Organizations are becoming more and more reliant on business analysts (or BA’s) to help guide them through this digital transformation, examining data patterns and industry trends to identify best how to adapt products and processes in order to add value for customers and stakeholders.
But just what are the benefits of business analysis for startup founders and established companies? Why is it important to leverage the kind of learnings that a business analyst can provide for the different stages of project management? In this article, we will explore the following key benefits of business analysis for companies and startups, with a specific focus on software development projects.
Understanding Business Analysis in Software Development - Part 4
This article is part 4 in a five-part series about business analysis, business analytics tools and techniques.
The key result is to influence through this practice the success of your product and shorten time to market thanks well-chosen tools to support your software development efforts.
For the last few decades, as the sun has been setting over outdated analogue business processes and rising on the dawn of new digital ecosystems, the business world has moved sluggishly at best to reach that far horizon, and embrace what has come to be known as "digital transformation." That is, using new digital technologies to modify and enhance existing business processes or replace them with all new ones. So, why organizations should rely on business analysts to guide their digital transformation journey? Whilst developing software for companies and startups, we identified six key benefits of business analysis:
Eliciting requirements for a project
Communication bridge between different stakeholders
Project implementation and testing
Strategy and decision making
Identify the market status of the business
Before we dive into those topics, let’s take a quick look at some of the most common reasons for the complete or partial failure of IT projects, and how a more thorough business analysis could have helped avert disaster.
The original Standish Group CHAOS Report on reasons for IT project failure (and components which increase success rates) was published way back in 1994, and has been updated every year since. Incredibly, most of the same conclusions about why IT projects fail are the same in 2020 as they were 26 years ago! The statistics have improved since then, but not by as much as we would expect after two and a half decades of process digitization around the world.
For example, in 1994 researchers measured the rate of “successful” projects at just 16.2%, while “challenged” or partially complete projects came in at 52.7%, and the complete failure or cancellation of the project at 31.1%.
By contrast, as outlined in the 2015 CHAOS report, modern resolution rates were around 29% for successful projects (defined as “on time, on budget, with a satisfactory result”), 52% challenged, and 19% failed.
Over those two decades, successful projects almost doubled across the IT industry, and failure rates have declined by more than a third. However, “challenged” projects barely moved the needle. This means that over half of IT projects are being completed either behind schedule, over budget, or finished with unsatisfactory results. Here are the top 5 reasons for project success or failure, according to the report:
- User involvement
- Executive or leadership support
- Clear project requirements
- Thorough planning
- Realistic expectations for success
- Lack of user input
- Incomplete technical requirements
- Changing specifications
- Lack of support from leadership
- Technical incompetence
Based on what we know about business analysis, and how it helps to define these points for product owners and project managers, we see that this could serve as a veritable checklist for defining the tasks of a business analyst during the project management life cycle. Any experienced software development team member could point out numerous occasions when these factors have influenced the success or failure of IT projects. You can think of it as a snapshot of a current process or architecture, which could change the second you walk out of the room.
At DO OK, we have developed a unique process for leveraging value-added business analysis tools & techniques, as well as discovery workshops & product development workshop methodologies, in order to help startup founders and established companies better understand their business requirements, their products & services, and themselves. Let’s take a closer look at some of the top 6 benefits of business analysis that we have identified during thousands of hours of digital consulting with many clients across a wide variety of industries.
The BA gathers all the necessary technical and business requirements for a minimum viable product (MVP) or final product, in cooperation with all stakeholders, including software engineers, project managers, product owners, company leadership, and employees. Ideally, this research includes input from customers or end-users, since they are the individuals who will actually use the product, and are best placed to inform you about product functionality, their challenges, successes and failures using the product. Including end-users will also tell you if attempts to get buy-in are introducing other unexpected artifacts or processes to product users that could impact the overall return on investment (ROI).
Without proper and thorough business analysis prior to building the software, developers may end up designing incomplete applications that fail to solve the problems they were intended to. Even worse, the software may have to be rebuilt, or scrapped to start again from scratch, after significant time and money investments have already been made.
2. Communication bridge between stakeholders
The business analyst functions as a bridge between stakeholders and the development team, capable of translating business requirements so that developers and engineers can understand them in technical terms. At the same time, the BA communicates the concerns of the project team to the appropriate stakeholders, so that all sides of the team are well-informed and understood across silo boundaries.
Filling this critical communication gap also helps everyone else in the company, both on the business and development sides, to understand the value that the project creates. This protects against misunderstandings, as well as the possibility of developing a product inconsistent with customer vision. It also reduces the risk of eventual communication failures regarding product requirements or specifications, such as missing features, and keeps business relations healthy.
The actual building or development phase of the project includes preparing and implementing the application or software solution necessary to fulfil business requirements in the form of a successful, working product. Business analysis plays a significant role in implementation and testing, working with the testing team to review features and overall functionality of the application as it is being built.
The BA ensures that the developed product meets all specified requirements from the product backlog and technical documentation during application walkthroughs and other testing activities in each release cycle. They also participate in actual product testing, so are able to provide direct feedback to the entire project team regarding compliance with requirements.
During the implementation and testing stage, the business analysis also helps with crisis anticipation and change assessment. All this increases the likelihood that the final product will meet specified end-user requirements, within the stipulated timelines and budget.
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One important advantage of business analysis is helping to reduce company costs. BA’s use data analysis and recommend work methodologies to create strategies intended to lower project costs. Depending on the software development framework the team is operating under (Waterfall, Agile, Scrum, Lean development, etc.), the BA briefs the team on how to work and monitors the process for any pitfalls or potential efficiency improvements. This helps to keep costs down and improve time to market (TTM) of the finished application. There are a thousand ways that business analysis can help to reduce project costs and overruns. In one example from our own consulting, we helped a client developing a video conferencing solution to choose between two potential implementations of an open-source framework to develop their application. Their options were:
1. Include new features only, on top of the existing open-source framework. This would reduce initial development costs, but limit their options in terms of being able to grow and customize the platform in the future. If the company secured additional investment or wanted to expand, the existing code would have to be rewritten and the product roadmap changed, at significant additional costs.
2. Refactor the code from the ground up. This option would address all the technical issues with the existing code identified by our business analysis, and leave the app prepped for additional development with no need to rewrite the code in the future. Short term costs would be higher, but refactoring would provide a great deal of flexibility for adjusting product features and business planning in the future.
Perhaps the most important benefit of business analysis is the ability to help empower decision making on behalf of the company for stakeholders and investors. Factors that influence decision making and offer clarity include structured, logical discussions about how the company has been functioning in the marketplace, where the problem areas or opportunities are, and what factors are governing the increase of company expenditures, or how to reach a higher profit margin. Using business analysis, companies can map out high-level strategies for improving products, services, and business processes, and embracing process digitization to better compete in the modern digital marketplace. While this advantage isn’t specific to software development, high-level planning impacts everything the company does, including building and modifying IT products.
Knowing where your company stands at par with the total market scenario, the value it provides for customers and stakeholders, and who your closest competitors are; these are all areas where business analysis shines. Modern data analytics provide a treasure trove of information about your customers and competition. But they can’t tell the whole story about the emotional values and needs that your software product helps satisfy, the challenges and wins experienced by end-users during its use, and how your product roadmap rounds out a niche that competitors fail to satisfy. One of the most important jobs of a business analyst is to analyze all of these factors and present the information in easy-to-understand formats that help product owners make decisions about how to move forward with project development. A great business analyst is also a great storyteller, using visual presentations to reduce complex data sets to easily digestible snippets that paint a complete picture of the market scenario for team members and stakeholders alike.
More and more, software companies are recognizing the benefits of business analysis for ensuring the highest possible quality of products, services, and customer relations. No other applied research discipline carries as much potential for helping to reduce project costs, increase production speed and efficiency, and create cost-effective, value-driven solutions for employees, customers, and end-users of all kinds. When it comes to embracing new technology and process digitization during the digital transformation, business analysis has all the advantages, tools & techniques to help any company grow.
You can check on of our first Business Analysis Case Study, where we share a success story from one of our digital consulting clients, and how they were able to leverage the benefits of business analysis to craft their future-thinking unique solution for the retail industry.