Why Business Analysts Are So Important for IT and CIOs

A new Forrester report sheds light on this little known, often misunderstood but critical liaison role that can unite the business and IT on enterprise projects, systems development and business strategy.

For two decades, the CIO has been viewed as the ultimate broker between the business and technology functions. But while that may be an accurate perception in the executive boardroom, down in the trenches, business analysts have been the ones tasked with developing business cases for IT application development, in the process smoothing relations among competing parties and moving projects along.

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According to a new Forrester report, however, the reality is less precise than this description. The business analyst position varies depending on the organization, and the line between pure business functions and IT functions has eroded.

What is clear: The most successful business analysts are the ones who blend the temperament and communications savvy of a diplomat with the analytical skills of an intelligence officer. And business analysts are a hot commodity.

The in-depth April 2008 Forrester Research report by analysts Carey Schwaber and Rob Karel provides a better understanding of this crucial yet largely undefined role. "Everyone agrees on the importance of the business analyst role," the analysts write, "but few know exactly what it is that business analysts do."

The 21st century business analyst is a liaison, bridge and diplomat who balances the oftentimes incongruous supply of IT resources and demands of the business. Forrester's research found that those business analysts who were most successful were the ones who could "communicate, facilitate and analyze."

Some business analyst positions tilt more toward business functions such as operations, marketing, finance or engineering; other analysts seem to fit better in more IT-oriented positions such as in applications and architecture groups, or in project management offices.

According to the Forrester analysts, however, not many people, including business analysts themselves, are able to figure out a standard definition (complete with typical skill sets, proper training methods and set career paths) for the business analyst position.

To better understand the business analyst function, Forrester surveyed 338 current and former business analysts and reviewed more than 29,000 business analyst job postings. What Schwaber and Karel found out is that, at present, there are "many different breeds of business analysts, each native to a particular silo within the enterprise, and each focused on addressing the most critical concerns within that silo," they write in the report, "The New Business Analyst."

The 'Business Technology' Analyst: A CIO's Best Buddy

The Forrester analysts also discovered that like many technology-intensive roles inside companies today, the line between a pure business analyst and a pure IT business analyst has blurred. The waters are muddied even more because business's IT needs (such as ERP systems consolidation or enterprisewide data warehouse rollouts) span not only different departments but across entire companies. In addition, newer technology methodologies, such as services-oriented architecture (SOA), require a deep understanding of both business and IT as well as close attention to changing business conditions, write Schwaber and Karel.

So just where should a business analyst reside on an org chart—business or IT? "Although distinguishing among breeds of business analyst makes sense in theory," note Schwaber and Karel, "in practice, trends in both business and IT are forcing business analysts to assume responsibilities outside of their siloed comfort areas."

The ultimate blurring of the business-oriented business analyst and the IT-oriented business analysts, contend the Forrester analysts, is what they term the business technology analyst. And the person in this role can be a CIO's and the IT department's ace in the hole, as well as a better-equipped business liaison.

These new and converged business technology (BT) analysts, write Schwaber and Karel, are the "key to making dynamic business applications a reality by both accelerating the speed at which business applications can be changed and assuring the engagement of the business customer in these changes." BT analysts possess a blend of business and operational know-how and a high degree of tech know-how.

In addition, BT analysts have more "cross-functional and cross-domain" business experience, rather than just focusing on one area or function within the business. Schwaber and Karel predict that the different breeds of business analysts (such as solely business-focused or solely IT-focused) "will slowly dissolve as projects increasingly demand knowledge that spans business functions like marketing and sales and IT domains like process, information, and experience," they write. "As time passes, fewer and fewer business analysts will have the luxury of working only in a single business function or IT domain."

Preparing the Business Analysts of the Future

The challenge for CIOs, the analysts point out, is molding today's business analysts into tomorrow's highly evolved BT analysts. Historically, some CIOs have struggled with how to best use business analysts.

But CIOs have to do something right now to influence the crop of future business analysts because the stakes are too high. "Your future business technology analysts will be your most valuable business analysts because they can single-handedly turn business-requested, IT-delivered applications into tomorrow's dynamic business applications," write Schwaber and Karel.

To do this, CIOs and IT managers can to several things right now, the analysts say. Here are a few of the Forrester analysts' ideas:

Look in their own backyards.

Those employees already working as business analysts are well-suited to the role of business technology analyst "because they're already familiar with both the business functions in question and with business analysis disciplines like process modeling," write Schwaber and Karel. "The best candidates are business-oriented business analysts who want more direct control over how business processes are automated, and IT-oriented business analysts who want to move from IT into the business."

Look for potential business technology analysts in typically untapped areas of the business.

IT executives also should try fishing in the pools of business subject-matter experts for business technology analyst talent. "Of course, business-oriented business analysts and business subject matter experts don't report to CIOs," the analysts write. "Convincing them of the value of the business technology analyst role might require some education and even evangelism."

Establish specialized centers of excellence for business technology analysts.

Given the nature and demands of the role, business technology analysts will have to collaborate with a wide range of critical business and IT stakeholders. "As a result, they will likely spend their days scattered across the enterprise," note Schwaber and Karel. "To ensure that the business technology analyst role is coherent, supported and ultimately attractive, CIOs should establish a forum in which these folks can share best practices, such as a business technology analysis center of excellence."

In the end, the more business technology analysts that are working in the business, the better off the CIO and IT function will be—no matter if the BT analysts are reporting into IT or the business side. That's because those IT-savvy analysts, who will have a more in-depth understanding of and more expertise in technologies, will "ultimately help the business make better decisions when it comes to its interactions with IT," contend the Forrester analysts. And, "CIOs have new allies in the business."

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