32. Business Analysis is Strategic
Situation Analysis
Defines or explains the nature of the challenge.
Identifies critical elements of reality.
Solution
Approach Overall approach chosen to cope with or overcome
obstacles identified in situation analysis. Describes how
we will create leverage or advantage.
Coherent
Action Steps or actions co-ordinated with one another to carry out
solution. Addresses risks, obstacles, resources, and
changes needed. 32
33. Business Analysis is Strategic
Situation Analysis
Defines or explains the nature of the challenge.
Identifies critical elements of reality.
Solution
Approach Overall approach chosen to cope with or overcome
obstacles identified in situation analysis. Describes how
we will create leverage or advantage.
Coherent
Action Steps or actions co-ordinated with one another to carry out
solution. Addresses risks, obstacles, resources, and
changes needed. 33
34. Business Analysis is Strategic
Situation Analysis
Defines or explains the nature of the challenge.
Identifies critical elements of reality.
Solution
Approach Overall approach chosen to cope with or overcome
obstacles identified in situation analysis. Describes how
we will create leverage or advantage.
Coherent
Action Steps or actions co-ordinated with one another to carry out
solution. Addresses risks, obstacles, resources, and
changes needed. 34
35. “Bad strategy…ignores the
power of choice and focus,
trying instead to accommodate a
multitude of conflicting demands
and interests.”
Richard Rumelt
Introduce myself.\n\nThere is no silver bullet. I can’t make delivering value easy. My goal is to make it easier for you to talk about it and to identify it.\n\nAgile created a focus on business value--because agile methods require that every small set of functionality have a definable value. However they have struggled to define it as have many others. The draft PMBOK pretty much gave up on that, for example. \n\n \n
My first IT business analysis job was for a bank. Talk about NAS, conflicts between stakeholders, lack of definition of value. Issues around MLI, DocGen, Inbound scanning. \n
Was the project successful? Hard to say. Despite increasingly fictional business case, it did roll out (two years late) and remained in use for a long time after (not sure if it is still in use today). Note that figures here are illustrative and not necessarily exact. \nFailed attempt to replace it a few years back cost more before collapsing.\n
So what is value? Dictionary definition is that it's what something is worth. Agile Extension defines it as:\n\n...something that increases or protects revenue, reduces or prevents cost, improves service, achieves compliance, or positions the company or the future in alignment with the business strategy. \n
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Coming in v3. Some of this talk includes terms and concepts we’re possibly adopting in future editions of the BABOK Guide but no commitments there.\n The BA Framework is a conceptual model describing the important concepts in \n
Value is linked to a capability.\nBusiness change projects may create value, or allow for the possibility of creating value\nSolutions are intended to increase the value associated with a capability or prevent it from decreasing in value\nValue is judged by stakeholders\n Different stakeholders have different perceptions of value\n Decisions about value are easiest to make when the perception of a single stakeholder is favored \nValue can be positive, zero, or negative\n Value can be expressed as benefit - cost \nValue does not have to be financial, but businesses tend to pay more attention if it is.\nValue may change over time\nValue and strategy are not necessarily in alignment\nStrategy represents a hypothesis about how to generate the greatest amount of business value\nStrategy is generally a collection of steps, each of which contributes to the overall value of the strategy\nElements of the strategy may deliver little value but be critical to its success \nNot all value can meaningfully be quantified\nNot all value can be immediately realized\n\n
Stakeholders are\n Motivated by the opportunity to increase or protect the value they perceive\n Rewarded by the delivery of value\n Can create, protect, transfer, or destroy value for other stakeholders\n They have existing relationships with other stakeholders. We may create new ones.\n Stakeholders with significantly different perceptions of value in a particular context probably cannot be treated as a single group. \n
Needs are unique to each stakeholder. \n
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When we define a requirement, we are making a statement that this thing has value.\n
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Your organization doesn’t have to have a Balanced Scorecard in place, these categories are just things that are generally agreed on as having value to organizations and for which a lot of work has been done in figuring out ways to assess them.\n\nOther categories are sometimes considered: Environmental Impact, Mission, Employee Satisfaction, etc. \n\nValue can take many forms: work, money, information, reductions in uncertainty, services, products, reputation, options, agility\n\nSometimes you may struggle to categorize a thing. That is not a real problem. It's most important to know that it has value. \n
We do a bad job of this where projects are concerned. Financial projections are full of assumptions about changes in behavior and require post-project follow through. Often those changes don't occur. \n\nOther problem is that cash flow during project lifetime is usually strongly negative and we don't do well at forecasting. Project improvements benefit the bottom line by increasing capacity or reducing costs to support a product or service. Projects may also be required to "keep up", meaning that they prevent loss not create new cash.\n\nTypically measured using things like ROI, ROA, IRR, NPV, Payback\n\nIICM example. Note that Project X is not IICM. These are totally made up numbers.\n\n
Customer value is based on the viewpoint of the people the organization is trying to serve. How can we tell if they think the outcome is valuable?\n\n* Time \n* Quality\n* Product\n* Service\n\nZone of indifference--near the middle of the box nobody cares.\n\n\n\n\n
Measures operational effectiveness of the organization.\n Can include competencies as well as processes\n \n Value is captured if and only if the following criteria are met:\n Another stakeholder is willing to pay for it to be done\n The end product is changed, modified, or transformed in some way\n It must be done right the first time\n \n \n
How well does the organization innovate and learn? Can include new product creation, enhancement of current products, innovation and agility, staff skills development, etc.\n
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this kind of analysis can be performed on any work: use case, process, capability as well as a solution as a whole. \n\nGood questions to ask about value: who, how, what, where, why, when, how much?\n\nMention "stored value".\n\n \n
Value is captured when a stakeholder produces something that the organization needs, and the solution ensures that the organization gets it. \n
Examples: I lose my job. My job becomes more limited. The new system is harder to use. I can’t support specific customer needs. \nPeople react very strongly to perceived loss. Discuss prospect theory.\nValue delayed can evoke the same reactions as value destroyed\n
Value is protected by a solution when we take steps to avoid the destruction of value\n Blocking action by a competitor\n Preventing security breaches \n
Money, information, reduced uncertainty, reduced work, \nValue is created when the solution provides something that a stakeholder desires.\nHobbies may be justified on a learning and innovation basis. \n
Value is transferred when a solution enables two stakeholders to exchange value through the organization.\n\nDifferences in perceived value can be very important here. \n
If doing a value map for a single use case, you may want to talk about "stored" value--that can occur when you capture or transfer value, but the creation or completion of the transfer occurs at another time. \n
Value is much more than financial value. Business value is anything that helps the organization survive and thrive. \n
As a business analyst, your job is to separate the things that truly deliver business value from the things that don't. Don't limit yourself to thinking that strategy is something that only happens at the top of a company. A project has a strategy. \n\nStep 1, and possibly half of strategy, is learning to see. To deliver value in any context you must first know what is really happening.\n\nOpen ended, not closed.\n
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What are the risks and obstacles you will face implementing the solution approach? What can go wrong? Is the organization ready for that solution? \n
The responsibility of the BA is to understand and maximize business value, not stakeholder value. That means we need to focus..and focus on the customer. The question we always have to answer is who are we really serving?\n\nAgile tried to solve this problem by making one person (the product owner) responsible for all outcomes. Its a fine idea when it works, but we find it often doesn’t. \n\nRemember that delivering business value is always about making hard choices. They wouldn't pay you if they were easy. The ability to identify and promote the decisions that deliver real value is the key skill that will make you successful. \n