solution analysis

Solution Analysis

Business Analysis Extension Certificate XBUA 10014

2013 Mount Royal University Continuing Education & Extension

Acknowledgements

i

Acknowledgements Copyright 2013 by Mount Royal University. All rights reserved.

No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying or any information storage or retrieval systems, without permission in writing from the publisher.

Content Edited Fall 2013

Janet Oakenfold Curriculum Review and Revision 2011

Richard Lannon Original Development 2005

Originally published in 2005 by: Faculty of Continuing Education & Extension. Mount Royal University Calgary, AB. Canada

IIBA, the IIBA logo, BABOK and Business Analysis Body of Knowledge are registered trademarks owned by International Institute of Business Analysis.

CBAP is a registered certification mark owned by International Institute of Business Analysis.

Certified Business Analysis Professional, EEP and the EEP logo are trademarks owned by the International Institute of Business Analysis.

Table of Contents

Mount Royal University, 2013 1 Faculty of Continuing Education & Extension

Table of Contents Acknowledgements i1.0 Course Introduction 4

1.1 Course Description 41.2 Course Objectives 41.3 Business Analysis Certificate Program 51.4 Class Schedule 61.5 Method of Instruction 71.6 Grading 81.7 Workshop Courtesy 81.8 Grouping 91.9 Exercise: Class Introductions 9

2.0 Enterprise and Solution Analysis 112.1 Introduction 112.2 Key Questions to Inform the Work of Solution Analysis 112.3 BA Framework: Solution Analysis 122.4 Where Does Solution Analysis Fit Within the Business Analysis Certificate? 132.5 Solution Analysis and BA Competencies 142.6 Enterprise & Solution Analysis 162.7 Determining a Solution Approach 172.8 Defining Assumptions and Constraints 192.9 Revisiting the Business Case 212.10 Defining Solution Scope 222.11 Exercise: Impact and Feasibility Assessment 23

3.0 Working with Gathered Requirements 263.1 Introduction 263.2 Capability Gap Assessment 263.3 Root Cause Analysis 283.4 Exercise: Using the Five Whys Technique for Root Cause Analysis 293.5 Prioritizing Requirements 303.6 Defining Acceptance and Evaluation Criteria 313.7 Exercise: Prioritizing Requirements 33

4.0 Identifying Improvements 364.1 Introduction 364.2 Fixing a Broken System or Process 364.3 Exercise: Practice Using the Five Max Method 384.4 Improving Systems & Processes 394.5 Exercise: Backwards Imaging 424.6 Systems Thinking: Considerations for Leading Improvements 43

5.0 Solution Implementation 465.1 Introduction 465.2 Allocating Requirements 465.3 Estimation 475.4 Assessing Organizational Readiness 48

Table of Contents


5.5 Stakeholder Impact Analysis 495.6 Force Field Analysis 505.7 Defining Transition Requirements 515.8 Exercise: Force Field Analysis 52

6.0 Measuring Success & Post-Implementation Reporting 556.1 Introduction 556.2 Key Performance Indicators 556.3 Working with KPIs 576.4 Exercise: Identifying Key Performance Indicators (KPIs) 596.5 The Balanced Scorecard 616.6 Exercise: Business Case Supply Chain Scenario 686.7 Reporting Principles 706.8 Dashboards 716.9 Data Mining and Business Intelligence 786.10 Business Intelligence 806.11 Implementing a Data Warehouse 81

7.0 Course Conclusion 837.1 Review of Course Objectives 837.2 Where Do I Go From Here? 847.3 Conclusion 85

8.0 Case Study 878.1 Chinook Savings Case Study 87

9.0 Additional Resources 919.1 Course References 919.2 Web Resources 929.3 Resources 93

Course Introduction Section 1

Course Introduction


1.0 Course Introduction

1.1 Course Description

Business analysts play a key role in ensuring that proposed solutions meet the business needs and deliver maximum benefits to justify implementation.

In this two day, 15-hour course we will examine how to evaluate solution options and solution performance, including techniques for:

identifying capability gaps managing solution scope assessing solutions through performance metrics and reporting

We will review how to use gathered requirements to generate solutions, thereby addressing business problems and leveraging opportunities. We will also look at how to effectively work with gathered requirements, as well as how to identify, implement and report on improvements to business systems.

1.2 Course Objectives

Upon successful completion of the Solution Analysis course, participants will be able to:

Compile and review gathered requirements. Conduct summary level analysis through capability gaps assessment. Define assumptions and constraints. Prioritize requirements. Assess organizational readiness. Define transition requirements. Define solution, and manage solution scope and requirements. Generate solutions to address identified gaps. Apply basic reporting principles. Develop Key Performance Indicators (KPIs), Balanced Scorecards, and report on

business performance results.

ThiscoursehasbeendevelopedinalignmentwiththeInternationalInstituteofBusinessAnalysiss(IIBA)BusinessAnalysisBodyofKnowledge(BABOK)version2.0,2009.

Course Introduction


1.3 Business Analysis Certificate Program

The Business Analysis Certificate Program consists of nine courses and a Final Assessment Paper.

The Solution Analysis course is one of nine required courses you must complete to graduate from the Business Analysis Extension Certificate program at Mount Royal.

The complete Business Analysis Extension Certificate program includes the following courses:

Business Analysis: An Overview (7 Hours) Gathering & Documenting Requirements (21 Hours) Process & Workflow Modelling (15 Hours) Enterprise Risk Management (15 Hours) Solution Analysis (15 Hours) Building a Business Case & Opportunity Evaluation (15 Hours) Solution Validation & Assessment (15 Hours) Project Management: An Overview (15 Hours) BA Review & Preparation for the Final Assessment (7 Hours) Final Assessment Paper (30 Hours Independent Study)

The Final Assessment paper is required to complete the Business Analysis certificate program.

Planning for Business Analysis Activities

Information Gathering About What the Business Needs (Requirements)

Developing, Evaluating and Implementing Solutions

Evaluating Solution Performance

Business Analysis:

An Overview

Gathering & Documenting Requirements

Enterprise Risk

Management

Solution Analysis

Business Case & Opportunity Evaluation

Solution Validation & Assessment

Process & Workflow Modelling

Project Management

BA Review & Preparation for the Final Assessment

Course Introduction


1.4 Class Schedule

The following schedule is to be used as a GUIDELINE ONLY. The topics, activities and exercises may be different, depending on a number of factors.

Schedule Topics and Activities

Day 1

8:30 - 9:30 a.m. Introduction

9:30 - 10:15 a.m. Enterprise Analysis

10:15 - 10:30 a.m. BREAK

10:30 a.m. -12 p.m. Enterprise Analysis (continued) Working with Requirements Gathered

12 - 1 p.m. LUNCH

1 - 2:30 p.m. Working with Requirements Gathered (continued) Identifying Improvements

2:30 - 2:45 p.m. BREAK

2:45 - 5 p.m. Identifying Improvements (continued)

Day 2

8:30 - 9 a.m. Review of Day 1

9 - 10 a.m. Solution Implementation

10 - 10:15 a.m. BREAK

10:15 a.m. - 12 p.m. Solution Implementation (continued)

12 - 1 p.m. LUNCH

1 - 2:30 p.m. Post-Implementation Reporting

2:30 - 2:45 p.m. BREAK

2:45 - 4:30 p.m. Post-Implementation Reporting (continued)

4:30 - 5 p.m. Course Conclusion and Evaluations

Course Introduction


1.5 Method of Instruction

Workshop methodology:

workshop leader presentations individual exercises small group exercises small group presentations group discussion self-assessment

Because this course is primarily in a workshop format, the emphasis will be on learning by doing and presenting, not just listening.

Studies showed that we learn:

10% of what we... Read

20% of what we... Hear

30% of what we... See

50% of what we... See and Hear

70% of what we... Discuss

80% of what we... Experience

90% of what we... Teach

In this workshop, there will be a great deal of discussion, hands-on experience and presentations. Participants will be encouraged to present the results of their group exercise to the class and to discuss their experiences in the exercises. Everyone will be asked to make at least one presentation to the class.

The purpose of each person being asked to present to the class is to provide the participants with the opportunity to further develop their presentation skills.

Definition

Throughout the manual, there may be key terms or definitions that students need to be aware of. To better highlight these instances, the preceding graphic is used. This allows students to quickly locate definitions and key points for further review.

Course Introduction


Learner Check

Many chapters will include a Learner Check to review the key points of that chapter. The Learner Check will be indicated by the preceding graphic.

1.6 Grading

The grade for this course is Attended/Not Attended. Participants must attend 75 per cent of the course to receive a passing grade.

1.7 Workshop Courtesy

Every attempt will be made to begin and end the workshop promptly. Those who must come late or leave early may do so, but are asked to minimize their impact on others in the class. It is also considered a courtesy to inform the instructor beforehand if you need to arrive late or leave early.

Everyones opinion is respected and valued. There are no dumb questions, comments or concerns. Courses such as this one are intended to allow everyone to learn in an open environment.

Active participation is encouraged; please ensure that everyone has equal opportunity to contribute.

During the class presentations and discussions, it is important that one person speaks at a time.

Individual issues that are not of interest to the group in general can be discussed with the facilitator at a break or after the session.

Learning is fun, so remember we are here to enjoy ourselves while we gain knowledge and skills.

This is an inclusive environment, that is, we are mindful to be sure we are including all participants in the discussions and the examples used in the workshop.

Please turn OFF all cell phones and data devices. We ask that you use your breaks and lunch time to return calls, follow up on messages or reply to e-mail.

Course Introduction


1.8 Grouping

Depending on class sizes, the class will be divided into groups of four to five people.

1.9 Exercise: Class Introductions

Introductions

Objective Class introductions.

Step-by-Step Instructions 1. Please introduce yourself to the class by providing:

name current occupation (please include a short description) level of BA experience objectives in taking this course whether you are a morning or a night person

Enterprise and Solution Analysis

Section 2



2.0 Enterprise and Solution Analysis

2.1 Introduction

Todays business analyst plays an essential role in enterprise and solution analysis. In the process of identifying the best solution for a business or organization, the business analyst is responsible for:

determining the most feasible business solution approach defining the solution scope developing the business case for a proposed solution

To proceed with solution analysis, you have now gathered, summarized, and approved requirements and are prepared to lead stakeholders through the identification of feasible solutions. In this module, we will explore the BA role in solution analysis, key concepts related to solution analysis and the goals, benefits and activities associated with the work of solution impact and feasibility assessment.

2.1.1 ObjectivesUpon successful completion of this section, participants will be able to:

Define the work of solution analysis in the context of the BA role. Identify BA competencies, activities and deliverables in solution analysis. Define key concepts, including solution assessment, solution generation, solution

approach, and solution scope.

Recognize methods for determining solution approaches and solution scope. Perform a solution impact and feasibility assessment.

2.2 Key Questions to Inform the Work of Solution Analysis

Some overarching questions to keep top of mind throughout the process of solution analysis include:

Whatdegreeofchangeisneededinordertoachievethedefinedbusinessobjectivesandmeetthebusinessneeds?

Whataretherootcauses(notsymptoms)ofchallengestothecurrentsituationand/orprocessthatneedtobeaddressed?

Whatcouldadifferentsolutionorprocesslooklikeforthesystem?



Asareminder,thetermsysteminbusinessanalysisimplieshowpeople,processesandtechnologyworktogetherasawhole(itisnotreferringtoaninformationtechnologyapplicationnecessarily).

2.3 BA Framework: Solution Analysis

In each course of Mount Royals Business Analysis Certificate Program, the following table is used to help provide a clear picture of what one can expect to experience as a business analyst with respect to the subject of focus in the course.

Solution Analysis

Key BA activities conducted (what can you expect to do/lead as a business analyst in this space?)

Assessing capability gaps Prioritizing requirements gathered Identifying potential solutions and improvements to the business

system Implementing solutions Reporting on system performance post-implementation

Common BA Deliverables

Capability gap analysis Acceptance and evaluation criteria Solution options and evaluation criteria Defined transition requirements Implemented solutions Reports to measure success of business system

How do you know you have been successful?

Solutions identified address gathered requirements in terms of their priority and impact

Solutions address the identified capability gaps Solutions address the business needs, problems and/or

opportunity

Reports and metrics implemented correctly measures the key indicators of system success

Communication Proposed solutions, recommended solution approach and allocated requirements to implementation phases circulated and approved

Proposed reports and measurements systems circulated and approved

Key Stakeholders

Project manager Sponsor Team members System participants



2.4 Where Does Solution Analysis Fit Within the Business Analysis Certificate?

To understand the work of Solution Analysis within the context of the Business Analysis Certificate, key activities are summarized below.

The first stages of Enterprise Analysis (identifying and articulating the business need, problem or opportunity) are discussed in the Business Analysis: An Overview course.

In this course, we will look at the importance of re-visiting the business need and the process of identifying, developing and reporting on solutions that meet identified requirements

The Building a Business Case & Opportunity Evaluation and BA Review & Preparation for the Final Assessment courses will examine the work of developing a business case and conducting analysis to justify investments where required.

Business Analysis: An Overview

Business needs have been defined and clearly articulatedthe reason why a change to organizational systems or capabilities is identified and defined.

Stakeholder analysis has been performed.

Gathering and Documenting Requirements, Process & Workflow Modelling and Risk Analysis

NON-solution based requirements are gathered and documented through elicitation techniques, risk assessment and as-is process mapping and analysis.

Solution Analysis

You are now equipped with requirements and the needs of the organization from the solution.

Your requirements have been summarized and approved. You are in the position to lead your team(s) and stakeholders through the

identification of feasible solutions that will optimize the organizations potential to satisfy the requirements.



2.5 Solution Analysis and BA Competencies

Below is a list of related underlying competencies in the work of solution analysis as defined by the International Institute of Business Analysis (IIBA)1. As you can see, analytical thinking and problem solving are fundamental to your success as a business analyst.

As defined by the Business Analysis Body of Knowledge (BABOK) (2009), business analysts must be competent in a variety of analytical and problem solving areas including creative thinking, decision making, learning, problem solving and systems thinking.

2.5.1 CreativeThinkingCreative thinking involves generating new ideas and concepts, as well as finding new associations between or new applications of existing ideas and conceptsin addition to identifying and proposing alternatives, the business analyst can be effective in promoting creative thinking by asking questions and challenging assumptions.2

Measures of creative thinking include:3

successful generation and productive consideration of new ideas applications of new ideas to resolve existing problems willingness of stakeholders to accept new approaches

2.5.2 DecisionMakingDecision making involves being effective in understanding the criteria involved in making a decision, in making decisions, and in assisting others to make better decisions.4

Decisions are required as it becomes necessary to choose amongst alternatives when options are presented. Decision analysis involves reviewing information, determining what information is relevant to the decision at hand, evaluating benefits and costs and recommending the optimal solution.

Measures of decision making include:5

confidence of the participants in the decision-analysis process that a decision is correct

new information or alternatives that cause a decision to be revisited are genuinely new and not simply overlooked

decisions are effective in addressing the underlying problem

1 BABOK Guide, 2009, pp. 141-42. 2 Ibid. 3 Ibid. 4 Ibid. 5 Ibid.



the impact of uncertainty and new information when making decisions can be effectively assessed

2.5.3 LearningLearning involves gaining knowledge or skills with respect to the business area and how it operates, and translating that knowledge into an understanding of how to benefit the organization. Learning generally begins with gathering raw facts, progresses into an understanding of their meaning to eventually applying knowledge and being able to analyze, synthesize and evaluate.

Measures of learning include:6

agreement by stakeholders that analysis models effectively and completely describe the domain

identification of related problems or issues from multiple areas in the domain rapid absorption of new information or new domains

2.5.4 ProblemSolvingProblem solving involves being able to define a problem so as to ensure that the nature of the problem is clearly understood and that underlying assumptions are identified and tested. The objectives that need to be met once the problem is resolved need to be understood and alternatives should be measured against their ability to fulfill the objectives.

Measures of problem solving include:7

confidence of the participants in the problem-solving process that a selected solution is correct

new solution options can be evaluated effectively using the problem solving framework

selected solutions meet the defined objectives and solve the underlying problem The problem solving process avoids making decisions based on preconceived notions, organizational politics, or other traps that may cause a sub-optimal solution to be selected.

2.5.5 SystemsThinkingSystems thinking involves being effective at understanding how the people, processes, and technology within an organization interact through relationships and patterns to create a system as a whole.8 Therefore, systems thinking refers to, the ability to understand that the components alone do not allow for an appreciation of the properties, behaviours and characteristics that result from the interaction of system components with one another.

6 BABOK Guide, 2009, pp. 142 7 Ibid. 8 Ibid. pp. 143.



Measures of the effective use of systems thinking include:9

understanding of how a change to a component affects the system as a whole identification of reinforcing and compensating feedback loops understanding of how systems adapt to external pressures and changes

2.6 Enterprise & Solution Analysis

Enterprise Analysis

EnterpriseAnalysisisacoreKnowledgeAreadefinedwithintheBABOK.Businessanalysisactivitiesthatassistorganizationsinthecapacityofenterpriseanalysisinclude:

identifyingandarticulatingthebusinessneed,problemoropportunity identifyinganddevelopingsolutionsthatmeetthebusinessneeds justifyinginvestmentsrequiredtodelivertherecommendedsolutions

Enterprise Analysis, of course, does not present itself solely in the solution phase of a project; rather it begins at the start of a business analysis initiative and continues throughout. It is through analyzing the enterprise or context of the initiative that requirements are often elicited.

2.6.1 WhereDoesSolutionAnalysisFitWithinEnterpriseAnalysis?

Solution Analysis

SolutionAnalysis,whichisadimensionofEnterpriseAnalysis,iscomprisedofbusinessactivitiesthattakeplacefororganizationsto:

analyzethebusinesssituationinordertofullyunderstandbusinessproblemsandopportunities

assessthecapabilitiesoftheenterpriseinordertounderstandthechangeneededtomeetthebusinessneedsandachievestrategicgoals

determinethemostfeasiblebusinesssolutionapproach definethesolutionscopeanddevelopthebusinesscaseforaproposed

solution defineanddocumentbusinessrequirements(includingthebusiness

needs,requiredcapabilities,solutionscope,andbusinesscase)10

9 Ibid. 10 BABOK Guide, 2009, pp. 143



2.7 Determining a Solution Approach

2.7.1 WhatisaSolution?

Solution

Inbusinessanalysis,asolutioncanbedefinedasasetofchangestothecurrentstateofanorganizationthataremadeinordertoenablethatorganizationtomeetabusinessneed,solveaproblem,ortakeadvantageofanopportunity.11

A solution is not one thing but rather a set of enhancements that can range from minor process changes to the large scale implementation of new tools and applications. Most solutions are comprised of many interacting components, each of which may be considered smaller independent solutions.

2.7.1.1 Examples of Solutions

Some examples of solutions or solution components include:

new or revised business processes new or revised business rules information technology applications and systems changes to organizational structures and decision making outsourcing/in-sourcing

2.7.2 WhatisaSolutionApproach?

Solution Approach

Asolutionapproachessentiallydescribestheapproachthatwillbeundertakentoobtainthecapabilitiesrequiredasdefinedinrequirementsgathering.Solutionapproachlookstodefinehowthesolutionwillbedefined.

2.7.2.1 Types of Solution Approaches

Possible solution approaches include:12

use additional capabilities of existing software/hardware that are already available within an organization

purchase/lease hardware or software design and develop customer software

11 BABOK Guide, 2009, pp. 4. 12 Ibid. pp. 88.



add resources to the business or make organizational changes change the business procedures/processes partner with other organizations, or outsource work to suppliers

To determine the optimal solution approach, business analysis efforts need to:

generate possible solution alternatives (options) define assumptions and constraints rank the identified solutions

Key activities and principles for defining a solution approach include:

generating solutions defining assumptions and constraints ranking and selecting solution approaches defining solution scope

2.7.3 GeneratingSolutionsAs a general rule, you should try to generate as many solutions as possible, and one option that should always be evaluated involves doing nothing.

Alternative Generation

Alternativegenerationistheprocessofidentifyingasmanyoptionsaspossibleintermsofwaystomeetthebusinessobjectives,closeanycapabilitiesgaps,andmeetthedefinedrequirements.

2.7.3.1 The Benefits of Generating As Many Solutions as Possible

The objective of generating solutions is to come up with as many options as possible, and not limit the analysis to the most obvious or easiest solution alternatives. Once a sufficient number of alternatives are generated, there is usually:

at least one approach that is acceptable to key stakeholders a few approaches that are distinctly different from one another no need to initiate any future efforts to identify more alternatives, which would not

likely generate any better results



2.8 Defining Assumptions and Constraints

Assumptions

Anassumptionbydefinitionisanythingthatisconsideredtobetruebuthasnotinfactbeenverified.

Making assumptions is an important and a necessary course of business; however, discussing and documenting assumptions is essential.

Assumptions are too often overlooked or completely taken for granted as part of business analysis. Assumptions are the very foundation of any conclusions or recommendations made. Without some level of assumption, most analysis activities would stop in their tracks. As business analysts, we need to identify and document our assumptions to progress in our work and move forward.

2.8.1 WhyisCapturingAssumptionssoImportant?There are four main reasons why capturing assumptions is important to the work of business analysis.

1. Stating and documenting assumptions enables others to understand why decisions were made and what the logic was behind these decisions.

2. Analysis activities can get complex. Even as the business analyst you may lose track as to what underlying assumptions went into the work conducted.

3. If something happens that challenges the logic behind assumptions, it is much easier to go back and change assumptions if they were clearly articulated to begin with.

4. Assumptions are often a key area of risk in a project or initiative.

Constraints

Constraintsarelimitations,requirementsorotherfactorsthatcanimpactadecisionorsolution.Constraintsareoftenwhatmakesolutionsreal.Thereareveryfewprojectsorinitiativesthatdonothaveconstraintsthatshouldbeconsideredwhenidentifyingpotentialsolutionstoabusinessproblem.

2.8.1.1 Examples of Constraints

There is no end to the types of constraints that may be in play at any given time, however, some examples include:

budget or money limitations pre-defined technology applications that must be leveraged/used the interdependence of the process in question with other processes or areas of the

business



when solutions must be implemented contractual constraints

While assumptions and constraints must be discussed and documented, part of the role of the business analyst will be to challenge stated assumptions to ensure that they are indeed valid.

2.8.2 RankingandSelectingSolutionApproachesSometimes a solution or a set of solutions will appear as either obvious or superior to others; most of the time, however, all solution approaches should nonetheless be assessed and ranked relative to one another.

Two useful techniques for evaluating and ranking solutions are:

Feasibility Analysis Impact Analysis

2.8.3 FeasibilityAnalysis

Feasibility Analysis

Afeasibilitystudyisapreliminaryanalysisoftheoptionstodeterminetheanticipatedbusinessbenefitandaddedvalue.Feasibilityanalysiscanberelativelystraightforwardorextremelycomplexdependingontheparticularsolutionsetathand.Solutionsmaybeassessedintermsoftheiroperational,financial,technical,timing,organizational,cultural,marketableandlegalfeasibility.

The Building a Business Case & Opportunity Evaluation course will focus on the primary aspects of assessing financial feasibility for solutions.

2.8.4 ImpactAnalysis

Impact Analysis

Impactreferstotheabilityofthesolutionorsetofsolutionstoaddresstherequirementsandbusinessneeds.Someimprovementswillbeassessedashavingaminorimpacttowardsimprovingthesystemscapability,whileotherswillbeidentifiedashavingamajorimpact.



2.8.5 ImprovementMatrixThe following matrix can be used to help map solutions and improvements against one another (ideally there is an extensive list of the many improvements that could be made to the business system ranging from minor to major).

2.9 Revisiting the Business Case

The business case is a tool that is used to assess whether or not the required investment to implement a solution or set of solutions is justified.

2.9.1 SolutionAnalysisandBuildingtheBusinessCaseThe work of developing a business case is reviewed in other courses of the Business Analysis Certificate. However, it is important to consider the major components of a business case in the context of solution analysis, including:

anticipated benefits estimated costs assessed risks measuring and tracking results



2.10 Defining Solution Scope

2.10.1 WhatisSolutionScope?

Solution Scope

Solutionscopereferstodefiningwhichnewcapabilitieswillbedeliveredfromthebusinessanalysisprojectorinitiative.Essentiallythisinvolvesdivingdeepenoughintothedetailsofthesolutionstoenablestakeholderstoidentifywhichnewcapabilitiesareexpectedtobeinplace.

Solution scope consists of:

identifying which features or functions are going to be included in the solution determining how the solution will interact with people and systems defining what is in and out of the solution scope

2.10.2 ScopeModelling

Scope Modelling

Scopemodellingisatoolcommonlyusedtodescribethescopeofasolutionbydefiningitsboundariesthroughcontextdiagrams,eventsthatthesolutionwillrespondtoandfeaturesdescribedintermsoffulfillingthestakeholdersneeds.

Implementation

Implementationisadescriptionofhowthesolutionwilldeliveritsdefinedscope.Thismayincludethedefinitionofimplementationphasesoverdefinedtimeframesandessentiallyprovidesaroadmapforhowthesolutionwillbeputintoplace.



2.11 Exercise: Impact and Feasibility Assessment

Impact and Feasibility Assessment

Objective: Identify and assess solution components according to their impact and feasibility to meet desired goals.

Scenario Identify potential solution components for the Chinook Savings Wellness Program. Complete details for the Chinook Savings Case Study are located in Section 8.0 of this course manual.

Step-by-Step Instructions 1. In groups of four to five people, brainstorm potential solution

components (options) to be included in the wellness program for Chinook Savings. Identify a minimum of 15 solution components (options).

2. Using a scale of 1 to 5 (1 being low, 5 being high), rate each solution component based on your assessment of:

a. Impact b. Feasibility

3. Using the Improvement Matrix, recommend which components you believe should be:

a. Done now b. Done soon c. Planned to be done d. Forgotten



Learner Check

1. What is Enterprise Analysis?

2. What is a Solution?

3. What are three possible solution approaches?

4. Why is it important to identify all assumptions and constraints?

5. Solutions (improvements) identified are generally assessed according to their impact and __________________.

Working with Gathered Requirements

Section 3



3.0 Working with Gathered Requirements

3.1 Introduction

Once you reach the point of conducting solution analysis as part of a business analysis initiative, extensive effort has already been directed towards gathering and documenting requirements. At this stage, it is important to review all gathered requirements holistically in order to determine if there are any remaining areas that need to be addressed and if the root cause of the system problem has indeed been identified.

In this module we will review two major tools that are useful for ensuring that an identified solution is addressing the needs and objectives of the business:

1. Capability Gap Assessment 2. Root Cause Analysis


Perform a basic capability gap analysis. Lead the process of identifying the root cause of business or systems issues. Explore and potentially identify alternatives for prioritizing improvements. Define acceptance and evaluation criteria.

3.2 Capability Gap Assessment

Capability Gap Assessment

Acapabilitygapassessmentessentiallyexaminesthegapbetweenthecapabilitiesthatasystemorprocesscurrentlyhas,withthecapabilitiesthatarerequiredtoreachthedesiredgoalsandobjectives.

3.2.1 TheBenefitsofCapabilityGapAssessmentThe biggest benefit of a capability gap assessment is that it forces you to compare identified requirements with the capabilities of the existing structure, people, processes and technology. Any areas NOT met by the current system are then identified as requirements for the solution to address.



3.2.2 WhatareCapabilities?Capabilities being referred to may include:

business process products/services that the organization creates or delivers organizational structures employee competencies, skills and knowledge facilities working tools tasks that an end user can perform events that a system needs to respond to locations data and information information technology applications and systems features

While the capability gap assessment can seem very simple in concept it can be very powerful. Rather than taking the existing system and tweaking it, a gap assessment requires identification of requirements, a mapping of the current system capabilities to those requirements and then, and only then, looks at additional requirements for future solutions. It is often surprising for teams to identify capabilities that are already present, just not leveraged to their full extent.

3.2.3 TheStepsforCompletingaCapabilityGapAssessmentThe steps to complete a capability gap assessment are as follows:

1. Clarify the business goals/needs/requirements.

2. Gather as much information as possible about the current performance of a system, process, service or product.

3. Understand how the business goals/needs/requirements are currently being supported by existing processes and systems.

4. Assess where current capabilities are insufficient to meet business needs.

5. If current capabilities are insufficient, lead the development of a description of the desired future state in terms of requirements.

6. Identify and summarize required new capabilities.

7. Create a plan for improvement.

As with the majority of BA tools and techniques, the level of detail required in the capability gap assessment will differ depending on the context and project at hand. A final note of caution: just because a gap is small does not mean it is not important!



3.3 Root Cause Analysis

3.3.1 UsingRequirementstoAddresstheRootCauseSometimes, despite great intentions, it is not always easy to uncover the true cause of a problem.

As a business analyst, it is your responsibility to ensure that you have probed deep enough to ensure the identified requirements of a business system or process actually solve the cause of a problem, and do not simply serve as a band-aid approach to address the symptoms.

3.3.2 TheFiveWhysApproachOne method to uncover the true cause of a problem is using the Five Whys approach.

The Five Whys Approach

TheFiveWhysapproachgotitsnamefromthefactthatitusuallytakesaskingwhyfivetimeswhenhearingtheresponsetoaquestionbeforegettingtothetruecauseofaproblem.

While the use of cause and effect diagrams and root cause analysis will be specifically addressed in the Solution Validation & Assessment course, the Five Whys technique can be very helpful in the final stages of determining why a particular requirement is needed. Often times the obvious gaps or problems in a system can distract us and we may end up identifying effects, and not the cause of a problem to be solved.



3.4 Exercise: Using the Five Whys Technique for Root Cause Analysis

We will debrief as a large group with the following questions:

1. Did you find that the information you received by the time you had asked the question five times, more informative than what you received from the first question?

2. How do you see this tool helping you to uncover additional information or guidance on one of your specific projects and/or analysis activities?

3. Did you find it frustrating to keep being asked Why?

Five Whys

Objective Use the Five Whys technique for root cause analysis.

Step-by-Step Instructions 1. Form groups of two and identify yourselves as either Member 1 or

Member 2.

2. Member 1 ASKS the following question of Member 2: Why is the world economy currently in a recession?

3. Member 2 responds to the question and Member 1 follows up with Why?

4. Continue to repeat this process until Member 1 has asked Why five times.

5. Member 2 ASKS the following question of Member 1: Why are more people carrying Blackberrys these days?

6. Member 1 responds to the question and Member 2 follows up with Why?

7. Repeat this process until Member 2 has asked Why five times.



3.5 Prioritizing Requirements

As much as many stakeholders and or team members may not like to hear it, not all requirements are created equal and organizations usually do not have unlimited time or money to implement any and all wants.

This is where your role as a business analyst is very importantyou are there to help identify what is needed and which requirements need to be met first, second, third, etc., as you are the one with the overall picture in front of you.

3.5.1 KeyConsiderationsforPrioritizingRequirementsIn terms of prioritizing requirements, some elements to consider include the:

order in which requirements must be investigated and/or implemented if dependencies exist (i.e., you cannot paint a door if there is no door yet)

potential business value (reduced cost, improved revenue, etc.) likelihood of success risk associated with not implementing (e.g., compliance, regulatory requirements) difficulty/complexity/stability of the requirement

When prioritizing requirements the important takeaway is that it is the relative importance between requirements that you are demonstrating. Therefore, despite potential pushback from reviewers or team members, there will be requirements that are on the bottom of the list. It is important to clarify that this does not mean that less important requirements are not needed; it just means that others are needed first.

3.5.2 TechniquesforPrioritizingRequirementsTwo useful techniques that can help business analysts lead teams through requirements prioritization are:

MoSCoW Analysis the Timeboxing/Budgeting method



3.5.3 MoSCoWAnalysisMoSCoW Analysis focuses on dividing requirements into four groups:

1. Must: Describes a requirement that must be satisfied in the final solution for it to be considered a success.

2. Should: High priority item that should be included in the final solution if it is possible. Often an important requirement that could be satisfied in another way if necessary.

3. Could: Requirement that is desirable but not necessary, to be included if time and resources permit.

4. Wont: Requirement that stakeholders have agreed will not be implemented in a given release, but may be considered for the future. 13

MoSCoW Analysis can be particularly useful in forcing you (and potentially your team) to draw a line in the sand with respect to whether a requirement is a want or a need.

3.5.4 Timeboxing/BudgetingTimeboxing/budgeting works to prioritize requirements based on allocating a fixed resource to them. Usually this fixed resource is either time or money.

There are three approaches that can be utilized:

All in: Assign estimated time or cost (as a best guess) and remove requirements one by one in order to meet the timelines or budgets assigned.

All out: Add requirements in one by one in order of priority, stopping when the time or budget limit is met.

Selective: Identify and add high priority requirements and then add and remove other requirements one by one until the budget or timeline is met.14

3.6 Defining Acceptance and Evaluation Criteria

You are ready to take the next step of solution analysis, once you are confident that you have:

all the requirements that are needed to satisfy the business needs reviewed the current system capabilities to confirm that the capability does not

already exist

identified the real requirement versus a symptom of a deeper problem prioritized requirements

13 BABOK Guide, 2009, pp. 105. 14 Ibid.



The next step is to identify which requirements can be used as acceptance or evaluation criteria.

Acceptance Criteria

Acceptancecriteriarefersto,theminimumsetofrequirementsthatmustbemet,forthesolutiontobeconsideredworthimplementing.Acceptancerequirementsaregenerallyusedtoassessoneparticularsolutionintermsofapass/failapproach.

Evaluation Criteria

Evaluationcriteriarefersto,thesetofrequirementsthatwillbeusedtoselectfromsolutionoptions.Evaluationcriteriaencouragethescoringofmultipleoptionstoassistinmakingdecisionswithrespecttowhichoptiontopursue.

Acceptance and evaluation criteria are needed to express the requirements in a testable form. In other words, the team can test the proposed solution against the criteria.

Scoring

Scoringinvolvesidentifyingascalethateachsolutioncanbeevaluatedagainstwithrespecttoitsabilitytomeetaparticularrequirement.Stakeholdersmustbealignedwithrespecttothedefinitionoftherequirementaswellasthescoringsystemthatwillbeputintoplace.



3.7 Exercise: Prioritizing Requirements

Prioritizing Requirements

Objective Practice prioritizing improvements.

Scenario Assume that you are going to pack for a tropical one week vacation.

Step-by-Step Instructions 1. Individually:

a. Prepare a list of 25 items that you need to bring.

b. Review which ones you currently have at home.

c. Identify which ones you need to acquire (do not presently have)

d. Identify which ones are:

i. Musts

ii. Should

iii. Could

iv. Wont

2. Assume you have $100 to spend.

a. Determine which ones will be purchased.

3. Assume you have your bags packed and there is too much stuff.

a. One by one identify which ones would come out of the bag.

4. Form groups of four to five people. Discuss your responses.



Learner Check

1. What are the five steps to creating a capability assessment?

2. Why is it important that the root cause of business problems is understood?

3. What are the four categories in a MoSCoW Analysis?

4. What is meant by the acceptance and evaluation criteria?

Identifying Improvements Section 4

Identifying Improvements


4.0 Identifying Improvements

4.1 Introduction

Leading or supporting initiatives towards system or process improvement is another important aspect of the BA role. In this section, we will examine:

ways to identify common types of system improvements key considerations to be made when leading improvement efforts three general categories of improvement, including:

o fixing a broken system or process o making improvements to mitigate risk o improving performance through enhancements or change


Identify appropriate methods for system, process and performance improvement. Generate ideas or options to improve performance using The Five Max Method. Recognize the benefits of minimizing risk by error-proofing and preventing mistakes

in a system or process.

Use techniques, such as benchmarking and backwards imaging, to improve performance.

Recognize the importance of becoming a systems thinker. 4.2 Fixing a Broken System or Process

Below are some signs that improvements may be required to address a current process or system performance:

there are multiple versions of the same process (there is no standardization) there are redundant steps in the business process (rework or non-value added) activities and roles within a process are split amongst multiple individuals the time it takes for the process or system to complete tasks is too long recipients of process outputs are not happy mistakes being made (system accuracy, precision etc.)

These are only a handful of the signs that a process or system needs to be improved. With your requirements in hand, the above signs provide helpful information with respect to identifying options and how those requirements can be met.



4.2.1 OptionstoImprovePerformanceSome examples of options to improve system or process performance include:

running activities in parallel or combining them changing the scope of individual or departmental responsibilities or activities automation to make things move faster eliminating non value added activities

4.2.2 TheFiveMaxMethodOne technique that can be useful in generating ideas for improvement is the Five Max Method. Returning to your as-is process maps, the Five Max method focuses on describing a process in a maximum of five major steps and then have teams brainstorm new (or improved) ways to accomplish that activity. This is a focused brainstorming tool that really encourages participants to discuss each processs major activity one at a time.



4.3 Exercise: Practice Using the Five Max Method

Five Max Method

Objective Practice using the Five Max Method.

Scenario: Assume that you are grocery shopping. Goals are saving money, decreasing time spent shopping, and improving your selection of choices at home.

Step-by-Step Instructions 1. In groups of four to five people:

a. Identify five high level steps in the grocery shopping process. Five MAXIMUM.

b. Brainstorm in your groups a minimum of five ways each step could be improved.

c. Prepare to review the results with the larger class.



4.4 Improving Systems & Processes

Risk management is more and more important in todays organizations and most projects or initiatives will have requirements that stem from the need to reduce the level of risk inherent in any business system. Businesses want to ensure that if the market changes, the business contracts or grows, or assumptions change, that the system will be able to handle it by presenting the agility required.

4.4.1 PokaYokeAnother side of risk is the common requirement to want to prevent mistakes before they occur. One principle is that of Poka Yoke, stemming from Lean Management principles.

Poka Yoke

PokaYokeessentiallyinvolveserrorproofingaprocessorsystemtopreventthepotentialforerrors.PokaYokethinkingcanassistteamsindevelopingsolutionstomeetrequirementsforreducingtheriskofprocessfailure.

4.4.1.1 Examples of Poka Yoke

Examples of Poka Yoke include:

pre-defined drop down menus in applications (versus allowing free typing) a three prong plug on your wall in your home that prevents accidentally plugging in

something in an incorrect way

the way your car automatically turns off its headlights when they are left on

These are all examples of ways to prevent problems BEFORE they occur. All too often in organizations we dedicate too much time to putting the fires out in our systems as they occur, and not enough time preventing them.



4.4.2 TechniquesforImprovingProcessPerformanceGenerally speaking, most teams skip the opportunity to fix problems or error-proof a process or system. Instead, most will simply jump right into improving performance by obtaining new and improved process features and capabilities.

For this reason, developing new and improved capabilities is likely to be the place where ideas are generated first. Unfortunately, enhancements and features are often identified prior to understanding whether or not they are truly needed to solve the business problems at hand.

There is of course a very important role that improvements to system features and capabilities play; business analysts, however, need to ensure that the pursuit of additional capabilities is based upon identified and prioritized requirements that are not already present in the current system.

4.4.3 Benchmarking

Benchmarking

Benchmarkingistheprocessofcomparingonesbusinessprocessesandperformancemetricstoindustrybestsand/orbestpracticesfromotherindustries.

As a BA you and your team can learn a great deal by talking with other members of industry and by researching other industries and companies to:

find out what is currently considered the best of the best identify ways in which the process or system at your organization can be improved

upon

One of the challenges with benchmarking is that people often approach it with the this wont work here or we are different patterns of thought. Try instead to open your mind and look for things that are similar.

Even though business models will never be exactly the same, companies and industries often face similar challenges and can leverage similar types of practices and opportunities.



4.4.4 BackwardsImaging

Backwards Imaging

Inbackwardsimaging,thefacilitator(oftentheBA)asksteammemberstoindividuallydevelopapictureofthedesiredfuturestateintermsofwhatsuccesslooksandfeelslike.

An example of backwards imaging is to ask your team to imagine that they have finished implementing improvements and solutions and now describe what is working well. If the team is struggling to put themselves into the future without more structured guidance, ask them to list what the future state would have more of and less of. Once everyone has completed their individual exercise, the group can come together and discuss the various similarities and differences.

Backwards imaging can help bring process improvement conversations to a more detailed, business needs discussion versus general, feature based statements. This approach can also assist in enabling teams to speak in positive terms versus focusing too long on what is not working.



4.5 Exercise: Backwards Imaging

Backwards Imaging

Objective Apply the Backwards Imaging technique to identify improvements. Note: While this technique is typically used in a group or team situation, for the purpose of this assignment, you will do the initial brainstorming on your own.

Scenario Refer back to the Chinook Savings Wellness Program case study.

Instructions 1. Perform backwards imaging for the Chinook Savings Wellness program.

Picture the ideal or desired future state of success for the program. Identify 20 characteristics of this future state. Be sure to describe each characteristic in behavioral termswhat the wellness program will mean for its participants or key stakeholders. For example, flexible is not a behavioural characteristic. However, stating that participants can personally select their own programs and level of participation is a behavioral description.

2. Consider the following:

a. What did you observe or experience in the process of completing this exercise? How did the process or your experience of the change from start to finish?

b. Can you identify three benefits of using this technique with a team of people? For example, imagine using this technique to:

i. Create a new system, process, product or service.

ii. Review, assess, test or evaluate a new or existing system, process, product or service.

iii. Improve or redesign an existing system, process, product or service.

c. What sorts of questions does this process force you to ask? Identify three questions that you had or used to identify the ideal future state for Chinook Savings Wellness Program.

d. How does this exercise help to illustrate the relationship between process improvement and being a systems thinker in the context of the BA role?

3. Be prepared to share your results and group discussion with the class.



4.6 Systems Thinking: Considerations for Leading Improvements

4.6.1 BecomeaSystemsThinkerBusiness analysts need to become systems thinkers. This involves being able to think beyond a specific requirement or solution and instead appreciate their role in a larger contextthe system of process, people and technology all working towards similar objectives.

When individuals are not systems thinkers they tend to focus on their position versus their role as part of a system. BAs can help teammates and stakeholders to see the big picture so to speak. Being a systems thinker involves both reflection and inquiry.

4.6.2 TheBARole:LeadingImprovementsthroughReflectionandInquiryReflection implies slowing down enough to ensure that you fully understand the issues at hand prior to solving them. It involves identifying patterns or areas of improvement that may not be necessarily obvious.

In addition, systems thinking, also involves being inquisitive or asking questions. This approach can be demonstrated through techniques such as the Five Whys or even through simply paraphrasing to ensure understanding of what is said and heard.

The BA must assess what type of improvement approach may be warranted. This may include starting with a blank piece of paper and re-designing the system in its entirety. More often than not, it involves appreciating that, even small improvements, when targeted to the right areas in a system or process, can present huge opportunities and benefits.



Learner Check

1. What are the three general categories of improvement?

2. What is meant by the Poka Yoke technique?

3. What does it mean to be a systems thinker?

Solution Implementation Section 5

Solution Implementation


5.0 Solution Implementation

5.1 Introduction

Once you have completed the work of identifying and prioritizing solutions to address a business need or problem, and then defined key components for each solution, it is time implement the solution. In this module we will look at techniques and key considerations when implementing solutions, including:

allocating requirements estimating the costs and value of solution components assessing organizational readiness defining transition requirements


Define the process of allocating requirements. Identify examples of solution components. Reference key considerations when estimating the costs and value of solution

components, and identify useful estimation techniques.

Identify considerations for assessing organizational readiness. Identify activities associated with defining transition requirements. Apply Force Field Analysis to the implementation of a solution.

5.2 Allocating Requirements

Once solutions have been identified, and the components of those solutions have been articulated, it is then time to allocate gathered requirements to those solution components.

Allocatingrequirementsisperformedtoensurethatthemaximumnumberofrequirementsarerealized,aswellastoensurethatthesolutionselectedhasnotdisregardedanykeyrequirementsidentified.

5.2.1 SolutionComponentsSolution components refer to the fact that the majority of business solutions will be comprised of multiple parts, and each part has a set of requirements that can be attributed to it.



5.2.2 ExamplesofSolutionComponentsExamples of solutions components include:15

Business policies and business rules; Business processes to be performed and managed; People who operate and maintain the solution, including their job functions and

responsibilities;

Software applications and application components used in the solution; Structure of the organization, including interaction between the organization, its

customers and its suppliers.

5.2.3 EstimatingtheCostsandValueofSolutionComponentsFor each solution component, the costs and expected value are estimated in order to ensure that the allocation of requirements delivers the optimal level of value to the organization, and makes the most sense.

5.2.3.1 Key Considerations in Evaluating Solution Costs & Benefits

Considerations in evaluating the cost and benefit of solutions components may include:16

available resources constraints (e.g., regulatory requirements, priority) dependencies between requirements

5.2.4 WhenRequirementsAllocationBeginsRequirements allocation begins once a solution approach has been identified and then continues until all valid requirements are allocated (generally, through implementation of all solution components). Typically, solution implementation is planned according to several releases or phases of work.

Requirements are often mapped according to which phase of implementation will address them; therefore, the resulting output has all valid requirements allocated to the solution component that will implement them.

5.3 Estimation

While estimation for an entire business analysis project was discussed in the Business Analysis: An Overview course, the following is a review of some common estimation techniques that are often utilized in predicting the time and costs associated with solution assessment and implementation:

15 BABOK Guide, 2009, pp.125. 16 Ibid. pp.126.



Analogous using a similar project, ROM or rough order of magnitude Parametric use of parameters multiplied by number of hours Bottom up based on deliverables, tasks, activities Rolling wave refinement of estimates as progress is made Three-point estimation optimistic, pessimistic, most likely Historic similar to analogous but detailed tasks as well Expert judgment those that have performed the work in the past Delphi combination of expert judgment and history

5.4 Assessing Organizational Readiness

Organizational Readiness

Organizationalreadinessreferstoassessingwhethertheorganizationisreadytomakeuseofthenewsolutionbydescribingtheeffectthesolutionwillhaveandifthebusinessisequippedtohandletheorganizationalchangesthatoftenhavetotakeplacewiththeimplementationofsolutions.

5.4.1 TheBARoleinAssessingOrganizationalReadinessThe role of the business analyst in assessing organizational readiness involves identifying the impact that the solution will have and what changes will likely occur with its implementation. This process involves performing

a cultural assessment, an operational or technical assessment, a stakeholder impact analysis, a force field analysis (potentially).

5.4.2 CulturalAssessment

Cultural Assessment

Aculturalassessmentreferstoexaminingwhether(andwhich)stakeholdergroupsareinvestedinmakingtheproposedchangesandsolutionimplementationsuccessful;businessanalystsshouldbelookingforthebeliefs,attitudesandgeneralfeelingstowardstheeffort.



Important components of cultural assessment include determining whether stakeholders:

understand the reasons behind implementing a new solution view the solution as beneficial or a positive change

5.4.3 OperationalorTechnicalAssessmentsOperational or technical assessments refers to evaluating whether the organization is equipped and ready to take advantage of the capabilities that will be provided. This process helps to identify areas where training will be needed, what policies and procedures will be required and whether the required information technology systems are in place.

5.5 Stakeholder Impact Analysis

Stakeholder analysis has hopefully been conducted throughout the business analysis initiative, however it is especially critical at this stage of an initiative to understand how the proposed solution and changes will impact each of the stakeholder groups that have been identified.

5.5.1 KeyConsiderationsWhenAssessingStakeholderImpactSome things to consider when assessing stakeholder impact include:17

functions used by the stakeholder location of stakeholders and their method of communication tasks commonly performed by the stakeholder group skill level required of the stakeholder group stakeholder concerns (usability requirements, preferences, workload, demands, job

security, work satisfaction, etc.)

17 BABOK Guide, 2009, pp. 129.



5.6 Force Field Analysis

A force field analysis is a very useful tool for visually depicting the support and opposition to a change.

5.6.1 StepstoPerformaForceFieldAnalysisTo perform a force field analysis you can:

1. Identify forces supporting a change/solution

2. Identify forces opposing a change/solution

3. Assign a score in terms of the strength of the force (e.g., on a scale of 1 to 10)

4. Develop strategies to support the desired outcome

Figure 1 Force Field Diagram18

18 BABOK Guide, 2009, pp. 130.

Strength of Force

Strength of Force

Forces Supporting Change

Forces Opposing Change

5

2

3

1

Supporting Force 1

Supporting Force 2

Opposing Force 1

Opposing Force 2

Total: 7 Total: 4

Proposed Change to Business System



5.7 Defining Transition Requirements

Transition Requirements

Transitionrequirementscanbedefinedasthoserequirementsthataretemporaryinnatureandassistinthetransitionfromtheexistingtonewstate.

As was reviewed in the gathering and documenting course, true transition requirements cannot be elicited until the solution and its components have been defined.

5.7.1 WhatsInvolvedinDefiningTransitionRequirements?During the transition period (commonly defined as when both the new and the old system are operational), some common transition requirements include:

training stakeholders transferring information and data from the old system to the new

The process of defining transition requirements often involves:

determining whether two systems or processes will need to exist in parallel during a defined changeover period

defining how information and/or data will be transferred from the old system to the new including rules for how this interpretation will take place

identifying training requirements for end users and other stakeholders defining communication requirements explaining the changes that are going to take

place

Transition requirements are unique from other requirements in that they are temporary in nature. Once the solution or improvements are in place the transition requirements would be removed or would change into maintenance requirements.



5.8 Exercise: Force Field Analysis

Force Field Analysis

Objective Practice constructing a Force Field Analysis.

Scenario Refer to the Chinook Savings Wellness Program Case Study.

Step-by-Step Instructions 1. In groups of four to five people prepare a force field analysis for the

implementation of a Wellness Program at Chinook Savings

a. Identify the forces supporting the change.

b. Identify the forces opposing the change.

c. Assign a score to each force (1 to 5).

d. Identify one strategy for each of the forces against the change.

NOTE: make assumptions where required.

2. Prepare to present the analysis to the larger class.



Learner Check

1. What are three examples of solution components?

2. What is meant by rolling wave estimates?

3. What are some considerations when assessing the impact of a solution in terms of organizational readiness?

4. What are three examples of transition requirements?

Measuring Success & Post-Implementation Reporting

Section 6

Measuring Success & Post Implementation Reporting


6.0 Measuring Success & Post-Implementation Reporting

6.1 Introduction

Once a solution is implemented, the business analyst will help ensure that the solution delivers desired results to achieve the organizations goals. To begin, you need to develop performance metrics or Key Performance Indicators (KPIs) to determine the success or failure of BA activities and then report the results of your findings.

In this module, we will examine The Balanced Scorecard tool as a management framework for capturing strategic goals and identifying financial and non-financial measures to evaluate business performance. We will also look at performance dashboards as a reporting tool, and the goals and outputs of data mining and business intelligence.


Describe the role of key performance indicators in measuring success. Identify Key Performance Indicators to measure the success of an implemented

solution.

Use Kaplan and Nortons Balanced Scorecard technique for evaluating and reporting business performance.

Use reporting principles and dashboard design as tools for presenting performance measures and results.

Define the goals and activities associated with data mining and business intelligence. 6.2 Key Performance Indicators

It is through business analysis practices that decision-support information is gathered, analyzed and prepared. Once a solution is implemented, a business analysts role is to ensure that business problems are indeed resolved (and stay resolved), as well as ensure that processes and solutions are performing optimally to allow the organization to meet its objectives.

6.2.1 DevelopingMetricsSystem activities need to be aligned with the larger corporate strategy. Typically this is accomplished through the measurement of the performance of key business processes and systems. These measures of success often become referred to as Key Performance Indicators or KPIs.



Key Performance Indicators (KPIs)

KPIshelpidentifythegapsbetweenwhereanorganizationorfunctionalareais,andwhereitneedstobe.Theyalsoassistindirectingwherefutureresourcesandprojectsshouldbefocused.

6.2.2 Whatisagoodmetric?That said, not all metrics are created equal. A good metric or KPI is:

clear relevant agreed upon quantifiable

No matter who is interpreting a metric, the metric should make it easy to define what exactly is being measured and how. If you have a metric that can be calculated in multiple different ways but called the same, then the business process that needs to be measured has not been properly understood.

6.2.3 RelevancyRelevancy implies that the KPI does indeed measure what needs to be captured in order to drive towards the desired behaviors and results.

A KPI must be agreed upon by all management levels of the organization and must remain consistent across functional silos. For example, Revenue is always Revenue (and is calculated the same way) no matter how cost controlling, sales and distribution, or financial accounting uses the term or metric.

For a KPI to be quantifiable, it does not simply have to be numerical. Its performance must also be repeatedly and routinely captured in a systemic fashion.



6.3 Working with KPIs

6.3.1 DefiningtheBaseline,TargetandTimeframeOften the first step when working with a new KPI is to baseline the starting performance point of the business process or system. When defining and working with KPIs as a business analyst you need to ensure that you include:

the baseline the target the timeframe

The objective is to ensure that there is little left for interpretation with respect to whether or not the target was successfully achieved. For example, rather than saying we want to increase revenue next quarter, a better definition is we need to increase revenue by 5 per cent to $5.0M by April 30.

6.3.2 CommonExamplesofKPIsKPIs can look and feel very different depending on their respective area of focus. Some examples of common key performance indicators include:

inventory levels cost of goods sold turnover rate revenue contribution margin or profit customer satisfaction sales volume



6.3.3 UsingOperationalorTransactionalDataTo measure their performance, KPIs must be supported by transactional, detailed data. Operational or transactional data is typically captured, then analyzed before becoming a KPI.

The reality is KPIs will never be developed in a perfect environment. You will always wish you had access to more or higher quality data. Rest assured however that it is amazing what can be accomplished with the data you already have at your fingertips.

6.3.4 StrategiesforDefiningKPIs

If you do run into difficulty when defining KPIs, start with the following:

Expand your thinking with respect to how the metric is built. Examine the potential for multiple metrics thus when reviewed together, present a similar result to the ideal metric you had hoped for.

Some metrics will not be able to be captured directly. Creative thinking can help you think of new, less typical, ways of measuring the same thing.

Start capturing new data.

KPI

Analytics

OperationalData



6.4 Exercise: Identifying Key Performance Indicators (KPIs)

Key Performance Indicators

Objective Determine Key Performance Indicators

Scenario Read the Scenario on the next page.

Step-by-Step Instructions 1. Form groups of four or five people

2. As a group, brainstorm potential Key Performance Indicators (KPIs) that would help measure success for Company ABC.

3. Select five KPIs that you would recommend that Company ABC start to measure. Define each KPI in terms of a baseline, target and timeframe. Remember to stop and ask yourselves: Will this set of metrics help us to ensure that we are meeting our business objectives?

4. Select a representative to present your five KPIs to the class.

5. As a large group we will discuss the challenges you would face if you were developing metrics to be measured in your organization.



Scenario Company ABC currently offers a credit card product to its customers. With the recent recession they are presently faced with a number of challenges to keep this area of their business profitable.

Company ABC has always marketed itself to financially sound individuals and has traditionally been able to attract quality clientele. This has primarily been achieved through offering a reduced interest rate, as the risk to Company ABC of granting credit is traditionally lower than that of the competition due to their strong client base. As a result, they have rarely had to market their product, as their target customer group has usually approached them. Right now however, monthly payments are becoming increasingly smaller and delinquencies (late payments) are more common.

Revenue earned from interest charged has actually increased for Company ABC in the past few months but management is aware that shortly this will likely be off-set by an increase in the number of credit card balances that will be written off.

The customers current payment behaviour is compounded by a sudden increase in the number of new credit applications that are being refused. In the past, Company ABC was able to approve approximately 80 per cent of all applications; in past months this had reduced to almost 70 per cent.

With late payments, additional letters and statements must be sent to cardholders. This has increased Company ABCs process costs. In addition, the customer service department is overwhelmed with handling calls from customers and the credit department is equally busy trying to contact customers to discuss their payment history and outstanding balances.

Therefore, Company ABC needs some help in developing metrics to help them keep a close eye on the key aspects of success for their business. They want to ensure that they are able to have visibility into these key indicators so that they can quickly make the strategic decisions required to be successful in the short and long term.



6.5 The Balanced Scorecard

Frequently KPIs are grouped together to produce scorecards. These scorecards often take into account not only the financial goals of the organization, but the non-financial decision criteria required to properly invest in the future success of the enterprise.

The Balanced Scorecard

TheBalancedScorecard(createdbyRobertKaplanandDavidNortonin1996)isamanagementtoolthatprovidesausefulframeworkfordefiningstrategicgoals.Inabalancedscorecard,strategicgoalsareapproachedfromfourdifferentperspectives:financial,customerrelationship,internalbusinessprocess,andlearningandgrowth.Eachofthesebusinessperspectivescontributetotherealizationofthecorporatevisionandstrategy.

Kaplan and Norton described that During the industrial age, from 1850 to about 1975, companies succeeded by how well they could capture the benefits from economies of scale and scope. Technology mattered, but ultimately success accrued to companies that could embed the new technology into physical assets that offered more efficient mass production of standard products.

[] The emergence of the information era, however, in the last decades of the twentieth century, made obsolete many of the fundamental assumptions of industrial age competition. No longer could companies gain a sustainable competitive advantage by merely deploying new technology into physical assets rapidly, and by excellent management of financial assets and liabilities. 19

6.5.1 AnalyzingDataacrossBusinessUnitsA decisive factor in the survival of any organization today is the proper analysis of data across business units (also known as functional silos). The complexity of this task is that we are required to provide a cross-functional view of the business, and at the same time support the day to day operation of each individual business unit while remaining aligned to the corporate vision and strategy defined by the executive team.

6.5.2 IncorporatingNonFinancialMeasuresinyourEvaluationOne reason to incorporate non-financial measures in the evaluation of the performance of a business is that financial metrics are an after-the-fact measurement of business performance. Intangible assets such as business process improvement, the development of employee skills and competencies, employee retention rates, etc., also play a key role in the execution of the corporate vision and will not necessarily be reflected in financial results alone.

19 Kaplan & Norton. 1996.



From this perspective, relying only on financial metrics to evaluate the performance of a company gives only a partial view to the investor, the stakeholders, and most importantly to the executive and management teams in charge of the business unit.

6.5.3 TheFourDimensionsoftheBalancedScorecardKaplan and Norton recognized the importance of non-financial measures and, based on their experience, identified four major common perspectives that need to be measured in a balanced scorecard:

1. The Financial Dimension

2. The Customer Dimension

3. The Internal Business Process Dimension

4. The Learning and Growth Dimension.

Figure 2 depicts the Balanced Scorecard approach.

Figure 2 The Balanced Scorecard20

20 Ibid.



6.5.4 TheFinancialDimensionKaplan and Norton retained, as a key component of the Balanced Scorecard, the financial dimension because financial performance metrics do indeed indicate the direct contribution to the bottom-line of any corporation.

Financial Metrics

Financialmetricsinthebalancedscorecardapproach;however,areassumedtobedifferentforeachofthethreestagesofthelifecycleofabusinesswhichare:

TheGrowthStage TheSustainStage TheHarvestStage

Itshouldbenotedthatcompaniescanexistinallthree(differentdivisions/products)ormovebackandforthdependingonmarketevolution.

6.5.4.1 The Growth Stage

When an organization is in a stage of growth, it is in its early stages of its life cycle. These organizations are characterized by heavy investments in the development (or enhancement) of new products or services. Businesses in the growth stage usually operate with negative cash flows and with low returns on capital invested. They are focused on the development of infrastructure and customer relationships, as well as the implementation of systems and production facilities.

Some financial metrics outlined by Kaplan and Norton for growth-stage businesses are:

percentage growth rate in revenue sales growth rate in target market sales growth rate in customer groups sales growth rate by region

6.5.4.2 The Sustain Stage

Businesses in the sustain stage are usually expected to earn good returns on invested capital. These organizations are focused (or expected to focus) on maintaining their existing market share and on growing it at a sustainable rate year after year. The attention is placed in relieving bottlenecks, expanding capacity and in the immediate improvement of business processes through investment projects. These businesses still attract investment and reinvestment. The financial metrics associated with this stage are:

Return on Investment (ROI)



Return on Capital Employed (ROCE) Economic Value Added measures

6.5.4.3 The Harvest Stage

When a business reaches a stage of maturity its focus shifts from significant investment to the harvest of all the investments made in the previous two stages of its lifecycle. The financial objectives for these mature organizations are focused on operating cash flow and a significant reduction in working capital requirements. This is why the financial metrics for harvest-stage organizations are heavily emphasized by traditional financial measurements such as:

Return on Capital Employed (ROCE) Operating Income Gross Margin

6.5.5 TheCustomerDimensionA business most important asset is its customers. The BSC aligns the financial metrics discussed in the financial perspective with the companys customer management strategy.

6.5.5.1 The Customer Perspective

The relationship with the customer can be measured by:

customer satisfaction, retention and loyalty levels number of new customers acquired customer profitability analysis

The customer perspective in a BSC is not limited to financial metrics only. It also takes into account that if a company fails to understand the needs and desires of its customers by providing products and services that add value to them, it will eventually lose market share to its competitors and, ultimately, may not be able to survive at all.

6.5.5.2 Customer Metrics

Some proposed metrics for the customer perspective are:

Percentage of Market Share Customer Retention Level Customer Satisfaction Rate Customer Profitability Customer Acquisition Rate (Market Penetration Rate)



It is important to remember that a customer can be an individual or an entity. The customer perspective used in the BSC considers both external and internal entities to be customers that must be serviced with the same level of care.

One of the most important payoffs of customer relationship analysis is that once we understand the portfolio of the customer, we can increase sales through segmenting our customer base and cross-selling. But we can only do that if we systematically discover our customer facing process.21

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