modern analyst webinar- from requirements analyst to ... · • mapping requirements to benefits...

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From Requirements Analyst to Benefits Analyst

Presenter:Mark A. MonteleonePMP, CBAP,CSM/CSPO

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Abstract

From Requirements Analyst to Benefits AnalystThis 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

changesAfter 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.

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Presenter BiographyMark 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

* Indiana Jones Quote – “Raiders of the Lost Ark”** Pronounce the “b” in CBAP, not the “P” in CPAP*** Never forget the “R” in scrum

• 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 (CSMTM)• Scrum Product Owner (CSPOTM)

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Mindmap of Webinar Agenda

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Aspects of Business Analysis

Strategic Analysis

BenefitsManagement

EnterpriseAnalysis

RequirementsManagement

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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

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

Relationships

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Aspects of Business Analysis

Strategic Analysis – focus is mission and vision – why does 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

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From Requirements Analyst to Business AnalystParts 4, 5, and 6 of Agenda

Relationships

Relationships Relationships

Relationships

Relationships

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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

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Reaching Out to include Benefits Management

BenefitsManagement

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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

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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

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Project Name XYZ Initiative $MYear 1 2 3 4 5Annual 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)

SavingsBad 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

Income Stream

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Cost‐Benefit Analysis

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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

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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)

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Cost‐Benefit Analysis Summary

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Financial Analysis 6 – comparative analysis

Compare two initiatives at a time based on business case measurements

Initiative A

Imitative B

InitiativeC

InitiativeD

Initiative A

Initiative A

InitiativeA

Initiative D

InitiativeB

InitiativeB

Initiative D

Initiative C

InitiativeD

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

Frequency2

Frequency1

Frequency0

Frequency3

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Requirements Traceability – a baseball analogy

Business Needs

Stakeholder

Solution

Transition

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

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Benefits Mapping – a baseball analogy

BusinessValues

Stakeholder

Solution

Transition

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

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The Wave of Change

Strategic PlanValue PropositionDependenciesCompliances

AssumptionsConstraintsDependenciesResistance

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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

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From Requirements Analyst to Business AnalystSMART Information Sources

Relationships

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From Requirements Analyst to Business AnalystPart 7 of Agenda

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

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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

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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 satisfactionfrom 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.”

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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 policyto always be in compliance with existing laws.”

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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

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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?

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From Requirements Analyst to Benefits Analyst

For a webinar recording and a copyof the presentation, see Webinars @

http://www.modernanalyst.com

To contact the presenter or obtain copy of the presentation, see Contact US or Services @

http://baquickref.com

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References

1. http://www.modernanalyst.com/Resources/Articles/tabid/115/ID/3869/The‐Elevator‐Speech‐for‐the‐BA.aspx

2. https://en.wikipedia.org/wiki/Requirements realisation managment

3. https://www.pmi.org/4. https://www.iiba.org/5. https://en.wikipedia.org/wiki/Cost%E2%80%93bene

fit_analysis6. https://en.wikipedia.org/wiki/Financial_analysis7. https://en.wikipedia.org/wiki/SMART

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