How to Define Business Needs through Business Analysis

Whether public, private, or nonprofit, a business serves a market, executes a mission, and — presuming all goes well — fulfills the vision that the leaders have set for that business.

Throughout the course of operations, business leaders set goals and objectives for their enterprise, and they rally teams to work hard and deliver on them. These goals and objectives are business needs; they are the things the business must have or achieve to run, to be profitable, to serve effectively, and to deliver successfully on its mission.

Business needs defined at the highest level may include capability needs (statements about providing certain services, delivering a suite of products, assisting others in need, or ensuring the business’s own operational effectiveness) or improvement needs (suggestions meant to increase efficiencies or decrease costs, effort, or time-to-market).

Articulating and defining business needs is a part of the activity called enterprise analysis and includes identifying and understanding the business’s goals; articulating its strategic direction; and capturing any key concerns pertaining to the business’s successes, challenges, risks, or problems.

Successfully identifying business needs requires critical thinking, analysis, and insight. The business leaders of a company may not clearly tell you what they need, but they’ll probably suggest solutions they want, complain about capabilities they don’t have that’d be helpful, and talk a lot about opportunities they could go after if they only had the hottest new technologies. Therefore, you must do a lot of interpreting.

Digging into the source of leaders’ wishful thinking can give you information about their business objectives and targets. When you work toward identifying why they need those things, you identify the core activities or drivers of the business. A popular business analysis acronym is IRACIS, or “increase revenue, avoid costs, improve service.” Typically, the business needs are related to one of these targets.

To serve needs effectively, business analysts must articulate

  • What objectives or goals are being served or attempted in specific business area(s)

  • What results or outcomes are desired

  • What issues or problems are getting in the way

  • What solutions are being suggested or considered for implementation or adoption in order to get the business needs met

Outcomes desired versus problems perceived to be getting in the way of business success should be paired together in the analysis when identifying business needs. But that does not mean a problem and opportunity will always be expressed together. The business may express a problem without an associated opportunity or, conversely, an opportunity without an associated problem.

ID Problem Opportunity
1 Manually tracking student registrations for classes takes too long. Automate the registration process.
2 Manually tracking instructor availability and other business rules is too cumbersome. Automate instructor availability and additional business rules.
3 Our competitors do all their scheduling manually, and we want to be first to market.

You typically express business needs as broad statements characterizing strategic (and sometimes lofty) goals or as specific statements describing tactical objectives, such as what will be done by when. Consequently, effectively meeting business needs may require broad solutions, like a collection of organizations or operational stakeholders that participate in a variety of initiatives, subsequently designed to meet the objectives.

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