In the present complex business scenario, the role of a business analyst has become very crucial to the success of a business. But what role does a business analyst play? Let us see…
Going by the literal meaning of the words, a business analyst is a person who performs analysis of the business. Now what do we mean by analysing a business?
‘Analysing a business’, in simple terms, means understanding the ins and outs of the business or studying the various components of a business with a view to determine the present state , the targeted position, the study of the gap and the solutions for filling the gap.
Components of the business
There are basically the following components –
Mission and vision statements of the business,
The activities of the business,
The location of the business and the competitive advantage it offers,
The product portfolio
The markets business operates in
The stakeholders of the business
The competitors of the Business
The sources of revenue
- Mission and Vision statements
Mission statement – It is the purpose for which the business exists. It defines the objectives of the business and approach to reach those objectives. It basically outlines what the company wants to do in present and gives an idea about broad goals of the company.
Vision statement – It is statement giving answer to the question – “where the company wants to be in future say 5 or 10 years from now?”
- The activities of the business
It includes analysis of what all activities business performs and whether they are in line with the objectives and future goals of the business.
The location of the business and the competitive advantage it offers
It states where the business is situated and what advantages the business has due to its location in comparison to its competitors.
- The product portfolio
The study of the products/services that the company markets, the benefits that the company is getting by marketing that product/service and what still needs to be done on this front.
- The markets business operates in
It includes the study of the markets in which the company has its operations and the advantages of operating in those markets. Also what all markets it needs to enter and how to make its business flourish in those markets has to be seen.
- The stakeholders of the business
The employees, customers, creditors, owners, shareholders, government, suppliers, distributors, investors, Labour Unions and the community at large constitute the stakeholders of the business. The relationships with the stakeholders affect the organisation in a big way. So, study of the details of these stakeholders becomes important.
- The competitors of the Business
This includes the study of the competitors of the business and the strategies business has undertaken to deal with those competitors.
- The sources of revenue
This involves the studying what businesses of the company are generating revenue for the company, which are the profit-making propositions and how much profit do they earn for the company.
Business Analysis, besides study of above components, may involve study of financial position of the company and SWOT (Strengths, Weaknesses, Opportunities, and Threats) Analysis of the company.
Once the report of the above study is ready, requirement analysis can be easily done, that is, where the business is currently and where it wants to be, as regards the above components. This comparative analysis will give a picture of the gap between the two. Further, the business analyst is required to find out solutions for filling the gap. These solutions may relate to implementing change in certain systems or processes, developing technology-related solutions or implementing strategy/policy level changes.
Thus, the importance of business analyst in today’s dynamic business environment, cannot be overemphasized.