Everybody gets so much information all day long that they lose their common sense.
—Gertrude Stein Enterprise analysis is perhaps the fastest growing area of business analysis. It provides the context and the link between projects and the business. Although most of the business analyst’s work tends to reside within the project boundar-ies, there are parts of the job that take place before and after the project. This section deals with most of the pre-project activities, such as feasibility studies and industry benchmarking. It is often the most difficult part of the business analyst’s job because it can be highly political, complex, and unchartered. The pre-project activities tend to give the analyst the most organizational visibility through dealings with the upper levels of the organization. If the business ana-lyst is successful in this area, it can be a great career enhancer; if unsuccessful, it will be noticed.
6.1 Objectives
◾ Understand the importance of the business analyst having a strong under-standing of the enterprise.
◾ Review ways of documenting and understanding the business.
◾ Identify business vision, goals, and objectives.
◾ Identify prerequisites to requirements gathering.
◾ Identify how a project maps to the enterprise.
◾ Document an enterprise analysis for the case study.
6.2 Overview
International Institute of Business Analysis™ (IIBA) defines enterprise analysis, in the BABOK® Guide 2.0, as the knowledge area that describes the business analysis activities needed to
◾ Identify a business need, problem, or opportunity.
◾ Define the nature of the solution needed.
◾ Justify the investment needed to deliver the solution.
The key tasks outlined by IIBA for enterprise analysis are
◾ Defining the business need
◾ Assessing the capability gap
◾ Determining the approach to finding a solution
◾ Defining solution scope
◾ Defining the business case
This chapter reviews these areas and also discusses the skills the business analyst must have to accomplish this work. It is important to note that this knowledge area may be the one to change the most over the next few years. Enterprise analysis is not the traditional role of the business analyst, and the type of work done in this area varies greatly from organization to organization. Right now the domain of the business analyst overlaps in areas with project management, program management, and business architects. As the domain of business analysis becomes more refined over the next few years, some of the overlapping areas will become clarified and some will not, requiring each organization to customize its definition of the busi- ness analyst. This tailoring process is still going on within most project manage-ment organizations more than 40 years after the Project Management Institute™
(PMI) was formed, so it will take some patience for IIBA as well.
Enterprise analysis is not the traditional role of the business analyst, and the type of work done in this area varies greatly from organization to organization.
Although the primary role of the business analyst is to function as a commu-nication link between the customer and the developer in relation to defining the requirements of a product or service, the role is expanding in many organizations.
Clearly, the business analyst must have a solid understanding of the overall busi-ness environment in which the customer operates. The business analyst is often
assigned to do competitive benchmarking against other companies, evaluate best practices, and in general, keep up on trends in the industry. This naturally makes the necessity for a strong business background an increasing demand on future business analysts.
Some areas of involvement for the business analyst, in addition to the areas outlined by IIBA, may be
◾ Benchmarking. This can be part of a feasibility study, but can also be a stand- alone activity. The purpose of benchmarking is to evaluate where the custom-er’s competitors are. Who is considered to be “Best in Class,” who is improving rapidly, and what new trends are emerging in the customer’s area of business.
For the C.V. Green Prescription Interaction Project described in Chapter 1, this involves researching what the competition is doing, and one may need to be creative to do this. For example, it may be obvious to check out the pharma-cies that are in the same business, but you should also look beyond the obvious and see if there are other industries in which similar work is done. There could be lessons to be learned from order entry projects or from medical billing.
◾ Identifying and analyzing new business opportunities. By attending confer-ences as well as being aware of and up to date on new technology trends, the business analyst can actually be the instigator of new opportunities. A business must continuously evolve and change to stay competitive and the business analyst can be a catalyst in that process.
6.3 The IIBA Tasks
The tasks listed in the previous section and presented below are the key tasks intro-duced by IIBA for the knowledge area of enterprise analysis. Each organization must determine which ones are applicable and to what level of detail each will be explored.
Clearly, some organizations already have existing functions and professionals that have done this work for a long time and with great results. They may be the owners, the strategists, or the executives of the organization. That’s great! All the business analyst needs to do is to trace the project objectives back to the deliverables, which may be the strategic plans, the tactical initiatives, or the company vision. However, for organizations that currently do not have a good handle on these activities, the business analyst may be the natural person to start taking on these responsibilities.
… for organizations that currently do not have a good handle on these activities, the business analyst may be the natural per-son to start taking on these responsibilities.
Enterprise analysis should not be viewed as a “one size fits all” approach. There should be established ground rules regarding the level of effort needed for different types of projects and organizations. This customization may be driven by project size, risk, complexity, visibility, or any other parameter that makes sense to the business. As an example, if the customer submits a request to change a report or to implement a minor change in an existing system, there is probably no need to do an extensive enterprise analysis. On the other hand, if the organization is switching to a new enterprise resource planning (ERP) system, then the enterprise analysis may be more extensive than the actual projects.
For many of the IIBA key processes the inputs come from customers, govern-ment, or executives during one-on-one interviews, as well as from documents such as the strategic plans and goals of the business, the problems and opportunities that the business is facing, and regulations the business must follow. Although some-times these documents are identified by executives during off-site planning sessions and at a level of the organization to which the business analyst does not normally have access, it is a good idea to have the business analyst as informed and involved as possible in these events. A strategic plan will lead to tactical initiatives within the organization. These initiatives potentially will lead to many projects, which will need to be prioritized based on their ability to meet the strategic plan.
So what is the business analyst’s role in creating the strategic plan and doc-umenting the strategic goals? Most organizations will primarily use the man-agement team and often some consultants to facilitate and drive these efforts.
However, this is an area where IIBA appears to be visualizing a bigger involvement in the future for the business analyst. Once the organization develops business analysts with a strong understanding of the business along with good communica-tion and facilitation skills, those analysts can become very effective in leading the sessions where the strategic goals are set. Because the analysts will become heavily involved with the implementation of the strategic plans, at least at a project level, the skills and knowledge obtained in this early effort will not be lost. However, sometimes strategic sessions will not be taken seriously if they are facilitated by an internal analyst. There is an old saying that no one is a prophet at home. If there are any concerns about this, then the organization would be better off bringing in an independent consultant to lead the activity. Even in this case, it is desirable to have the business analyst involved, either as a scribe, observer, or subject matter expert (SME).
An especially value-added role for business analysts in the creation of the strate-gic plan, regardless if they are actually in the sessions, is the creation of score cards and metrics. Any good strategic plan or set of strategic goals must be measurable to be effective. So what are the metrics needed to measure a strategic plan? They could be cost or profit related. Most strategic goals have at least some relevance to the finances of the business, such as market share or market position. C.V. Green wants to be the “premier pharmacy.” What does that mean? Highest market share?
Most revenue? Most customers? Most satisfied customers? The business analysts are
not the ones to answer these questions; rather, their job is to find the person who can answer them and then document the answers.
Without a clear understanding of this linkage between, and importance of, the different components of the strategic plan, it would be hard to recommend potential improvements to the business. Returning to the Prescription Interaction Project, the strategic goal for C.V. Green is to become the premier pharmacy chain in the world through superior service and competitive cost. One tactical initiative is to minimize harmful effects of drugs. This would provide benefits in terms of both competitive cost and the objective of superior service. Checking for prescription drug interaction (the project used as an example in this book) fits nicely here. By doing this trace and understanding how the project fits within the bigger business picture, the analyst can identify benefits, ask the right questions, and assist in get-ting stakeholder buy-in for the effort.
By learning about the global aspect of the goal of C.V. Green and the desire for superior service, it is likely the analyst will pay more attention to how to identify drug interactions as well as how to maximize customer safety versus just staying legally compliant. For instance, if the project had a purely legal driver, the focus would be narrower and only consider how the pharmacy could limit drug interac- tion based on best-available information. If the goal is primarily customer satisfac-tion and service, the business analyst may go out and look for what information could be obtained by working with other pharmacies, or by looking for drug inter-actions from drugs that the customer’s family members have bought.
This ties in well with the topic of validation, which is discussed in more detail in Chapter 8. The purpose of validation is to make sure that the product or service that is eventually developed will solve, at least partially, the business problem or opportunity that caused it to be started. Naturally this is hard to accomplish unless the organiza-tion as well as the business analyst clearly understands that problem or opportunity.
6.3.1 Define the Business Need
All projects should be based on a business need. Naturally that need may exist at dif- ferent levels. Some projects are strategic, some are tactical, and yet others are opera-tional in nature. Defining that need is critical to the buy-in and success of the project.
There is an increasing need to put more emphasis on and resources into mak-ing sure that the business environment, vision, goals, and objectives are known and understood before a significant project is undertaken. Clearly, for many busi-ness analysts, this is beyond the scope of the work they do, but for those who get assigned to large, enterprise-wide, high-visibility-type projects, the knowledge of this area is crucial. In many organizations this activity may primarily involve dig-ging for information. The strategic goals and tactical initiatives are often already documented at a corporate level. The link between these and the projects done at the operational level is part of the traceability needed to justify the existence of a project. Figure 6.1 is an example of a model of those relationships.
The executives may have an annual strategic session or there may have been con-sulting studies done on where the company is heading and its vision and mission.
SWOT (strengths-weaknesses-opportunities-threats) analysis is a tool often used to show the status of a business. Figure 6.2 shows an example of a SWOT analysis.
The SWOT analysis will often be a foundation for business strategic goals and plans. An aggressive business will focus on taking advantage of its strengths
◾ Policies and business rules—explain what standards the business has for cer-tain actions. Policies and business rules tend to be overlapping. They both deal with actions that must be taken or rules that must be complied with by
Strategic goal 1:
Increase market share
Strategic goal 2:
Improve customer satisfaction
Tactical initiative 1:
Add new stores
Tactical initiative 2:
Improve product availability
Tactical initiative 3:
Reduce product problems
Project 1: New inventory process
Project 2:
Prescription interaction project
Figure 6.1 Strategic goals and tactical initiatives.