Business Analysis

D P Goyal

Business Analysis-An IntroductionWhy Business Analysis?

Can’t we do without Business Analysis?

What is Business Analysis?What is Business?

What is Analysis?

Business Analysis – Why?

• To identify business needs and determine solutions to business problems.

(Solutions often include a system development component, but may also consist of process improvement, or organizational change (strategies, goals, policies)

• Majority of the IS projects fail because of the communication gap between the business managers and the technical experts.

Contingencies and their Contribution to Uncertainty

ContingencyType

Degree ContributiontoUncertainty

Project Size SmallLarge

- +

Degree ofStructuredness

SmallLarge

+ -

User Task Comprehension IncompleteComplete

+ -

Developer’s Task Proficiency HighLow

- +

Business Analyst – Who?

The business analyst, acting as an intermediary between the business and technical communities, analyzes competing business needs and develops plans to implement the projects that support stakeholder objectives.

A Business Analyst is a

• Strategist• Architect• Systems Analyst

……thus the course on Business Analysis …….

……….intends to sensitize the Managers to the skills they will soon need to practice for developing effective and efficient systems…………..

Course Objectives:

To get broad understanding of :• Techniques and methods for gathering Information

requirements from users and other stakeholders;• Approaches to Analyzing and prioritizing competing

business needs; • Creating dynamic business models and writing detailed

specifications that provide a blueprint for the proposed system;

• Quantifying business case benefits and costs ; and • Communicating the requirements package to

stakeholders.

Business Analysis - What?

Business analysis is the discovering, modeling and specification of the logical requirements of a business.

MANAGEMENT of Business

• To get the work done through and with the help of people

• By performing basic functions of management

……basic functions of management

• PLANNING

• ORGANISING

• STAFFING

• DIRECTING

• CONTROLLING

Essence of Management

Whatever a manager does, he/she does it through DECISION-MAKING

“DECISION-MAKING IS AN ESSENCE OF MANAGEMENT”

-Peter Drucker

Management Hierarchy

Levels of Management

• Strategic Planning Level

• Management Control Level

• Operational Control Level

Management Level Functions

Top Level Middle Level Low Level

Interaction Between Levels Of Management

Policies Budgets Plans Objectives

Revenues Costs Profits

Schedule Measurements

Goods Services Performance

INPUT IN DECISION MAKING

For Decision Making

INFORMATION is the necessary and vital input

Data• A stream of raw facts about anything

• Examples:.– Record of all the players in one day cricket

matches.– Detailed Marks of all students in a class.– Business data as obtained from various

business houses.

Information

• processed data, which is useful to the recipient.

• Examples:– Profit of the company in the current year– The highest ever score in one day cricket– First ten toppers in a class – The top 50 business houses of India.

Then Information is……

WHICH

• Tells something the receiver did not know

• Reduces uncertainty

• Has a surprise value

• Has a real / perceived value in current / prospective decision.

Data and Information

Information Needs of Different Level Managers

Strategic Planning Level

Operational Control Level

•Structured•Programmed•Historical•Exact•Internal

•Unstructured•Non-programmed•Futuristic•Inexact•External

SYSTEM ?

“The word ‘System’ is the most loosely held word in Management Literature”

WE TALK ABOUTDIGESTIVE SYSTEM

CIRCULATORY SYSTEM

ECONOMIC SYSTEM

SOLAR SYSTEM

EDUCATION SYSTEM

COMPUTER SYSTEM …………………and so on

……THEN WHAT IS A System?

Input OutputProcess

A set of inter-related elements working towards a common objective(s).

System and Environment

Environment

Boundary

Systems

System and Environment

• A system is a set of interrelated elements that collectively work together to achieve some common goal or objective.

• All systems function within some kind of environment.

Types of Systems

• Closed Systems

• Open Systems / Cybernetic Systems

Cybernetic System

Input OutputProcess

Involves a feed back control Loop

Feed Back /Control Loop

Systems Approach to management

WHOLISTIC APPROACH

CONTRARY TO

PIECEMEAL APPROACH

The Whole is greater than the sum of its parts

2+2=5

....Systems Approach

• Every system is held together by way of Information Exchange.

Classical

Systems

SOCIOLOGYSOCIOLOGY

POLITICAL POLITICAL SCIENCESCIENCE

PSYCHOLOGYPSYCHOLOGY

COMPUTER COMPUTER

SCIENCESCIENCEOPERATIONS OPERATIONS

RESEARCHRESEARCH

MANAGEMENTMANAGEMENT

SCIENCESCIENCE

TECHNICAL APPROACHESTECHNICAL APPROACHES

MISMIS

BEHAVIORAL APPROACHESBEHAVIORAL APPROACHES

The Interdependence Between Organizations and Information Systems

• Flattening organizations

• Separating work from location

• Reorganizing work-flows

• Increasing flexibility

• Redefining organizational boundaries

New Options for Organizational Design

Flattening Organizations Information Systems

Categories Of ISs

• TPS• MIS• DSS• ESS• CRM• SCM• ERP• ………………..

Types of Information Systems

Transaction Processing Systems

Decision Support Systems

Management Information Systems

Executive Support Systems

Expert

System

s

Decisi

on Sup

port

System

s

Office

Auto

mation

System

s Level-I

Level- II

Level- III

Transaction Processing System

• Book Keeping

• Issuance

•Data Gathering

•Data Editing

•Data Manipulation

•Data Storage

•Information Documents

•Error Reports

•Control Reports

Payroll TPS

Types of TPS Systems

Management Information Systems

PROVIDES INFORMATION

On continuous basis and reports like

• Scheduled Reports

• Exception Reports

• Demand Reports

Management Information System (MIS)

Decision Support Systems

• PROVIDES SUPPORT IN THE DECISION MAKING OF MANAGERS

Decision Support System (DSS)

Decision Support System (DSS)

Executive Information Systems

Business Content

• Strategic planning support

• External environment focus

• Broad based computing facility

Presentation Features

• Drill down Reporting• Exceptional reporting• Graphic Summary• Office automation

capabilities• Ease of learning and use• Customization

Executive Support System (ESS):

Strategic level• Inputs: Aggregate data

• Processing: Interactive

• Outputs: Projections

• Users: Senior managers

Example: 5-year operating plan

Executive Support System (ESS)

Office Automation Systems

• Office Work

• Data Manipulation

• Document Handling

• Communication

• Storage

Functional Areas of Management

• Marketing

• Finance

• Production and Operations

• Human Resource Development

Marketing Information System

Inputs

• Transaction Data• Marketing Research

Data• Marketing Intelligence

Data• Strategic Plans

Outputs

• Product Plan• Place Plan• Price Plan• Promotion Plan• Budget & Sales

Forecast

Financial Information System

Inputs

• Transactional Data• Forecasting Data• Financial Intelligence

Data• Strategic Plans

Outputs

• Forecast• Funds Management• Audit and Controls

Production and Operations System

Inputs

• Production data• Inventory Data• Vendor Data• Marketing data• Labor/Union/Engg.

Data• Environment Data

Outputs

• Product Design• Job Scheduling • Production• QC/QA

Human Resource Information Systems

Inputs

• Transaction Data• Functional Plans• External data

Outputs

• Organizational Resource Planning

• Organizational Management

• Payroll and Administration

Group Exercise - 1

• Consider any organization

• Identify various activities involved in the organization– Identify the ways in which activities are

grouped in the organization– Identify the information exchanged across

various levels.– Discuss possible benefits the organization

might/has accrue(d) by deploying IS/IT.