated by handcrafted goods, one man would perform all the activities required during the production process, while Smith described how the work was divided into a set of simple tasks, which would be performed by specialized workers. The result of labor division in Smith’s example resulted in productivity increasing by 24,000 percent (sic), i.e. that the same number of workers made 240 times as many pins as they had been producing before the introduction of labor division.
It is worth noting that Smith did not advocate labor division at any price and per se. The appropriate level of task division was defined through experimental design of the production process. In contrast to Smith's view which was limited to the same functional domain and comprised activities that are in direct sequence in the manufacturing process, today's process concept includes cross-functionality as an important characteristic. Following his ideas the division of labor was adopted widely, while the integration of tasks into a functional, or cross-functional, process was not considered as an alternative option until much later.
- Business Analysis :
Business analysis is a research discipline of identifying business needs and determining solutions to business problems. Solutions often include a systems development component, but may also consist of process improvement, organizational change or strategic planning and policy development. The person who carries out this task is called a business analyst or BA.
Business analysts who work solely on developing software systems may be called IT business analysts, technical business analysts, online business analysts, business systems analysts, or systems analysts.
Business analysis sub-disciplines
Business analysis as a discipline has a heavy overlap with requirements analysis sometimes also called requirements engineering, but focuses on identifying the changes to an organization that are required for it to achieve strategic goals. These changes include changes to strategies, structures, policies, processes, and information systems.
Examples of business analysis includes : or Enterprise analysis or company analysis :
Focuses on understanding the needs of the business as a whole, its strategic direction, and identifying initiatives that will allow a business to meet those strategic goals. It also includes :
- Creating and maintaining the business architecture
- Conducting feasibility studies
- Identifying new business opportunities
- Scoping and defining new business opportunities
- Preparing the business case
- Conducting the initial risk assessment
- Requirements planning and management :
Requirements planning and management
Involves planning the requirements development process, determining which requirements are the highest priority for implementation, and managing change.
Describes techniques for collecting requirements from stakeholders in a project. Techniques for requirements elicitation include:
- Document analysis
- Focus group
- Interface analysis
- Reverse engineering
- User task analysis
- Process Mapping :
Requirements analysis and documentation
Describes how to develop and specify requirements in enough detail to allow them to be successfully implemented by a project team. The major forms of analysis are:
- Architecture analysis
- Business process analysis
- Object-oriented analysis
- Structured analysis
- Data warehouse analysis, storage and databases analysis
- Textual - for example, stories that summarize specific information
- Matrix - for example, a table of requirements with priorities
- Diagrams - for example, how data flows from one structure to the other
- Wireframe - for example, how elements are required in a website,
- Models - for example, 3-D models that describes a character in a computer game
Requirements documentation can take several forms :
- Requirements Communication :
Describes techniques for ensuring that stakeholders have a shared understanding of the requirements and how they will be implemented.
Solution assessment and validation
Describes how the business analyst can perform correctness of a proposed solution, how to support the implementation of a solution, and how to assess possible shortcomings in the implementation.
- Business Analysis Techniques > Pestle :
Business Analysis Techniques
There are a number of generic business techniques that a Business Analyst will use when facilitating business change. Some of these techniques include :
This is used to perform an external environmental analysis by examining the many different external factors affecting an organization. The six attributes of PESTLE :
- Political (Current and potential influences from political pressures)
- Economic (The local, national and world economy impact)
- Sociological (The ways in which a society can affect an organization)
- Technological (The effect of new and emerging technology)
- Legal (The effect of national and world legislation)
- Environmental (The local, national and world environmental issues)
- Business Analysis Techniques > HEPTALYSIS :
This is used to perform an in-depth analysis of early stage businesses/ventures on seven important categories :
- Market opportunity
- Execution plan
- Financial engine
- Human capital
- Potential return
- Margin of safety
- Business Analysis Techniques > MOST :
This is used to perform an internal environmental analysis by defining the attributes of MOST to ensure that the project you are working on is aligned to each of the 4 attributes.
The four attributes of MOST :
- Mission (where the business intends to go)
- Objectives (the key goals which will help achieve the mission)
- Strategies (options for moving forward)
- Tactics (how strategies are put into action)
- Business Analysis Techniques > SWOT:
This is used to help focus activities into areas of strength and where the greatest opportunities lie. This is used to identify the dangers that take the form of weaknesses and both internal and external threats.
The four attributes of SWOT analysis :
- Strengths - What are the advantages? What is currently done well? (e.g. key area of best-performing activities of your company)
- Weaknesses - What could be improved? What is done badly? (e.g. key area where you are performing poorly)
- Opportunities - What good opportunities face the organization? (e.g. key area where your competitors are performing poorly)
- Threats - What obstacles does the organization face? (e.g. key area where your competitor will perform well)
- Business Analysis Techniques > CATWOE :
This is used to prompt thinking about what the business is trying to achieve. Business perspectives help the business analyst to consider the impact of any proposed solution on the people involved.
There are six elements of CATWOE :
- Customers - Who are the beneficiaries of the highest level business process and how does the issue affect them ?
- Actors - Who is involved in the situation, who will be involved in implementing solutions and what will impact their success ?
- Transformation Process - What processes or systems are affected by the issue ?
- World View - What is the big picture and what are the wider impacts of the issue ?
- Owner - Who owns the process or situation being investigated and what role will they play in the solution ?
- Environmental Constraints - What are the constraints and limitations that will impact the solution and its success ?
- Business Analysis Techniques > de Bono's Six Thinking Hats :
de Bono's Six Thinking Hats
This is often used in a brainstorming session to generate and analyse ideas and options. It is useful to encourage specific types of thinking and can be a convenient and symbolic way to request someone to “switch gears". It involves restricting the group to only thinking in specific ways - giving ideas & analysis in the “mood” of the time. Also known as the Six Thinking Hats.
- White: Pure facts, logical.
- Green: Creative, emotional.
- Yellow: Bright, optimistic, positive.
- Black: Negative, devil’s advocate.
- Red: Emotional.
- Blue: Cold, control.
- Not all colors / moods have to be used
- Business Analysis Techniques > Five Whys :
Five Whys is used to get to the root of what is really happening in a single instance. For each answer given a further 'why' is asked.
- Business Analysis Techniques > MoSCoW :
This is used to prioritize requirements by allocating an appropriate priority, gauging it against the validity of the requirement itself and its priority against other requirements.
- Must have - or else delivery will be a failure
- Should have - otherwise will have to adopt a workaround
- Could have - to increase delivery satisfaction
- Would like to have in the future - but won't have now
- Business Analysis Techniques > VPEC-T :
This technique is used when analyzing the expectations of multiple parties having different views of a system in which they all have an interest in common, but have different priorities and different responsibilities.
- Values - constitute the objectives, beliefs and concerns of all parties participating. They may be financial, social, tangible and intangible
- Policies - constraints that govern what may be done and the manner in which it may be done
- Events - real-world proceedings that stimulate activity
- Content - the meaningful portion of the documents, conversations, messages, etc. that are produced and used by all aspects of business activity
- Trust - between users of the system and their right to access and change information within it
- Business Analysis Techniques > SCRS :
The SCRS approach in Business Analysis claims that the analysis should flow from the high level business strategy to the solution, through the current state and the requirements. The SCRS is standing for:
- Current State
- Roles of Business Analysts :
Roles of Business Analysts
As the scope of business analysis is very wide, there has been a tendency for business analysts to specialize in one of the three sets of activities which constitute the scope of business analysis, the primary role for business analysts is to identify business needs and provide solutions to business problems these are done as being a part of following set of activities.
Organizations need to focus on strategic matters on a more or less continuous basis in the modern business world. Business analysts, serving this need, are well-versed in analyzing the strategic profile of the organization and its environment, advising senior management on suitable policies, and the effects of policy decisions.
Organizations may need to introduce change to solve business problems which may have been identified by the strategic analysis, referred to above. Business analysts contribute by analyzing objectives, processes and resources, and suggesting ways by which re-design (BPR), or improvements (BPI) could be made. Particular skills of this type of analyst are "soft skills", such as knowledge of the business, requirements engineering, stakeholder analysis, and some "hard skills", such as business process modeling. Although the role requires an awareness of technology and its uses, it is not an IT-focused role.
Three elements are essential to this aspect of the business analysis effort: the redesign of core business processes; the application of enabling technologies to support the new core processes; and the management of organizational change. This aspect of business analysis is also called "business process improvement" (BPI), or "reengineering".
There is the need to align IT Development with the systems actually running in production for the Business. A long-standing problem in business is how to get the best return from IT investments, which are generally very expensive and of critical, often strategic, importance. IT departments, aware of the problem, often create a business analyst role to better understand, and define the requirements for their IT systems. Although there may be some overlap with the developer and testing roles, the focus is always on the IT part of the change process, and generally, this type of business analyst gets involved, only when a case for change has already been made and decided upon.
In any case, the term "analyst" is lately considered somewhat misleading, insofar as analysts (i.e. problem investigators) also do design work (solution definers).
- The Business Analysis Function within the organizational structure :
The Business Analysis Function within the organizational structure
The role of Business Analysis can exist in a variety of structures within an organizational framework. Because Business Analysts typically act as a liaison between the business and technology functions of a company, the role can be often successful either aligned to a line of business, within IT or sometimes both.
When Business Analysts report up through the business side, they are often subject matter experts for a specific line of business. These Business Analysts typically work solely on project work for a particular business, pulling in Business Analysts from other areas for cross-functional projects. In this case, there are usually Business Systems Analysts on the IT side to focus on more technical requirements.
In many cases, Business Analysts live solely within IT and they focus on both business and systems requirements for a project, consulting with various SMEs to ensure thorough understanding. Depending on the organizational structure, Business Analysts may be aligned to a specific development lab or they might be grouped together in a resource pool and allocated to various projects based on availability and expertise. The former builds specific subject matter expertise while the latter provides the ability to acquire cross-functional knowledge.
Business analysis center of excellence
Whether business analysts are grouped together or are dispersed in terms of reporting structure, many companies have created business analysis centers of excellence. A center of excellence provides a framework by which all business analysts in an organization conduct their work, usually consisting of processes, procedures, templates and best practices. In addition to providing guidelines and deliverables, it also provides a forum to focus on continuous improvement for the business analysis function.
- Business Process Improvement :
Business process improvementA business process improvement (BPI) typically involves six steps:
1. Selection of process teams and leader
Process teams, comprising 2-4 employees from various departments that are involved in the particular process, are set up. Each team selects a process team leader, typically the person who is responsible for running the respective process.
2. Process analysis training
The selected process team members are trained in process analysis and documentation techniques.
3. Process analysis interview
The members of the process teams conduct several interviews with people working along the processes. During the interview, they gather information about process structure, as well as process performance data.
4. Process documentation
The interview results are used to draw a first process map. Previously existing process descriptions are reviewed and integrated, wherever possible. Possible process improvements, discussed during the interview, are integrated into the process maps.
5. Review cycle
The draft documentation is then reviewed by the employees working in the process. Additional review cycles may be necessary in order to achieve a common view (mental image) of the process with all concerned employees. This stage is an iterative process.
6. Problem analysis
A thorough analysis of process problems can then be conducted, based on the process map, and information gathered about the process. At this time of the project, process goal information from the strategy audit is available as well, and is used to derive measures for process improvement.
- Identifying business needs :
Identifying business needs
Includes the following steps :
- Business definition
- Understand business domain(s)
- Organization goals
- Core competence
- Competitive stance
Goal of business analysisUltimately, business analysis want to achieve the following outcomes:
- Create solutions
- Give enough tools for robust project management
- Improve efficiency and reduce waste
- Provide essential documentation, like requirements document, project initiation documents and others.
One way to assess these goals is to measure the return on investment (ROI) for all projects. According to Forrester Research, more than $100 billion is spent annually in the U.S. on custom and internally developed software projects. For all of these software development projects, keeping accurate data is important and business leaders are constantly asking for the return or ROI on a proposed project or at the conclusion of an active project. However, asking for the ROI without sufficient data of where value is created or destroyed may result with inaccurate projections.
Reduce waste and complete projects on time
Project delays are costly in two different dimensions :
Project costs -
For every month of delay, the project team continues to rack up costs and expenses. When a large part of the development team has been outsourced, the costs will start to add up quickly and are very visible if contracted on a time and materials basis (T&M). Fixed price contracts with external parties limit this risk. For internal resources, the costs of delays are not as readily apparent, unless time spent by resources is being tracked against the project, as labor costs are essentially ‘fixed’ costs.
Opportunity costs -
Opportunity costs come in two flavors lost revenue and unrealized expense reductions. Some projects are specifically undertaken with the purpose of driving new or additional revenues to the bottom line. For every month of delay, a company foregoes a month of this new revenue stream. The purpose of other projects is to improve efficiencies and reduce costs. Again, each month of failure postpones the realization of these expense reductions by another month. In the vast majority of cases, these opportunities are never captured or analyzed, resulting in misleading ROI calculations. Of the two opportunity costs, the lost revenue is the most egregious and the impacts are greater and longer lasting.
N.B. On a lot of projects (particularly larger ones) the project manager is the one tasked with ensuring that a project is completed on time. The BA's job is more to ensure that if a project is not completed on time then at least the highest priority requirements are met.
Document the right requirements
Business analysts want to make sure that they define the requirements in a way that meets the business needs, for example, in IT applications the requirements need to meet end-users' needs. Essentially, they want to define the right application. This means that they must document the right requirements through listening carefully to ‘customer’ feedback, and by delivering a complete set of clear requirements to the technical architects and coders who will write the program. If a business analyst has limited tools or skills to help him elicit the right requirements, then the chances are fairly high that he will end up documenting requirements that will not be used or that will need to be re-written , resulting in rework as discussed below. The time wasted to document unnecessary requirements not only impacts the business analyst, it also impacts the rest of the development cycle. Coders need to generate application code to perform these unnecessary requirements and testers need to make sure that the wanted features actually work as documented and coded. Experts estimate that 10% to 40% of the features in new software applications are unnecessary or go unused. Being able to reduce the amount of these extra features by even one-third can result in significant savings. An approach of minimalism or "Keep it Simple" and minimum technology supports a reduced cost number for the end result and on going maintenance of the implemented solution.
Improve project efficiency
Efficiency can be achieved in two ways: by reducing rework and by shortening project length.
Rework is a common industry headache and it has become so common at many organizations that it is often built into project budgets and time lines. It generally refers to extra work needed in a project to fix errors due to incomplete or missing requirements and can impact the entire software development process from definition to coding and testing. The need for rework can be reduced by ensuring that the requirements gathering and definition processes are thorough and by ensuring that the business and technical members of a project are involved in these processes from an early stage.
Shortening project length presents two potential benefits. For every month that a project can be shortened, project resource costs can be diverted to other projects. This can lead to savings on the current project and lead to earlier start times of future projects (thus increasing revenue potential).
A solid working knowledge of productivity software and other IT tools has become a basic foundation for success in virtually any career. Beyond that, however, I don't think you can overemphasise the importance of having a good background in maths and science.....
"Every software system needs to have a simple yet powerful organizational philosophy (think of it as the software equivalent of a sound bite that describes the system's architecture)... A step in thr development process is to articulate this architectural framework, so that we might have a stable foundation upon which to evolve the system's function points. "
"All architecture is design but not all design is architecture. Architecture represents the significant design decisions that shape a system, where significant is measured by cost of change"
"The ultimate measurement is effectiveness, not efficiency "
"It is argued that software architecture is an effective tool to cut development cost and time and to increase the quality of a system. "Architecture-centric methods and agile approaches." Agile Processes in Software Engineering and Extreme Programming.
"Java is C++ without the guns, knives, and clubs "
"When done well, software is invisible"
"Our words are built on the objects of our experience. They have acquired their effectiveness by adapting themselves to the occurrences of our everyday world."
"I always knew that one day Smalltalk would replace Java. I just didn't know it would be called Ruby. "
"The best way to predict the future is to invent it."
"In 30 years Lisp will likely be ahead of C++/Java (but behind something else)"
"Possibly the only real object-oriented system in working order. (About Internet)"
"Simple things should be simple, complex things should be possible. "
"Software engineering is the establishment and use of sound engineering principles in order to obtain economically software that is reliable and works efficiently on real machines."
"Model Driven Architecture is a style of enterprise application development and integration, based on using automated tools to build system independent models and transform them into efficient implementations. "
"The Internet was done so well that most people think of it as a natural resource like the Pacific Ocean, rather than something that was man-made. When was the last time a technology with a scale like that was so error-free? The Web, in comparison, is a joke. The Web was done by amateurs. "
"Software Engineering Economics is an invaluable guide to determining software costs, applying the fundamental concepts of microeconomics to software engineering, and utilizing economic analysis in software engineering decision making. "
"Ultimately, discovery and invention are both problems of classification, and classification is fundamentally a problem of finding sameness. When we classify, we seek to group things that have a common structure or exhibit a common behavior. "
"Perhaps the greatest strength of an object-oriented approach to development is that it offers a mechanism that captures a model of the real world. "
"The entire history of software engineering is that of the rise in levels of abstraction. "
"The amateur software engineer is always in search of magic, some sensational method or tool whose application promises to render software development trivial. It is the mark of the professional software engineer to know that no such panacea exist "
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