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Various Business Analytic Techniques
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7/21/2019 BA Tecniques
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Lecture-2, delivered on 06 Aug 2015
Prof. Hemant Kumar JainB.Sc (PCM), M.Sc (Phy) , B. Tech (Telcom & Elec) , MDBA, MS (Comp. Sc.) USA
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Business Analysis – Definition.BA – Techniques.Role of Business Analyst
Basic Tools for BABusiness Architecture from BA PerspectiveGuiding Principle for BA
Agenda
1-2
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Thinking Exercise # 2
You are likely to receive an amount
between Rs 40k to Rs 1.0L. Thismoney is to be spent today only.Please think , anticipate andprepare a list of items with approxcost you would like to purchase asper given format
MY Wish ListCategory S. No Item Name
Cost in Rs(Approx)
Priority as 1,2,3,4,5 etcMust Buy Should Buy Could Buy Won't Buy
Clothing
123…
Books12
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Business Analysis - Definitions
The methodical investigation, analysis, review anddocumentation of all or part of a business in terms ofbusiness functions and processes, the information usedand the data on which the information is based.
The definition of requirements for improving any aspect ofthe processes and systems and the quantification ofpotential business benefits. The creation of viablespecifications and acceptance criteria in preparation forthe construction of information and communicationsystems .
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The breadth of Business Analysis ?
Business case
Business analysis
Requirements engineering
Solution development
Strategic analysis
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Business case
Business analysis
Requirements engineering
Solution development
Strategic analysis
Sys tem s Think ing
Bu siness Arch i tec ture
Solu t ion A rch i tec ture
The breadth of Business Analysis ?
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Business Analysis Techniques
Business Analyst
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Some business analysis techniques
Critical success factorsContext diagramRich pictureFunction hierarchyNetwork architecture planWorkflow diagramOrganisation chartEntity relationship model (high-level)Business process modelHigh-level data flow diagramBusiness object model
Use case diagramUse case descriptionTechnical architecture modelFunctional dependencydiagramBusiness scenario modellingTask analysisBusiness event modelBusiness roles definitionLogical data modelClass modelRelational data analysis
Website navigation modelProcess dependency modellingObject interaction /collaboration diagramObject role modelsUser conceptual modelUser interface object modelScreen navigation designSystem event modellingState transition diagramState machine diagramObject dynamic model
SWOTPESTLEFive ForcesPower/interest gridMOSTResource auditBCG matrixBalanced business scorecardKey performance indicatorsCATWOEBusiness activity modelling
Event analysisPayback calculationDCF/NPV calculationInternal rate of returnBenefits managementBenefits realisationUser acceptance testingSwimlane diagramsBusiness process reengineeringBusiness process management
Process streamliningBusiness process redesignInterviewingWorkshopsQuestionnairesDocument analysisRecord searchingSpecial-purpose records
Activity samplingWork measurementPrototyping
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More business analysis techniques
BrainstormingRound-robinColumns and clustersBodyguards and assassinsVernissageTalking wallForce-field analysisGreenfield siteTransporterPrioritisationTime beam
Cost/benefit analysisImpact analysisGap analysisStandard costingMarginal costing
Absorption costingRatio analysisMoSCoWOrganisation diagramReport writingPresentation techniques
And even then people said “ You’ve missed …….”
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Role of Business Analyst
Business Analyst
Investigatingthe situation
Stimulatingthinking
Modellingbusiness
processes
Analyzingstrategy
Specifyinginformation
systems
Developingbusiness
case
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1. Investigating the situation
Workshops
Special purposerecords
Activity sampling
Workmeasurement
Interviewing
Recordsearching
Documentanalysis
Questionnaires<<extend>>
<<extend>>
<<extend>>
<<extend>>
<<extend>>
<<extend>>
Business Analyst
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2. Analysing strategy
<<extend>>
PESTLE
SWOT
Five forces
<<extend>>
MOST<<extend>>
Resourceaudit
<<extend>>
CATWOE
<<extend>>
Business Analyst
And many o ther techn iqu es
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3. Business Process Modelling
Business process modelling, often called processmodelling, is the analytical representation orillustration of an organization’s business processes.
Along with business process discovery, process modeling iswidely viewed as a critical component in successfulbusiness process management (BPM).
It is used to map out an organization’s current (or “as -is”)processes to create a baseline for process improvementsand to design future (or “to -be”) processes with thoseimprovements incorporated.
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3. Business Process Modelling Cont …
Business process modeling is mainly used to map a workflow, so that aBA can understand, analyze and make positive changes to thatworkflow or process. Different techniques used are :-
• Business process modeling notation (BPMN)• UML diagrams• Flowchart technique• Data flow diagrams• Role activity diagrams• Role interaction diagrams• Gantt charts• Integrated definition for function modeling• Colored petri-nets• Object oriented methods• Workflow technique• Simulation model
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4. Stimulating Thinking
A Business Analyst has to follow a number of different modes of
thinking for solving a problem
1. Critical thinking is a form of reasoning that challenges thinking and beliefs todetermine what is true, partially true, or false. For example, a business analystthinking critically would question the problem statement to make sure that it is
the real problem statement and not the description of a symptom beforeproceeding with the analysis.
2. Strategic thinking as applied by an individual involves the generation andapplication of insights and opportunities that extend beyond the presenttimeframe. While system thinking provides the business analyst the larger view interms of breadth, depth and context, strategic thinking provides the businessanalyst a larger view in terms of time.
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4. Stimulating Thinking (Cont ….)
3. System thinking is the process of viewing problems as parts of whole systems rather
than individual occurrences. The business analyst needs to view the organization and itsbusiness processes as a system or systems within systems to truly understand the impactsof the changes to the organization that the business analyst is bringing about.
4. Analytical thinking is essential to problem solving and goes hand in hand withcritical thinking. Critical thinking is specifically focused on thinking while analytical
thinking is focused on everything else. It is often difficult to see the complete problem orthe entire situation in which the problem exists under given complexities of business andtechnology. The business analyst breaks the larger picture into smaller more manageableimages to make examination and understanding easier.
5. Visual thinking is the only mode that might require a bit of predilection in that somepeople are more visual than others. But this thinking mode brings us all the way back tothe initial premise that we don’t think in words, but in images and concepts: visions
.
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4. Stimulating Thinking (Cont ….)
A business analyst should first do:
1. Thinking beforereacting
2. Questioning beforeaccepting
3. Verifying beforeassuming
5. Understandingbefore judging
6. Analyzing beforeconcluding
4. Viewing the wholeprocess before focusing
in on the detail issue
7. Visualizing beforewriting
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5. Developing a Business Case
A business case is an argument, usually documented, that is intended to convince a
decision maker to approve some kind of action. The document itself is sometimesreferred to as a business case. It should have :-
What is the problem we are trying to solve?What is the business opportunity?Problem
How can we address the problem or takeadvantage of the business opportunity?Solution
What are the viable options available toimplement the solution?Approach
What are the risk associated with each option?What is the risk of doing nothing ?
RiskAssessment
What business value is generated from eachoption?Value
Analysis
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5. Developing a Business Case
Benefitsmanagement
Cost /benefitanalysis
Impactanalysis
Benefitsrealisation
Presentationtechniques
Paybackcalculation
IRR
DCF/ NPV
Gap analysis
Marginalcosting
Standardcosting
Absorptioncosting
Ratio analysis
Business Analyst
Report writing
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6. Specifying Information System
1-20
The information system must facilitate:-• Rapid realization of business goals• Integration of independent processes and systems
• Multiple and Changing
• business requirements
• business processes• technologies• standards• enterprise boundaries• partners
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SWOTAnalysis
Oppurtunity
Threats
Strengths
Weakness
Technique is credited to AlbertHumphrey who led a researchproject at Stanford University inthe 1960s and 1970s.
Planning tool used to understandStrengths, Weaknesses,Opportunities, & Threatsinvolved in a project / business.
Used as framework fororganizing and using data andinformation gained fromsituation analysis of internal andexternal environment.
SWOT Analysis
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WEAKNESSES
Characteristics that place the firm ata disadvantage relative to others.
Detract the organization from its ability toattain the core goal and influence its growth.
Weaknesses are the factors which do not
meet the standards we feel they should meet.However, weaknesses are controllable. Theymust be minimized and eliminated .
Examples – 1. Limited financial resources,
2. Weak spending on R & D,3. Very narrow product line,4. Limited distribution & Higher costs,5. Out-of-date products / technology,6. Weak market image, Poor marketing skills,7. Limited management skills,8. Under-trained employees.
SWOT Analysis
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OPPORTUNITIES
Chances to make greater profits in theenvironment - External attractive factors thatrepresent the reason for an organization toexist & develop .
Arise when an organization can take benefit ofconditions in its environment to plan andexecute strategies that enable it to become
more profitable.
Organization should be careful and recognizethe opportunities and grasp them wheneverthey arise..
Examples – 1. Rapid market growth,2. Rival firms are complacent,3. Changing customer needs/tastes,4. New uses for product discovered,5. Economic boom,6. Government deregulation,
7. Sales decline for a substitute product .
SWOT Analysis
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!
THREATS
External elements in the environment thatcould cause trouble for the business - Externalfactors, beyond an organization’s control.
Arise when conditions in external environment jeopardize the reliability and profitability of theorganization’s business.
Compound the vulnerability when they relate tothe weaknesses. Threats are uncontrollable.When a threat comes, the stability and survivalcan be at stake.
Examples – 1. Entry of foreign competitors,2. Introduction of new substitute products,3. Product life cycle in decline,4. Changing customer needs/tastes,5. Rival firms adopt new strategies,6. Increased government regulation,7. Economic downturn.
SWOT Analysis
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P – Political The current and potential influences from political pressures
E - Economic The local, national and world economic impact
S - Sociological
The ways in which changes in society affect the project
T - Technological How new and emerging technology affects our project / organization
L - Legal
How local, national and global legislation affects the project
E - Environmental Local, national and global environmental issues
PESTLE
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M.O.S.T.
MissionA good mission is ambitious and essential to broader business success. It couldeven be the entire reason for the organisation’s existence. Once it has beenestablished, the rest of the M.O.S.T. analysis can begin.Missions should be reviewed when they have succeeded or found to be flawed.
ObjectivesA good objective sets a clear target to achieve within a tight time-frame. Ideally,it will complement your other objectives to compound successes across theM.O.S.T. analysis.Objectives should be reviewed if they are found not to help the mission.
Objectives should be Specific, Measurable, Achievable, Realistic and Timely(S.M.A.R.T.), otherwise goal-creep will set in and objectives will become fuzzyand difficult to implement.
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Strategies
Strategies are the options open to achieve objectives. These may be quitecomplex, involving many tactics, and they may overlap to an extent. Strategiesare an implementation detail. Strategies offer a way to quickly review andgroup the tactics implemented on the ground floor, so they make sense asmethods to achieve your objectives.If strategies do not accurately describe the tactics being used, or do not workdirectly towards your objectives, you should review them.
TacticsTactics are the methods you will use to carry out your strategies. They shouldbe simple and relatively discrete processes that can easily be understood andcarried out even by people who don’t have a high -level overview of theM.O.S.T. analysis.A good tactic is small and S.M.A.R.T. With effective tactics, your strategies willquickly lead to completed objectives.
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Resource Audit
Resource audit can be described as analysis orinspection of resources of an organization. It canalso be called as Internal Resource Analysis.Resources includes tangible as well as intangible.
The term audit has been derived from Latin word“audire ” which means hear. In simple terms audit
can be defined as official inspection.
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Resource Audit
STRATEGIC IMPORTANCE OF RESOURCES:
Resources which an organization possess. Resourcesthat are deployed into the activities of theorganization to create competences. Resourcesinclude both those that are owned by the organizationand those that can accessed to support its strategies.
Resources are grouped under the following heads :
Physical Resources, Human Resource, FinancialResources, Intellectual capital
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Resource Audit
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CAT WOE
Customers Who are they, and how does the issue affect them?
ActorsWho is involved in the situation? Who will beinvolved in implementing solutions? And what willimpact their success?
Transformation ProcessWhat processes or systems are affected by theissue?
World View What is the big picture? And what are the widerimpacts of the issue?
OwnerWho owns the process or situation you areinvestigating? And what role will they play in thesolution?
Environmental Constraints What are the constraints and limitations that willimpact the solution and its success?
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The Five Forces
Force
Entry
Rivalry
Substitutes
Buyers
Suppliers
Method for Neutralizing Force
Erect ing b arr iers (isola t ing m echanism s) create& exploit economies of scale, aggressivedeterrence, design in switching costs, etc.
Compete on n onpr ice d imens ions : cost
leadership, differentiation, cooperation, etc.
Imp rov e a t t ract iveness com pared to substitutes :better service, more features, etc..
Redu ce bu yer un iqueness : forward integrate,differentiate product, new customers, etc..
Redu ce supp l ier uniqu eness : backward integrate,obtain minority position, second source, etc..
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Organisation
Processes People
Information&
Technology
POPIT™ – taking a holistic approach
Business Architecture Blueprints
BusinessMotivations
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Organisation
Processes People
Information&
Technology
POPIT™ – taking a holistic approach
Business Architecture Blueprints
Business Models
External Business EnvironmentOrganisational CapabilitiesOrganisational Memory
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Organisation
Processes People
Information&
Technology
POPIT™ – taking a holistic approach
Business Architecture Blueprints
Business Models
External Business EnvironmentOrganisational CapabilitiesOrganisational Memory
Value Propositions
Value ChainsCore Business ProcessesBusiness Services
Roles and Job DescriptionsSkills and CompetenciesManagement ActivitiesCultureCommunication
k h l h
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Organisation
Processes People
Information&
Technology
POPIT™ – taking a holistic approach
Business Architecture Blueprints
Business Models
External Business EnvironmentOrganisational CapabilitiesOrganisational Memory
Value PropositionsValue ChainsCore Business ProcessesBusiness Services
Roles and Job DescriptionsSkills and CompetenciesManagement ActivitiesCultureCommunication
Business Information ModelsInformation StandardsTechnical ArchitectureApplication Architecture
PARADE
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PARADE
PARADE : These 6 factors mean:• PROBLEM -- What is the problem an organization is facing/faced?
• ANTICIPATED CONSEQUENCE -- What consequence an organization will faceif this problem continued without resolution?
• ROLE -- What was the role of a employee in resolving this problem?
• ACTION -- What action has been taken by an employee
• DECISION-MAKING RATIONALE – Explanation of the action taken. Optionconsidered? What other options were available? Why other options werenot chosen? Why this specific decision? What quantitative & qualitative datahas been considered?
• END-RESULT -- After an action has been taken, what happened? What wasthe outcome? Be specific -- when possible, cite a quantitatively measurableoutcome.
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Rich Picture
Rich pictures are a strategy of Soft Systems Methodology(SSM), in which complex situations are represented in a largediagram with pictures and symbols. The principle behind richpictures is that drawing detailed representations ofproblematic situations can be a tool to organize thoughts,
better understand what is going on in the system, andidentify root problems. As such, the value of rich pictures isthat it encourages people to think deeply about the problemand understand it well enough to express it pictorially.
A Rich Picture is a way to explore, acknowledge and define asituation and express it through diagrams to create apreliminary mental model. A rich picture helps to opendiscussion and come to a broad, shared understanding of asituation.
Rich Picture
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Rich PictureConstruction of Humper Bridge
Rich Picture
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Rich Picture
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Timebox Development
CSE 4317 44
The Timebox
Build &Evolve
Prototype P r o
t o t y p e
R e q u e s
t f o r
C h a n g eSystem
Definition/Priorities
Product
RequiresModifications/
Rejected
End-userReview &Feedback
Review BoardNeed for large-scale change orenhancement
Evaluate/DeliverSystem
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A CRUD matrix (Create, Read, Update, Delete) is a table thatshows the links between processes and data, or betweenprocesses and resources. When a link exists, it shows whetherthe process performs a Create, Read, Update, or Deleteoperation on the data or resource.
When the CRUD matrix shows the links between a process anda data, it is called a Data CRUD matrix.
When the CRUD matrix shows the links between a process anda resource, it is called a Resource CRUD matrix.
CRUD Matrix
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CRUD Matrix
Wh t i B i A hit t ?
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What is Business Architecture?
“The structure and behaviour of a business system . Covering business functions
or capabilities, business processes and the roles of the actors involved in these.
Business functions and business processes are mapped to the business goalsand business services they support, and the applications and data they need”
"A blueprint of the enterprise that provides a common understanding of theorganization and is used to align strategic objectives and tactical demands."
“The business strategy, governance, organization, and key business processes.” TOGAF
or simply:
Business Architecture Guild
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Uses of a Business Architecture
Develop a perspective on an organisation’s strategic/competitive
differentiators , and fully understand what it is and what it is doing
Understand the key value streams used to deliver its value proposition
Provide a way to quickly and effectively implement strategy throughdefined approaches, processes and organisation wide frameworks
Make better-informed and more comprehensive business decisions
Solve complex enterprise business problems
Define detailed business needs , to be used as input for business and ITsolutions
Ensure the success of an overall Architecture by serving as the drivingforce for the IT Architecture
Business Architecture fit within an organisation
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Business Architecture fit within an organisation
Strategy Architecture Execution
Strategy drives changes toArchitecture
Architecture informs andrefines Strategy
Architecture translatesStrategy for Execution
Execution enables andgenerates improvements to
Architecture
Creates a direct, clear linkage between executive intent and organisational action
Provides a structured approach to making strategic and operational investment decisions
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The role of the Business Architect
The Business Architect converts high-level business strategyand business needs …….
……. into an integrated vision of the future
……. and then redesigns the business capabilitiesnecessary to deliver the goals of the vision .
This provides a holistic, complete and co-ordinatedset of business models the best of which becomeroadmaps for future profit and growth.
These roadmaps can then broken down into initiativesfor implementation
B i A hit t F k
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Business Architecture views(Blueprints)
Business
ArchitectureScenarios
Business Architecture Framework
BusinessMotivations
xamples of Business Architecture documentation
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xamples of Business Architecture documentation
• Business Context• Business glossary of terminology and concepts• Business capabilities (represented in a Business
Capability Model)
• Detailed Business Capabilities (Business Requirements)• High level business processes (often represented in avalue stream model)
• More detailed business processes and workflows• Organisational units and roles• Business rules• Business data elements and metrics
S h d thi ff t R i t E i ?
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So how does this effect Requirements Engineers?
• To contribute to the bottom-up construction of theBusiness Architecture
• Help evaluate business ideas and initiatives
• Assess impact of suggested changes
• Encourage re-use
• Model using architecture artefacts
• Understand knock-on effects of change
• Ensure changes are reflected back into the architecture
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Guiding principles for business analysis
• Root causes: not symptoms
• Business improvement: not IT system change
• Creative options: not prescribed solutions
• Feasible requirements: not all suggestions
• Entire lifecycle: not just requirements definition
• Negotiation: not conflict avoidance
• Business agility: not business perfection
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