International Institute of Business Analysis

1
International Institute of Business Analysis

• Chapter 2
• Enterprise Analysis

2.1 Introduction 2.2 Creating Business
Architecture 2.3 Conducting Feasibility
Studies 2.4 Determining Project Scope 2.5
Preparing the Business Case 2.6 Conducting Risk
Assessment 2.7 Preparing the Decision Package 2.8
Prioritizing Projects 2.9 Launching New
Projects 2.10 Managing Projects for Value 2.11
Tracking Project Benefits
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IIBA BOK

• Defines the activities, tasks, and knowledge that
  a BA needs to know
• Does not prescribe a sequence for executing the
  activities and tasks
• Is not a methodology

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BABOK Chapter 2
2.1 Introduction Enterprise Analysis
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2.1 Enterprise Analysis

• BA involvement
• Not all the work done by a BA is for a defined
  project
• Enterprise Analysis activities are pre-project
  work or early feasibility phase of a project
• Outputs of Enterprise Analysis are inputs for
  requirements planning and high-level requirements
  goals for elicitation
• Enterprise Analysis begins after executives
  develop strategic goals plan
• Enterprise Analysis

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2.1 Enterprise Analysis

• Where does Enterprise Analysis begin and end?
• EA begins after executives develop strategic
  goals plans
• EA continues until new project programs are
  proposed to management for go/no go decision
• End after project outcomes are measured analyzed

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2.1 Enterprise Analysis

• Defined
• Collection of pre / early project activities
  that provides the basis for company decision
  making, and determining the best project
  investment path (adds profit and value to
  companies future).
• Provides business context to project requirements
  elicitation solution design for a given
  initiative and/or long-term planning
• Increases understanding of the organizational
  environment how projects will benefit the
  enterprise

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2.1 Enterprise Analysis

• BA Enterprise Analysis Role
• Works with key stakeholders SMEs to provide
  management the information needed to select and
  prioritize projects
• Collaborates with project managers, business unit
  managers, I.T. architects / developers to
  prepare decision support information for
  management

• Enterprise Analysis Activities
• Creating Maintaining Business Architecture
  (section 2.2)
• Conducting Feasibility Studies (section 2.3)
• Scoping new Business Opportunity (section 2.4)
• Preparing Business Case (section 2.5)
• Conducting Initial Risk Assessment (section 2.6)
• Preparing Decision Package (section 2.7)
• Selecting and Prioritizing Projects (section 2.8)

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2.1 Exam prep

• 21 of the exam questions are on Chapters 1 2
• Be familiar with all the tables
• Table 1.0, pg. 19 - Enterprise Analysis
  Activities Linked to Business Planning events
• Enterprise Analysis begins with strategic goals
  and plans from executive/senior level management
• Table 2.0, pg. 23 Enterprise Analysis Overview
• Table 3.0, pg. 24 Project Sizing Grid
• Table on pg. 25 Guidelines for Scaling
  Enterprise Analysis Activities (not numbered)

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BABOK Chapter 2
2.2 Creating and Maintaining the Business
Architecture
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2.2 Business Architecture

• Set of docs and models about the bus. vision,
  mission, strategy, functions, rules, policies,
  processes, orgs, competencies locations
• Describes the long-term goals and objectives,
  business environment, technological environment,
  and external environment.
• Provides a common planning framework that fosters
  strategic and operational alignment.

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2.2 Business Architecture Skills

• Business strategy
• Business process engineering
• Business analysis
• Business modeling
• Business rules, policies, terminology
• BA must assess whether to build just the future
  state (to-be) Business Architecture model or both
  the as-is and to-be

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2.2 Business Architecture - Exam Prep

• Name 2 business architecture frameworks.
• What models may be defined within a Business
  Architecture? p. 33

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2.2 Business Architecture Techniques (Framework)

• Zachman Framework p.32
• 20 yrs old
• Evolved into universal schematic for describing
  complex enterprise systems
• POLDAT Framework
• Often used in BPR projects
• Framework is organized into Process,
  Organization, Location, Data, Application, and
  Technology

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BABOK Chapter 2
2.3 Conducting Feasibility Studies
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2.3 Feasibility Studies

• May be used to
• determine viability of a business opportunity
• address a business problem to be resolved
• e.g. Accounting system is archaic, must be
  replaced
• ascertain solution alternatives capability of
  meeting the business need in terms of economics,
  operational, technical feasibility.
• e.g. Solution alternatives Build new accounting
  system in-house/ offshore/ purchase package
  (Peoplesoft/Oracle)

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2.3 Feasibility Studies

• Used at different stages
• When execs are developing strategic goals
• During Enterprise Analysis to help portfolio mgmt
  team determine best investment path
• During requirements and design to conduct
  trade-off analysis among solution alternatives

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2.3 Feasibility Studies

• BA knowledge required
• Financial analysis
• Industry and organizational vision
• Broad understanding of IT infrastructure

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2.3 Feasibility Studies

• Deliverable Feasibility Study Report
• Identifies each of the solution options available
• Rates the likelihood of each option achieving the
  desired result
• Outcome is a recommended solution option to be
  further defined in a Business Case.

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2.3 Feasibility Studies - Exam Prep

• Put these Feasibility Study pieces in order
• Identify Potential Solutions
• Conduct a Current State Assessment
• Determine the Feasibility of each Option
• Document and Communicate the Results of the Study
  
• Determine Requirements for the Study Business
  Problem or Opportunity
• Determine the Objectives, Scope and Approach and
  Plan the Feasibility Study Effort

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2.3 Feasibility Studies - Exam Prep

• Put these Feasibility Study activities in order
• Identify Potential Solutions 4.
• Conduct a Current State Assessment 3.
• Determine the Feasibility of each Option 5.
• Document and Communicate the Results of the Study
  6.
• Determine Requirements for the Study Business
  Problem or Opportunity 1.
• Determine the Objectives, Scope and Approach and
  Plan the Study Effort 2.

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2.3 Feasibility Studies - Exam Prep

• What techniques could be used to analyze the
  feasibility of each solution option?

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2.3 Feasibility Studies - Exam Prep

• What techniques could be used to analyze the
  feasibility of each solution option? (p. 43-44)
• Market surveys
• Technology feasibility assessment
• Interviews
• Prototyping
• Risk identification
• Competitive analysis
• COTS package comparison
• Decision tables
• Probability analysis

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2.3 Exam Prep

• Must the Feasibility Study be conducted prior to
  completion of a business case?

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2.3 Exam Prep

• Must the Feasibility Study be conducted prior to
  completion of a business case?
• Feasibility studies may be conducted prior to,
  during or after the completion of a business
  case.
• However,
• usually feasibility studies are undertaken as
  part of the overall analysis process to create
  the business case (p. 35)

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BABOK Chapter 2
2.4 Determining Project Scope
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2.4 Project Scope

• Purpose
• Further define a business solution after it has
  been identified

• Deliverable
• Scope Statement a component of the Business
  Case

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2.4 Project Scope Process
.1 Draft preliminary project scope
statement - developing a high level description
of work to be performed - identify elements
included within excluded from proposed
solution - .2 Develop high level work
breakdown structure (WBS) - decomposing work
into lower level deliverables - during project
initiation phase, WBS only decomposed to 2 or 3
levels .3 Develop time cost estimates -
develop initial cost and resource estimates -
develop initial milestone schedule .4 Describe
project approach - Initial approach (e.g. break
project into releases to deliver a subset of
solution)
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2.4 Project Scope Skills

• The Business Analyst requires the following
  skills to scope and define the proposed project
• Planning, estimating, scheduling
• Scope definition decomposition
• Interpersonal skills (e.g. negotiation, conflict
  management, etc.)
• Documentation diagramming (e.g. entity
  relationship, process, workflow diagrams)
• Communication skills (e.g. presenting,
  interviewing, listening, etc.)

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2.4 Project Scope Exam prep
Explain the following Techniques for defining
Scope (p49-50) - Scope Decomposition - Work
Breakdown Structure - Product Breakdown
Structure - System Interface Analysis -
Context diagram - Use case diagram
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BABOK Chapter 2
2.5 Prepare Business Case
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2.5 Business Case
IIBA Operational Vision

• Description
• Business Case describes justification for the
  project in terms of the value to be added to the
  business as a result of the project outcomes vs.
  the cost to develop the new solution.
• Business Case includes qualitative and
  quantitative benefits, estimates of cost and time
  to breakeven, profit expectations, follow-on
  opportunities.
• Purpose
• Submitted to management for determining whether
  further investment is warranted

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2.5 Business Case Knowledge

• The Business Analyst typically leads the effort
  to construct the business case, in collaboration
  with other subject matter experts.
• Knowledge required
• Accounting practices in order to quantify costs
  and benefits of proposed project
• How to translate the proposed change into
  financial terms
• Organizational strategy and goals
• Business processes and the supporting technical
  infrastructure
• Financial analysis to forecast the economic
  impacts of the proposed new project (may be
  necessary to enlist the assistance of financial
  analysis experts to support this activity)
• Technology tools to represent the benefits and
  costs

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2.5 Business Case - Process
.1 Identify Quantify the Benefits -
recommend solution in terms of qualitative
measurable quantitative benefits - benefits
should relate back to strategic goals elements
of balanced scorecard .2 Identify Quantify
the Costs - estimate total net cost of solution
(include total cost of ownership) - I.T.
projects involve higher uncertaintyavoid fixed
cost estimates - cost estimate accuracy should
help to confirm viability of the proposed
project .3 Prepare the Business Case - create
at level of detail sufficient to demonstrate
viability secure a decision .4 Determine
Measurement Process for Costs Benefits -
should articulate proposed benefits will be
assessed and evaluated - may include a plan for
benefit measurement reporting
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2.5 Business Case Deliverable

• Deliverable Business Case document
• See p 54-55 for sample table of contents
• Some of the Bus. Case components are developed in
  other sections of Chapter 2, e.g.
• Scope statement
• Risk assessment

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2.5 Business Case Exam prep

• Explain each stakeholders involvement in the
  Business Case (p 53)
• Executive sponsor of the proposed project
• Business process owner and SME for the business
  area to be changed
• IT manager who is supporting the business area
• Senior PM
• Portfolio mgmt team (project investment
  governance group)

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BABOK Chapter 2
2.6 Conduct Initial Risk Assessment
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2.6 Initial Risk Assessment
IIBA Operational Vision

• Purpose
• Determine if the proposed project carries more
  risk than the organization is willing to bear
• Description
• Project Risk is an uncertain event or condition
  that, if it occurs, has a positive? or negative
  effect on at least one project objective (e.g.
  time, cost, scope, or quality)

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2.6 Initial Risk Assessment Knowledge

• Knowledge required by Business Analyst
• Risk management principles concepts
• Financial analysis profit projection models
• Business enterprise structure, operations,
  skill sets
• Organizational readiness for the change
  initiative
• Technical feasibility of the proposed solution

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2.6 Initial Risk Assessment - Process
.1 Identify Risks - identify analyze
business, financial, technical risks .2
Assess Risks - analyze the probability of the
risk occurring impact if risk does occur .3
Plan Risk Response(s) - for high
probability/high impact risks, identify risk
mitigation strategy contingency .4 Assess
Organizational Readiness - quantify change
management risk, impacts, and response plans -
describe quantify risk to do nothing -
calculate an overall risk rating (in terms of
costs, time, quality)
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2.6 Initial Risk Assessment Deliverable

• Deliverable
• Risk Rating Risk Response Plan (typically added
  to Business Case)
• Risk Rating? calculated in terms of costs, time,
  quality or business operation
• Risk Response Plan
• for high probability/ high impact risks, identify
  risk mitigation strategy contingency plan
• Assess cost of each risk response plan

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2.6 Initial Risk Assessment Exam Prep
What types of risks are identified during the
process of identifying project risks?
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2.6 Initial Risk Assessment Exam Prep

• What types of risks are identified during the
  process of identifying project risks?
• Business risks
• Financial risks
• Technical risks

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2.6 Initial Risk Assessment Exam Prep

• Which information gathering techniques can be
  used for identifying risks?
• Brainstorming
• Root cause identification
• SWOT analysis
• All of the above
• None of the above

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2.6 Initial Risk Assessment Exam Prep

• Which information gathering techniques can be
  used for identifying risks?
• Brainstorming
• Root cause identification
• SWOT analysis
• All of the above
• None of the above

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BABOK Chapter 2
2.7 Preparing the Decision Package
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2.7 Preparing the Decision PackagePurpose and
Description

• To provide project proposal documentation to
  decision makers
• BA role Compile documents and summarize
  information gathered during Enterprise Analysis
  activities for proposed project
• Includes or references all information gathered
• Identifies and justifies next steps

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2.7 Preparing the Decision PackageKnowledge and
Skills

• Knowledge of
• Portfolio management (covered later)
• Project selection and prioritization
• Skilled in
• Written communication
• Executive briefing preparation

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2.7 Preparing the Decision Package Process and
Elements

• Compilation of all relevant information from the
  Enterprise Analysis activities
• Preparation of an executive presentation
  summarizing the project(s?) and recommendations

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2.7 Preparing the Decision Package Stakeholders

• Business executive sponsor
• Presents proposal to senior management
• Portfolio management team
• Reviews project proposal and determines whether
  to proceed

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2.7 Preparing the Decision Package Deliverables

• Business Case and supporting Enterprise Analysis
  reports
• Executive Briefing

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2.7 Preparing the Decision Package Study
Questions

• What is the decision package?
• What role does the BA normally play in
  relationship to the decision package?
• What knowledge and skills must the BA have in
  order to prepare the decision package?
• What are the predecessor activities to preparing
  the decision package?
• What are the processes and elements used in
  preparing the decision package?
• Who are the stakeholders for the decision package
  and what are their interests?
• What are the deliverables for the decision
  package?
• Identify techniques used to prepare the decision
  package.
• What is the name of the committee that reviews
  the project proposal to determine whether to
  invest?

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Project Portfolio Management (PPM)

• What is Portfolio Management? (not in BOK)
• Originally coined in the financial and investment
  community as portfolio management when managing
  assets of a mutual fund, including choosing and
  monitoring the appropriate investments and
  allocation of funds.
• Project Portfolio Management (PPM) has come to
  mean the processes that encompass the selection,
  prioritization, funding, and monitoring a
  complementary mix of projects whose benefits and
  outcomes will collectively provide the most value
  to the organization and its strategic objectives
  based on the best possible allocation of
  resources.
• Project Portfolio Management is a management
  process designed to help an organization acquire
  and view information about all of its projects,
  then sort and prioritize each project according
  to certain criteria, such as strategic value,
  impact on resources, cost, and so on.

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Project Portfolio Management (PPM)

• The objectives of PPM are similar to the
  objectives of managing a financial portfolio
• To become conscious of all the individual
  listings in the portfolio
• To develop a "big picture" view and a deeper
  understanding of the collection as a whole.
• To allow sensible sorting, adding, and removing
  of items from the collection based on their
  costs, benefits, and alignment with long-term
  strategies or goals.
• To allow the portfolio owner to get the "best
  bang for the buck" from resources invested.

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BA role in Project Portfolio Management

• The never-ending demand for efficient business
  solutions and new products and services,
  organizations are adopting a process of
  professional Business Analysis to increase the
  value projects bring to the organization
• Senior BAs may facilitate strategic goal setting
  sessions.
• The BA collaborates with business sponsors,
  business representatives, PM, and IT management
  to scope projects and to make time and cost
  estimates, quantify business benefits and prepare
  business cases.
• The BA works in partnership with the PM to update
  the Business Case at key checkpoint reviews,
  providing management with information to help
  determine whether to continue to invest in
  project.
• BA collects relevant information about propose
  new projects and provides the executive
  presentation and decision package to the business
  sponsor to propose a new project to the
  organizational project investment governance
  body.
• Senior BAs may be asked to help plan and
  facilitate portfolio management meetings and
  present the proposal for new projects
• The BA ensures metrics and measurements are in
  place, analyzed and reported to business sponsor
  to track actual vs. expected benefits as
  documented in the business case.

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BABOK Chapter 2
2.8 Selecting and Prioritizing Projects
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2.8 Selecting and Prioritizing Projects

• Project Sponsor presents completed decision
  packages to the Portfolio Management Group
• Portfolio Management is the group that reviews
  and selects initiatives for the organization to
  move forward with. This includes
• Research Initiatives
• New Product Development
• IT Enhancements
• Internal Business Improvement Projects
• New Business Endeavors

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2.8 Selecting and Prioritizing Projects

• BA Role within Selecting and Prioritizing
  Projects
• Prepare the project proposal information using
  opportunity assessment and documentation
  techniques
• Accompany project sponsor when presenting
  decision packages
• Participate in improving process of project
  selection and prioritization
• Prepare information to enable executives to
  select and prioritize new projects

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2.8 Selecting and Prioritizing Projects

• Predecessors
• Completed decision package
• Techniques
• Executive-Level Communication Techniques
• Presentation skills
• Structured decision-making process with
  predetermined evaluation criteria
• Management review and oversight process
• Deliverables
• Project Portfolio (Prioritized list of projects)

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Study Questions

• What the purpose of selecting and prioritizing
  projects?
• What is Project Portfolio Management?
• What role does the BA normally play in
  relationship to project portfolio management
• What knowledge and skills must the BA to
  participate in the project portfolio management
  process?
• What are the predecessor activities to selecting
  and prioritizing projects?
• What are the deliverables for selecting and
  prioritizing projects?
• What are some project types considered for
  portfolio management?
• Who are the stakeholders for portfolio
  management?
• Identify techniques used in selecting and
  prioritizing projects?
• What are the steps to launching a new project?
  What is the BA role?
• What is the BA role during project control gate
  review process?
• When is tracking project benefits achieved? What
  is BA role?

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BABOK Chapter 2
2.9 Launching New Projects
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2.9 Launching New Projects

• Essential Skills starts here
• Once a project has been approved
• A project charter is prepared and a PM is
  assigned
• The BA collaborates with the PM throughout the
  project initiation and planning process
• The BA begins to plan the requirements
  elicitation, analysis and documentation
  activities.
• BA collaborates with system architect during
  initial design

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BABOK Chapter 2
2.10 Managing Projects for Value
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2.10 Managing Projects for Value

• Once projects are funded they must be monitored
  throughout the project life cycle
• The Business Analyst plays a critical role in the
  project control gate review process
• Must ensure that the Business Case remains valid
• Must ensure that continued investment in the
  project is still warranted.

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2.10 Managing Projects for Value

• Projects are validated against Business Case at
  key project milestones
• Reviewed by management
• Validate time and cost
• Revisit project priority
• Approve for next phase
• BA Role
• Update documents, project plans, cost/schedule
  estimates, risk assessments and business case
• Present Business Case at checkpoint control gate
  reviews and make recommendation for future funding

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BABOK Chapter 2
2.11 Tracking Project Benefits
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2.11 Tracking Project Benefits (after project
completion)

• After project solution is implemented, project
  team is disbanded
• BA must track whether project ROI goals were met
• Following implementation BA sets up metrics and
  measurements to track ROI
• BA reviews data, tracks trends and reports
  findings
• BA determine root causes of any unexpected
  results
• Tracking can continue for months and/or years
  after project is completed