Business Analysis: Its Nature and Role - Research Paper Example

BUSINESS ANALYSIS 0. INTRODUCTION The contemporary period is marked by changes and developments, which are considered unique only for this milieu. These two important developments are globalization and advances in computer and information technology. Although globalization has various uses and connotations, but in economics and business it generally refers to the removal of trade barriers existing among countries, which in turn allows for a freer movements of goods, capitals, services, information, people, culture and knowledge (Soros 2005; Suarez- Orozco & Qin-Hilliard, 2004; Mishkin 2007). Concurrent with globalization is the fast phase development in computer and information technology. The developments in the field transformed not only information itself but also the manner of its collection, handling, processing and storing (Axelrod 2004). In this regard, both globalization and information technology have undeniably altered the nature of business and the manner of conducting businesses (Stead & Stead 2006). In light of these developments, the paper will be looking into the role and evolution of business analysis within the last thirty years and possibly come up with trends and projections within the field in the next five years. In this regard, this study aims to understand the notion of business analysis. Likewise, it aims to identify the role of business analysis in an organization. Finally, it tries to know what will be the possible trends and developments in the field of business analysis in the next five years. As such, the main questions of the research are ‘what is the role of business analysis?’ and ‘where is business analysis going?’ These questions are significant because it deals with one concrete instance in contemporary society where the needs of society and technology meet (Mumford 2006) and it seeks to find out how to enhance further the symbiotic relation between man and technology in the business world. To address the questions of the study, a documentary research had been conducted. The electronic databases Academic Source Premier, Business Source Premier, Jstor, and Google Scholar had been searched using the combination of the following key terms: business analysis, computer and information technology, globalization, nature of organization, and business. Articles written only in English and published in journals from the period of 2005 – 2010 had been selected. Likewise, books and empirical studies had been included in the searched. Excluded in the selection were monographs, position papers, editorials and pamphlets. The reference list of the articles was searched to identify additional relevant publications. The paper is divided into four parts. The first part is the introduction where the questions of the study, the aims of the research, the significance of the study, the research methodology use in the study and the structure of the paper are presented. The second part will deal with the concept of business analysis and the identification of the role of business analysis. The third part will be the discussion regarding the possible trends in the field in the next few years. Finally, the fourth part will be the summary and conclusion of the paper. In the end, the researcher hopes that this study helps in further clarifying the notion of business analysis. 2.0. BUSINESS ANALYSIS: ITS NATURE AND ROLE According to the International Institute of Business Analysis (2006), business analysis is “the set of tasks, knowledge, and techniques required to identify business needs and determine solutions to business problems. Solutions often include a systems development component, but may also consist of process improvement or organizational change” (p. 21). Moreover, business analysis involves Identification of business problems and opportunities Elicitation of needs and constraints from the stakeholders Analysis of stakeholders needs to define requirements for solution Assessment and validation of potential and actual solutions Management of the product or requirements scope SOURCE: Carkenord, 2009 One important facet of business analysis that is manifested in the definition and the various tasks that are involved in business analysis is the centrality of information in the performance of business analysis. Possession of the right and necessary information becomes integral in the identification and determination of business needs, problems, opportunities and, possible solutions to the business problem. In this scenario, the picture of the contemporary business and the condition where it is working provide the framework with which business analysis becomes an essential part for the survival of organizations in the 21st century global market. For organizations to succeed, there is an inherent necessity for the organization to identify the goals, needs and problems that the corporation may encounter as it conducts its business. Basically, the satisfaction of the shareholders, the satisfaction of the stakeholders and the attainment of the company’s visions are the general goals of the organization. The needs and the problems normally vary from one organization to another. As such, a more individualize approach is necessary in determining these two factors affecting the organization. Through business analysis, one already sees the differentiated nature of contemporary organizations. In the past, business are primarily conducted with the sole purpose of securing profit only and satisfying the interest of the shareholders, which is profit and more profit (Mälovics et al 2008). However, due to the recognition of the importance of stakeholders, of the notion that corporations are not in a vacuum but are social actors and that their obligation moves beyond profit but is geared toward consumer s’ satisfaction and stakeholders’satisfation (Comite 2009; Davidson 2009). As such, in the contemporary period, businesses go beyond the economic rationality of profit. Organizations recognize that the way to increase shareholders’ gain is by increasing stakeholders’ satisfaction (Zolsnia 2006; Mälovics et al 2008). As changes in the nature of contemporary businesses are happening, computer and information technology has gained such development that it has moved outside the parameters of military application and artificial intelligence (Arnott 2007). In fact, during 1960s organizations “organizations were beginning to computerize many of the operational aspects of their business. Information systems were developed to perform such applications as order processing, billing, inventory control, payroll, and accounts payable” (Arnott 2007, p 68). Business analysis gained momentum during the 80s (Guidici 2003). In fact, it is born around this period (Beuchamp 2007). What happened? Prior to the 80s, most information systems were limited only to several applications and were commanding an exorbitant price. As such, most organizations during that time relied heavily to paper based data. Moreover, information technology suffered from the following limitations storage of the electronic data was expensive the way data was stored was cumbersome (flat files read sequentially in one direction only). programs were difficult to write in abstract languages there was only a limited set of functionality based around mainframe processes user interfaces were delivered on basic green-screens SOURCE: Beuchamp, 2007 However, by 1980s things have changed. During this time computer and information technology have been evolving in such a fast phase that “ data storage has become cheaper and covers not just paper based data but audio and visual data too; relational, object orientated and other databases have made access to data easier; programming languages have evolved in usability and functionality and, processing is no longer constrained to mainframes but distributed with increasingly sophisticated user interfaces. Then along came the internet generating a whole new market place and set of business models” (Beuchamp 2007, p 2). These changes have made access and availability of information a lot easier to concern individuals. As such, business decision-making becomes anchored on necessary and right information provided by the information technology adopted by the corporation. Moreover, this reality has given managers and business analysts more options and a clearer perspective with which they base their decisions. Fig 1 The figure shows that as globalization becomes the condition with which changes in the organization and rapid developments in computer and information technology are happening. In addition, it has brought forth the era of information, which pertains to the central importance of the role of information in the survival of an organization in the global market. This condition and developments working together have paved the way for the growth of business analysis in the last thirty years. It should be noted that business analysis is not just IT (Bull 2007). It cannot be denied that information technology plays a primordial role in the development of business analysis (Beuchamp 2007; Arnott & Pervan 2007; Mumford 2006; Carkenord 2009), for developments in the field have enabled easier access to necessary information. However, information per se is not enough in coming up with the right decision. In fact, the presence of numerous available data opens an increase probability of committing erroneous decisions (Beuchamp 2007). As such, the human role in business analysis cannot be downplayed as it is as important as the information and the technology use in collecting, assessing, extracting information, interpreting and mining the data (Mumford, 2006; Giudici, 2003). Fig. 2 The figure shows that business analysis is the working together of people, of the organization, of computer and information technology and, of information toward achieving a goal or addressing a problem. These four factors have to work together to capitalize on business analysis. Furthermore, in the actual application of business analysis Beauchamp (2007) suggests as business analysis is a chain of reasoning, it should incorporate business drivers (reasons for change) business vision (ideal state of the business post change) business objectives (the measures that prove the vision has been realised) business deliverables (what components will change the measures defined in the objectives) business requirements (what needs the business have that are in scope) business rules (what rules must be enforced as part of the requirements) Furthermore, the link in this chain of reasoning present business analysis handles a business problem and arrives at a solution (see Appendix 1 for the link). As such, the roles of business analysis are 1. Identifying and determining the needs and problems of the organization (Carkenord, 2009) 2. Coming up with viable and appropriate designs for the solution of the problem (Beuchamp 2007). 3. Delivery of the solution to the problem (Beuchamp 2007; van der Aalst et al 2007. 4. Increasing the value of the business (Bull 2007). For these roles to be fulfilled, people, IT infrastructures, information and, organization must be working together to address the problem and meet the requirements that are necessary for organizational change. The interdependence of each factor that is necessary for business analysis to be successful and rewarding. In this regard, understanding the nature and role of business analysis in businesses opens the question where is business analysis going? BUSINESS ANALYSIS IN THE NEXT FIVE YEARS As business analysis is an important tool that identifies and determines the needs and problems of the organization with information technology, it is deemed that in the next few years business analysis will be 1. Business analysis will become more responsive to the needs and problems of organizations as computer and information technology developments will continue to be in a rapid phase. At the same time, technical people will continue developing hardwares and softwares that are responsive to the actual needs and context of the user (Mumford 2006). 2. Business analysis has to adapt to the changing preferences of the consumers. One way that business analysis can fully integrate it in its technique is through the organization’s adopting corporate social responsibility as part of its goals and visions. Although corporate social responsibility has several definitions, which results into variegated approach toward it (Dahlsrud 2006), still it cannot be denied that one of the surest way to satisfy consumers in the 21st century is for corporations to be socially responsible (Memery et al, 2005) . 3. If people will continue looking at business analysis as part of systems analysis and not as an integrated part of business itself, then “Systems Analysts will take over the Business Analyst role and develop analysis products fit for their purposes (developing computerised systems) and not necessarily fit for business purposes (developing solutions maybe including computerised systems, business procedures, organisational units to operate procedures and so on)” (Beuchamp 2007, p. 4). 4. There will be an increasing need for the field to distinguish itself from other business tools and management techniques by coming up with methods and approaches that are distinctively ‘business analysis approach’ and not a mere redundancy of other problems and risks management techniques (Bleistein et al 2006). SUMMARY The International Institute of Business Analysis defines business analysis as “the set of tasks, knowledge, and techniques required to identify business needs and determine solutions to business problems. Solutions often include a systems development component, but may also consist of process improvement or organizational change” (21). It is important to note that business analysis does not only involve the use of current developments in computer and information technology. It also involves the organization and the human resources. All three are working together to identify and determine the needs, the problems and, the viable solution to the problems of the business that will effect not only change in the organization, but will increase its value as well. Furthermore, business analysis as chain of reasoning (Beuchamp 2007), it includes several notions such as business drivers, business visions, business objectives, business deliverables, business requirements and business rules. The link provides a clear pathway on how business analysis approaches business problems and delivers solutions to it. Although the tools use and approaches employed may vary, nevertheless, what is significant is that the process contains the notions involve in business analysis chain of reasoning. The future of business analysis lies on developing IT that is more responsive to user needs and user context. Moreover, the significant role of CSR will play a more prominent part in business analysis. Finally, the need to demarcate and distinguish business analysis from other forms of analysis to highlight the fact it is an integral tool for business survival in the 21st century will become necessary for the field’s sustainability in the future. CONCLUSION Business analysis is not just information systems analysis. Although it is ascertained that the use of developments in computer and information technology in the analysis is an essential and fundamental part of the entire process of business analysis, the need to see business analysis as a valuable tool and integrated strategy for business success is necessary. Business analysis is people, technology and organization working together toward the attainment of goals and visions of the organization, toward the common good. REFERENCES: Arnott, D & Pervan, G (2007) ‘A Critical Analysis of Decision Support Systems Research’, Journal of Information Technology, Vol. 20, pp 67 – 87. Beuchamp, G (2007) ‘Fundamentals of Business Analysis’, Retrieved from www.businessanalystssolution.com Accessed on 3 December 2010. 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Mumford, E (2006) ‘The story of socio-technical design: reflections on its successes, failures and potential’, Information Systems Journal, vol. 16, pp 317 – 342. Soros, G (2005) George Soros: On Globalization, New York, Public Affairs. van der Aalst,W, Reijers, HA, Weijters, AJMM, van Dongen, BF, Alves de Medeiros, AK, Song, M and Verbeek HMW (2007) ‘Business Process Mining: An Industrial Application’, Information System, vol. 32, iss 5, pp 713 – 732. Zsolnai, L (2006). Competitiveness and corporate social responsibility, CSR Paper, Retrieved at http://www.feem.it/Feem/Pub/Publications/CSRPapers/default.htm. Accessed on 3 December 2010. APPENDIX 1 Read More