The Business Analyst Value Equation

The Need for Business Analysis

In today‘s economic situation, many organizations are attempting to find new and better ways of saving money. One option is, of course, to downsize. If your organization starts down that slippery path, the question then becomes which positions should be eliminated? Since the business analyst role is ill-defined and/or misunderstood in many organizations, it could become a prime candidate for consideration.

Given that the true role of business analysis is to help organizations work more efficiently, we would like to point out that the elimination of that role is akin to cutting off your nose to spite your face (whatever that means). Actually, this might be a real good time to revisit an earlier edition of the Noiseletter to give you a well-researched basis for defending the need for business analysis — and by extrapolation, business analysts — in your organization.

What Is the Value of a Well-Educated, Capable Business Analyst?

For starters, what does it mean to be well-educated and capable? Great question! If there are no more questions, class is dismissed. No, wait! We do have an answer. Consider this: Requirements definition consists broadly of three activities.

Capture	Elicit, gather, discover, trawl for, find, "whatever" the requirements
Clarify	Write requirements to gain mutual understanding and agreement between the analysts and the subject matter experts
Confirm	Manage, prioritize, identify risk levels, and verify the testability of requirements

All analysts will make errors in one or more of these areas. Based on research by Barry Boehm (see references in the attached spreadsheet) capable analysts make 30-50% less requirements errors. What makes them capable? A large number of techniques and tricks of the trade in their repertoire. Where do they get these tricks and techniques? Primarily from experience and/or training (ergo, well-educated). Studies show that training can increase the capabilities of an analyst by one to two levels on a scale of 1 to 5). This assumes they are allowed to apply the presented techniques within a reasonable time frame.

Cost of Correction Curve

So how much is it worth to make fewer errors? Research has shown that the cost to find and fix a requirements error in production (maintenance developer’s job) costs 100 — 200 times what it costs to find and fix the same error in requirements definition (business analyst’s job). Other research has shown that the average cost to fix a requirements error in production is about $14,000. Wow!

This means that the value of a capable analyst depends on how many mistakes they don’t make! This is definitely a weird way to think about things, but the numbers speak for themselves.

It might sound too good to be true, so open our "How Much Can Training Save Me" worksheet and play with it. We think you will find it very informative and interesting!

Author: Tom Hathaway
Managing Partner
Requirements Solutions Group, LLC

Editor’s Note

In this missive we tackled the value equation and make a number of statements about our research. The four-page worksheet will walk you through the steps of our thinking and document each of our sources. You will have to enter at least two values to get the numbers calculated for your situation. The values are the number of people in your organization who perform the BA/SA role and either your total IT or total IT maintenance budget for the year.

Those of you who have followed the RSG Noiseletter from the beginning may have gotten a sense of déjà vu reading this article. It is an updated reprint from one of the early editions, but we thought that it was very germane to the current economic situation and hope that it helps.

Dan Myers and Tom Hathaway,
Managing Partners

Managing Partner
Requirements Solutions Group, LLC.