Business Knowledge - Business Analyst

Business Principles and Practices

1. Purpose

Business analysts require an understanding of fundamental business principles and best practices, in order to ensure that they are incorporated into and supported by solutions.

2. Definition

Business principles are those characteristics that are common to all organizations with a similar purpose and structure, whether or not they are in the same industry. Almost all organizations need certain functions or capabilities in order to operate. Business areas within and across industries often have a common set of business processes and associated systems. Common functional areas include:

  • Human Resources
  • Finance
  • Information Technology
  • Supply Chain Management

While these areas have common processes, they can also vary widely based on the industry and size of an organization (e.g. Human Resources will be guided by different regulatory and cultural influences, but there are universal commonalities in roles such as finding, retaining, counseling, compensating, and removing staff). Other areas, such as production, tend to have fundamentally different demands between different industries (e.g. agriculture and software). Understanding how other organizations have solved similar challenges can be useful when identifying possible solutions.

3. Effectiveness Measures

Measures of knowledge of business practices and principles may include:

  • Understanding of business environments, operations, process and practices relating to:
  • Common business management and decision making concepts, principles activities and practices.
  • Typical organization structures, job functions and work activities.
  • Complex business functions and operations.
  • Understanding of relevant regulatory, compliance, and governance frameworks.
  • Understanding of auditing and security issues.

Industry Knowledge

1. Purpose

Business analysts should have an understanding of the industry that their organization is in so that they may understand new challenges that may be posed by competitive moves, and which solutions have proven effective elsewhere.

2. Definition

Industry knowledge is the understanding of the competitive forces that shape an industry. It requires that the business analyst understand the various customer segments that the industry services and the demographic or other characteristics common to that segment. An understanding of major trends impacting the industry will help shape business requirements. Competitors will be making changes to their product lineup and business operations in response to these changes, and the business analyst may need to recommend changes to an ongoing change initiative in order to respond to a competitor’s action.

3. Effectiveness Measures

Measures of effective industry knowledge may include:

  • Understanding of industry related material and keeps abreast of what is taking place in the industry .
  • The ability to identify key trends shaping the industry.
  • Knowledge of major competitors and partners for the organization.
  • Knowledge of major customer segments.
  • Knowledge of common products and product types.
  • Knowledge of sources of information about the industry, including relevant trade organizations or journals.
  • Understanding of industry-specific resource and process documents.
  • Understanding of industry standard processes and methodologies.
  • Understanding of the industry regulatory environment.

Organization Knowledge

1. Purpose

Business analysis is significantly assisted by an understanding of the organization for which it is being performed.

2. Definition

Organization knowledge is an understanding of the business architecture of the organization that is being analyzed. It includes an understanding of the business models that the organization (that is, how the organization generates profits or otherwise accomplishes its goals), the organizational structure that is in place, the relationships that exist between business units, and the persons who occupy key stakeholder positions. Understanding of an organization requires understanding of the informal lines of communication and authority that usually exist in parallel with the formal ones, and the internal politics that govern or influence decision-making.

3. Effectiveness Measures

Measures of a business analyst’s organizational knowledge may include:

  • Understanding of terminology or jargon used in the organization.
  • Understanding of the products or services offered by the organization.
  • Ability to identify subject matter experts in the organization.
  • Organizational relationships and politics.

Solution Knowledge

1. Purpose

Business analysts can use their understanding of existing solutions in order to identify the most effective means of implementing a change.

2. Definition

Business analysts frequently work on projects that involve enhancing an existing solution, or purchasing a commercially available solution, rather than developing entirely new custom solutions. In these circumstances, it is likely that the method of implementation chosen will make a significant difference in the time and effort required. A business analyst who is familiar with the workings of a solution may be able to more easily identify and recommend changes that can be implemented easily while still providing concrete benefits. Familiarity with the range of commercially available solutions or suppliers can assist with the identification of possible alternatives.

3.Effectiveness Measures

    Measures of useful solution knowledge can include:

    • Reduced time or cost to implement a required change.
    • Shortened time on requirements analysis and/or solution design.
    • Understanding when a larger change is justified based on business benefit.
    • Understanding how additional capabilities present, but not currently used, in a solution can be deployed to provide business value.

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