Why Business Analysts Should Value Business Models

As a business analyst, have you ever come across a project where you had to collect requirements and help design a solution for a business group, but every time you talked to someone, you seemed to get different, often conflicting, explanations of how the business works?

Business PuzzleMost experienced Business Analysts have faced this at one time or another. Many end users only know a narrow slice or view of the business in their areas. Rarely do they understand the whole, unless they’re at a very small company.  Another problem is that often the business is understood intuitively, and various areas have differing mental models of how it works.

In this environment, the greatest challenge for a BA is to ensure they can gather and document a shared or consolidated view of the business. If not, they risk delivering a solution that may be a successful project from the delivery view, but a miss in accomplishing business goals.

Enter business modeling. One of the most common approaches to it is to use the Business Model Generation (BMG) framework developed by Alexander Osterwalder and Yves Pigneur. The secret in this model is a common language for describing businesses using nine core components, and a tool for documenting and analyzing business, a business model canvas, of which plenty of examples and information can be found on Google.

Simply put, a Business Model Canvas is where a business can be described by starting with who the customers are (customer segments) and what the products and/or services being delivered are (value proposition). Then there’s the customer-facing view of the business. One needs to understand how the business communicates and transacts business (channels) and how it gets, keeps and grows its customer base (customer relations).

For the infrastructure, we need to understand the capabilities required by the business (key activities) as well as the various assets necessary to run the business (key resources) and the suppliers and supporters that help (key partners). Rounding out the understanding of any business is the financial component — cost centers (cost structure) and types of revenue (revenue streams).

Using the canvas to document the business model, the BA can build an externalized, shared view of how the business works, that helps develop a shared and more general sense of the business. Once this is established, you can use this context to understand how the solution is intended to improve the business and get a clear handle on the business goals of the solution. Therefore, the business model view should be an integral part of any business case or context component of the business requirements document.

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