From Requirements Analyst to Benefits Analyst

Transcription

1 From Requirements Analyst to Benefits Analyst Sponsored by: Presenter: Mark A. Monteleone PMP, CBAP,CSM/CSPO

2 Who is ASPE? We provide innovative, custom solutions to transform your enterprise and increase success within your organization. The A.C.T. Model Assess Coach Train Learn more at aspetraining.com/aboutus

3 Abstract From Requirements Analyst to Benefits Analyst This webinar is a follow up to an article published in Modern Analyst entitled, The Elevator Speech.for the BA. We kickoff the webinar with a business analyst meeting an executive on an elevator and being asked, So what are you working on these days? Unfortunately, the business analyst responds in the article by citing solution requirements, disregarding the real interest of the executive being business benefits. With the above intro, the webinar focuses on understanding all the components of business analysis and provides insight on why business analysts need to expand their skills beyond the elicitation of requirements to include benefits management skills: developing a business case description and economics with income streams linking income streams to cost benefit indicators such as payback period, return on investment, net present value, benefit cost ratio, internal rate of return and modified internal rate of return evaluating, comparing, and ranking project financials using business case descriptions and economics mapping requirements to benefits (similar to requirements traceability) and change management that includes the monitoring of benefits along with business case and requirement changes After reviewing these skills, the webinar returns to the elevator scenario, but this time with the business analyst citing business benefits using the SMART format. The webinar then concludes with several walk away questions for business analysts to consider for their careers. 3

4 Presenter Biography Mark A. Monteleone, PMP, CBAP, CSM/CSPO Independent consultant Experienced in PM/BA over 45 years, but it s not the years, it s the mileage* Consulted in more than 35 countries Author of The 20 Minute Business Analyst and PM/BA articles in several on-line publications such as BA Times BA Connection Modern Analyst International Association of Facilitators (IAF) Global Flipchart Graduate of Texas A&M University B.S. in physics M.S. in computing science Certified as a Project Management Professional (PMP ) Certified Business Analysis Professional (CBAP )** Certified Scrum*** Master (CSM TM ) Scrum Product Owner (CSPO TM ) * Indiana Jones Quote Raiders of the Lost Ark ** Pronounce the b in CBAP, not the P in CPAP *** Never forget the R in scrum 4

5 Mindmap of Webinar Agenda 5

6 Mindmap of Webinar Agenda 6

7 Mindmap of Webinar Agenda 7

8 Mindmap of Webinar Agenda 8

9 From Requirements Analyst to Business Analyst Part 1 of Agenda 9

10 The Elevator Speech 1 A fortuitous meeting with someone of business importance Having the person s brief attention (30 seconds) Taking the opportunity to influence the person via a profound statement or a quick summary about something important 10

11 Business Analyst Example A BA walks into an elevator Joined by an executive Suddenly the executive asks the BA So, what are you working on these days? 11

12 Requirement Management Focus 2 (BA Response Private/Public Sector Project) I m working on a project that is providing new and enhanced features to our customers/constituents. Today, customers/constituents can only obtain information on their accounts by calling our service center. We are working on a website that will provide direct customer/constituent access to our order database. With this access, customers/constituents will be able to directly inquire on the status of their accounts including adding and changing their product orders without calling the service center. Executive response: Great, keep up the good work. 12

13 Lessons from the Elevator Speech 1. Know your audience; what is appropriate in terms of: Style/Format Tone Time/Frequency, Language 2. Executives are more interested in business benefits than solution requirements Questions: My focus is only on solution requirements. But what about business benefits? Is benefits management part of being a business analyst? Do I as a business analyst, know the business benefits of my project work? How do I associate requirements with benefits? What benefits management skills do I need? 13

14 Most Business Analysts Project success focus requirements management A Respond by describing the features of a solution Seldom mention the associated business benefits A. Based on feedback obtained from teaching many business analysis courses over 15 years. Most BAs elicit requirements, but are not involved in the development of the business case. 14

15 More Business Focus Business success focused _ benefits management Conduct benefits mapping similar to requirements traceability Cite the impact on the business case if and when requirements change 15

16 Mindmap of Webinar Agenda 16

17 Aspects of Business Analysis Benefits Management Strategic Analysis Enterprise Analysis Requirements Management 17

18 First a note on BA Certifications Project Management Institute (PMI) 3 Professional Business Analyst (PMI PBA ) Covers only Requirements management International Institute of Business Analysis (IIBA) 4 Certified Business Analyst Professional (CBAP ) More comprehensive Requirements management Benefits management Strategic Analysis Enterprise Analysis 18

19 From Requirements Analyst to Business Analyst Part 2 and 3 of Agenda Relationships 19

20 Aspects of Business Analysis Strategic Analysis focus is mission and vision whydoes the business exist Goals general direction Objectives specific results Enterprise Analysis focus is business architecture how is the business going to accomplish the strategy Organization components functional departments Component interactions workflows 20

21 From Requirements Analyst to Business Analyst Parts 4, 5, and 6 of Agenda Relationships Relationships Relationships Relationships Relationships 21

22 Aspects of Business Analysis continued Benefits Management focus is the business case justifying changes to the business architecture Cost benefits analysis initiative economics Financial analysis initiative comparisons Requirement Management focus is solution requirements needed changes to the business architecture Project context scope, budget, schedule Analysis Tools capabilities, conditions, transitions 22

23 Reaching Out to include Benefits Management Benefits Management 23

24 Benefits Management Business Case description and economics Cost Benefits Analysis internal initiative economics Financial Analysis comparative analysis Benefit Mapping requirements to benefits and its relationship with Change Management business case changes requirement changes typically results in needing to update benefits 24

25 Initiative Business Case Description issues/opportunities Strategic Plan Update Value Proposition Program Dependency Compliance Risk Assumptions Constraints Dependencies Resistance Impact Employee Customer Process Technology Economics Income stream Initial capital Operating Expense Reduction Expenses Savings Income Cost Benefit Analysis Payback Period Return on Investment Net Present Value Benefit Cost Ratio Internal Rate of Return / Modified Rate of Return Financial Analysis Comparative Analysis 25

26 Income Stream Project Name XYZ Initiative $M Year Annual Opex $ 5,000 $ 4,995 $ 4,989 $ 4,977 $ 4,965 Annual Maintenance $ $ 1 $ 1 $ 2 $ 2 Initial Capital $ (1,000) Opex Reduction $ $ 5 $ 12 $ 23 $ 36 Expense $ (1) $ (1) $ (3) $ (3) $ (3) Savings Bad Credit Loss $ 50 $ 50 $ 100 $ 100 $ 100 Workforce $ 6 $ 6 $ 13 $ 13 $ 13 Income $ 250 $ 250 $ 500 $ 500 $ 500 Net $ (1,000) $ 305 $ 311 $ 621 $ 633 $ 645 Cumulative Net $ (695) $ (384) $ 237 $ 869 $ 1,514 26

27 Cost Benefit Analysis 27

28 Cost Benefit Analysis 5 Payback Period (PP) how long will the initiative takes to recover the initial capital investment (inflow = outflow) Return on Investment (ROI) what is the total undiscounted gain (limited to one year initiatives due to no discounting of future money) Net Present Value (NPV) what is the total discounted gain (multiple years with discounting of future money) EXCEL function NPV calculates only Present Value (PV) Initial Capital Investment needs to be subtracted from the EXCEL function result 28

29 Cost Benefit Analysis Benefit Cost Ratio (BCR) business benefits divided by initiative initial cost For every unit of currency, how much currency is returned Multiple year initiative with discounting of future money Internal Rate of Return (IRR) what is the initiative breakeven discount rate that results in a net present value (NPV) of zero Multiple year initiative with discounting of future money Used to compare with a hurdle rate determined by executives IRR overstates reinvestment that is corrected by Modified Internal Rate of Return (MIRR) 29

30 Cost Benefit Analysis Summary 30

31 Financial Analysis 6 comparative analysis Compare two initiatives at a time based on business case measurements Initiative A Initiative B Initiative C Initiative A Frequency 2 Imitative B Frequency 1 Initiative A Initiative C Frequency 0 Initiative A Initiative B Initiative D Frequency 3 Initiative D Initiative D Initiative D Evaluating, Comparing, and Ranking Initiative Portfolio Management evaluates and compares all proposed projects two at a time based on information from their business cases Portfolio Management then ranks the initiatives by the desirability frequency of each initiative Note the process is competitive; only top ranked initiatives are funded Initiative D 31

32 Requirements Traceability a baseball analogy Transition Solution Business Needs Stakeholder Requirements traceability is a project mitigation tool for preventing scope creep by controlling change To stay within project time and money constraints, BAs must be able to link business needs to stakeholder requirements stakeholder requirements to solution requirements solution requirements to transition requirements Project success is achieved when realizing the project scope within the schedule and budget 32

33 Benefits Mapping a baseball analogy Transition Solution Business Values Stakeholder Benefits mapping is a business tool for ensuring requirements link to their potential business value increases in revenue, customer satisfaction, flexibility, compliance decreases in cost, liability, risk Business success is achieved when realizing benefits in the form of business goals and objectives 33

34 The Wave of Change Assumptions Constraints Dependencies Resistance Strategic Plan Value Proposition Dependencies Compliances 34

35 Change Management impact to business benefits Project Business Case strategic direction may no longer be valid lower ranked projects may now be more desirable Solution Requirement Changes specific benefits no longer valid cost benefit analysis no longer favorable Corrective Action Recommendations project changes cancelation 35

36 Mindmap of Webinar Agenda 36

37 From Requirements Analyst to Business Analyst SMART Information Sources Relationships 37

38 From Requirements Analyst to Business Analyst Part 7 of Agenda 38

39 Wrap up back to the elevator, but with a business focus 39

40 But first a note on the SMART 7 Format and it s Source Links to Benefits Management Specific what/where: issues, opportunities, compliance, global, regional, state wide, local Info Source: business case description Measured how much (unit): currency ($), survey rating (1 10) Info Source: business case economics cost benefit analysis indicators Achievable who: proven technology, saving/revenue confirmed by stakeholders as realistic Info Source: business case description Relevant why: contributes to the strategic plan, executive policy, government compliance, industry standard, consent decree, audit Info Source: business case description Time bound when: this year, over 2 years, 3 years, 5 years Info Source: economics Income stream 40

41 Benefit Management Focus (BA Response Private/Public Sector Discretionary Projects) I m working on a global opportunity that is adding $20M in revenue to the business in the next 3 years. This work is aligned with our strategic plan and confirmed by the stakeholders. I m working on a local issue that is saving the business $10M over the next 5 years. This work is aligned with our strategic plan and confirmed by the stakeholders. I m working on a state wide issue that is expected to increase constituent satisfaction from a survey rating of 4 to 9 by the end of year. The team is enhancing the usability of our public products and services to be aligned with the stated direction issued by our elected/appointed officials. 41

42 Benefit Management Focus BA Response (BA Response Private/Public Sector Nondiscretionary Project) I m working on a regional compliance issue that is ensuring that the business is avoiding $5M in U.S. government fines, possible litigation and even incarceration by being aligned with new federal/state laws effective next year. This work is aligned with our executive policy to always be in compliance with existing laws. 42

43 Better Result of the Elevator Speech So, what are you working on these days? The BA responds by citing the business benefits of the work, not the solution requirements Gains the executive s interest May now invite the BA for an extended conversation in the executive s office 43

44 Walk Away with These Questions What are my current responsibilities as a business analyst? Does my career path as a business analyst include benefits management? Do I aspire to include benefits management in my job as a business analyst? How do I acquire the skills? 44

45 From Requirements Analyst to Benefits Analyst For a webinar recording and a copy of the presentation, see To contact the presenter or obtain copy of the presentation, see Contact US or 45

46 References 1. /tabid/115/id/3869/the Elevator Speech for the BA.aspx 2. realisation managment fit_analysis

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