Bibliography

Cohen, Allan R. and David L. Bradford (1991). Influence without Authority. Wiley.

Covey, Stephen R. (1989). The 7 Habits of Highly Effective People. Free Press.

Lojeski, Karen Sobel (2008). Uniting the Virtual Workforce: Transforming Leadership and Innovation in the Globally Integrated Enterprise. John Wiley & Sons.

Morello, Diane and Michael J. Belchar (2005). Research Paper: Business Analysis Placement, Competencies and Effectiveness. ID Number G00126718. Gartner.

Nielsen, Jakob (1993). Usability Engineering. Morgan Kaufmann.

Standish Group (2006). 2006 Chaos Report (www.standishgroup.com).

Chapter 3: Know Your Project

Most of the work assigned to business analysis professionals is within the confines of a project. A project is a temporary endeavor initiated to achieve very specific goals. It is critical for the business analyst (BA) to thoroughly understand the project to which he or she is assigned. The BA must be aware of the parameters set for the project, the individuals involved with the project, and most importantly, the purpose of the project. Without clearly knowing the goals of the project, an analyst will not be able to focus elicitation and analysis in the right direction. Knowing why the project was initiated is the first step in business analysis planning.

To help understand the goals of each project, a BA should be aware of the organization’s strategic vision and long-term goals. The enterprise strategic plan is the organization’s road map to long-term success. Each individual project supports a piece of the strategic plan. The BA’s work during project initiation is to understand the alignment with corporate goals and plan analysis activities to best support those goals.

Why has the organization decided to fund this project?

It is critical for the BA to understand why the organization has decided to fund his or her project. The business analysis professional must be sure that analysis work is always aimed toward accomplishing the business objectives and is aligned with the organization’s mission. Project work always costs money, even if a project involves only internal resources (such as employees). Employees are very expensive resources and need to be used wisely. Everyone on a project, especially the project manager (PM) and the BA, should be constantly evaluating the expenditures against the expected benefits. If they have been assigned to project A, then project B is not being done. Every organization faces these trade-offs.

For many projects, the benefits to the organization are very obvious. You offer customers the opportunity to purchase products over the Internet because you expect to increase sales. You streamline a complex business process to decrease costs. But some project benefits are not so easy to see. The successful BA must know the underlying rationale for funding a project (from the viewpoint of the project sponsor) before he or she can begin analyzing and understanding the requirements.

Business Case Development

Most organizations decide to fund a project because they anticipate a return on the investment. A business case describes this anticipated return. For a BA to know a project, he or she must understand the business case. It may have been developed by the business sponsor, stakeholders, or PM. Sometimes the BA will be asked to develop the business case as the first task of a project or before a project has been approved. Understanding the importance of developing business cases is a key business analysis skill.

Have you ever tried to convince your spouse that you should get a new car? How do you decide to hire someone to cut your grass rather than do it yourself? Why did you decide to buy a new pair of shoes or install cable TV? When you are working to persuade someone (even yourself) to take action, you are building a case. You think through all of the positive results that will occur if the project is approved. You prepare to counter any objections that your decision maker has. You evaluate the potential benefits and weigh those against the anticipated costs/effort, and when the benefits outweigh the costs, the action is approved. Companies have to make these decisions all the time. They are presented with ideas and opportunities and need to evaluate the relative merit.

A business case is an explanation of why the organization has decided to go forward with a project. The word case comes from the legal profession and means an argument for or against something: “We are building a case for . . .” Business cases, which depict the value of an endeavor, have become more common as organizations realize that projects may be expensive and sometimes do not deliver the expected results. A business case documents the justification for a project for executive decision makers and provides a mechanism to evaluate the success of the project at its completion.

Related activities are called feasibility studies and cost/benefit analysis. A feasibility study determines the practicability and workability of a potential solution before a project is approved. It answers the question: “Can it be done?” Cost/benefit analysis focuses on a financial analysis of the potential solution, using economic calculations to project the potential return on investment and payback period. It answers the question: “What are the costs vs. benefits of doing it?” Some costs and benefits are not easily measured. Benefits like goodwill and positive public relations are referred to as intangible. Costs that are easily measured are referred to as tangible. Many business cases include a feasibility study and cost/benefit analysis.

BAs are often asked to write and present a business case for a project or potential project. This is a very important skill for a senior BA who is interested in moving into consulting, strategic planning, or corporate management. Building a business case can be challenging because it requires significant research, analysis, and strong communication skills. But the task seems harder than it really is. BAs are good at research and analytic thinking. Building a business case involves bringing together research, logical reasoning, and financial estimates. In addition, business case development requires creativity and big-picture thinking.

Business case development and cost/benefit analysis are important skills for business analysis professionals to develop early in their careers. Although a formal business case document is not created for every project, someone in the organization should always consider a project’s worth before funding is approved.

Think about convincing your spouse (or yourself) that your family needs a new car. Take a few minutes to think about the costs vs. benefits. Try to break down your thoughts— analyze your decision-making process. You can start by looking at the pros and cons of the decision, as shown in Figure 3.1.

Figure 3.1: Pros and Cons of Buying a New Car

Be sure to list everything, regardless of whether or not it can be measured or costed. Cost/benefit analysis often includes items that are intangible or difficult to measure, like “fun to drive.”

Next look at each pro and con to determine if there is some way to quantify it. The more quantifiable the analysis, the more objective it will be. If you can show your spouse that a new car will require a smaller monthly cash outflow, then you would probably have a pretty good business case.

Research costs to represent the most accurate picture possible. When you must estimate, document the assumptions upon which you based the estimate. See Table 3.1 for the one-time costs and Table 3.2 for the monthly or recurring costs of the buying a new car example. It is very important to separate one-time costs from recurring costs for payback period calculations (the length of time required for the organization to recover its investment). BAs should enlist help from a finance professional when necessary. There is not a standard format for representing costs and benefits. The analyst must design a business case that clearly communicates the facts and expected results of the project.

Table 3.1: Example of One-Time Charges
Purchase price of car	$25,000.00	Written quote from dealer
Taxes, destination charges	$4,200.00	Written quote from dealer
Tags, license	$300.00	From Secretary of State Web site
Loan closing costs	$2,000.00	Written quote from bank
Total purchase cost	$31,500.00

For cost and benefits that cannot be quantified, describe each intangible and how it would benefit or hurt the organization:

• Fun to drive: I will look forward to running errands and going to work and will be in a more positive mood. This will make our whole family feel more upbeat and optimistic.

• Safety: Less chance of a breakdown when away from home that might put the driver and passengers in jeopardy. Better safety features in the car mean that in the unfortunate event of an accident, there may be fewer injuries and less trauma, which may also result in fewer medical costs.

When building a business case, work hard to justify the recommendation that you feel is the best. Often, your intuition and experience point you toward the right conclusion, but management wants hard proof, not a gut feeling.

Table 3.2: Example of Recurring Charges
Item	Old Car	New Car	Notes
Fuel	$200 per month	$175 per month	Based on last year’s mileage, estimated 25 mpg, $4 per gallon of gas
Loan payment	0	$350 per month for 60 months
Maintenance	$150 (average of expenses for last 2 years)	0	Maintenance included in purchase price for 4-year warranty period
Net	$350 per month	$525 per month