When I tell people I'm a business analyst they usually ask 'What do you analyse?' Well, I analyse businesses – to identify their needs and recommend solutions to their problems.
This explanation is based on the International Institute of Business Analysis (IIBA) definition, which is quite broad: 'Business analysis is the practice of enabling change in an enterprise, by defining needs and recommending solutions that deliver value to stakeholders'. But what 'needs' and 'solutions' are we talking about?
What the business needs can vary, because sometimes its needs are not problems that require solving as such. Sometimes, they represent new opportunities that the business ought to be exploiting, for example new technologies.
Of course, any good analyst's recommendations must be appropriate for the size of the business.
For smaller businesses, common measures include introducing new technology, whether software or hardware. When it comes to small and medium-sized businesses (SMEs), business analysts are less likely to be involved in company direction, policy, or structure. This is just because SMEs tend to have a simpler structure and a singular direction – often based on the skillset of their founders.
SMEs face many of the same problems that larger businesses do, but they have a unique set of advantages and disadvantages when dealing with these. For instance, they are prone to gradually increasing inefficiency – especially if they have grown rapidly – because they face new demands as they expand.
Smaller businesses often try to hire or outsource their way out of problems. It seems obvious: there is lots of work to do, so more people are hired to do the administration. But this compounds the issue: there are now more people to manage and organise, yet this hasn't generated any more income.
Profit margins are frequently more variable in SMEs, so they cannot afford to make mistakes. Every penny wasted comes straight out of the owner's pocket. It therefore becomes critical that any problems or inefficiencies are dealt with quickly, because these can make a big difference to the profitability and even the viability of the business. But how?
An SME might not have people with the skills to review processes, identify savings, or choose new systems. The team members certainly do not have the spare time, and the business doesn't have a limitless budget to throw at the problem either.
This is where the work of an independent business analyst could prove revolutionary. An analyst can review the business and identify ways to reduce the team's workload. Crucially, they will look for ways to do this without hiring more people – which will keep costs under control and reduce management time.
A good business analyst will talk to members of the team, get to know the business inside-out, and recommend any practical changes that can be made. They will also be able to help the business to make those changes – and a big advantage is that SMEs can implement them much more quickly than larger organisations.
The next article will explain in detail the process of business analysis, decision-making and implementation of recommendations.
Terry Hopper is the managing director and founder of Middlestone Business Analysis
Contact Terry: Email
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