Business Analysts Hold the Key to the CIO’s Future

For years CIOs (or should I say, IT managers) were chastised for being too reactive, too technical, too tactical. In an effort to address this “shortcoming,” CEOs and their consultants schooled IT managers on how to think strategically. And what fine students you have become.

During the last few years (which we all know have been very tough on IT budgets) IT leaders the world over have put in place a number of strategies to maximize efficiencies, drive cost savings and generally improve the speed and responsiveness of IT.

Unfortunately, the highly lauded strategies of yesterday have had some very negative consequences for CIOs and their teams. Consequences that are so significant that, if we don’t do something about them soon, will relegate the CIO (and the IT group overall) to a position of vastly diminished relevance to the business. I’ll explain.

Strategic IT management: Unexpected side effects

In the quest for ever-improving efficiency and customer responsiveness, CIOs the world over have applied three basic strategic themes.

• Standardize around key packages: Avoid custom applications like the plague. Go for standardized software. And what’s more, if it can be SAP or Oracle, even better. Build a focus and competency in a specific application suite and work it.
• Outsource, outsource, outsource: Wherever possible, outsource to a third party. ASP, MSP, BPO, consultants, bodyshop. Whatever could be found that offered a cost and speed advantage to doing it in house.
• Get “tight” with the business side: In order to get closer to the business side of the operation, improve understanding, shorten implementation time frames and increase accountability, CIOs made a number of organizational changes. Chief among them: creating the IT-business liaison role.

In the rush to standardize on specific packages and to improve business relationships, the traditional in-house business analyst role has morphed. First, outsourcing brought about a reduction in the number of BAs needed. After all, the outsourcer said they would cover that work as part of the contract.

Second, with solution development firmly focused on a specific application environment (such as SAP, Oracle or Siebel) much of the traditional duties performed by the BA shifted to the application analyst. Just without a whole lot of business analysis. Because with a solution already in hand, the application analysts focused their efforts on configuring and administering the chosen package solution and “making it work” for the business. This meant that the classic role of business analysis and solution definition yielded to the force of the customizable package.

Finally, the role of the IT liaison, which many BAs took on in early days, turned out to be more about managing budgets and expectations, and providing a single face to the customer than it was about engaging in problem analysis and solution design. The problem analysis and solution design work was left to the outsourced solution provider.

The changing role of the Business Analyst

I first noticed this change in the BA role about 10 months ago, when two separate clients had great difficulty coming up with a single BA to participate in the project with which I was involved. It took almost two months to finally get budget approved to bring in a new person once the CIO gave up on finding anyone internally with the right skills.

At first I thought these were just isolated incidents, until I noticed this issue recurring nearly every place I went. I finally realized how pervasive this issue is while attending a recent industry conference.

Sitting at a table with 10 CIOs who are employed by companies with revenues of $1 billion or more, I asked the group whether they had noticed the virtual disappearance of the BA in their organizations. Without missing a beat, the CIO of a famous consumer packaged goods company said: “Are you kidding me? It’s an absolute disaster. I dread getting a call from a business unit to discuss an issue or problem they are having. If it’s not about SAP, I’ve got no one to send them who can have an intelligent conversation. All I can do is send them a consultant.” Ouch.

What happens when the Business Analyst goes away?

The decline of the business analyst has been gradual. Yet, their traditional capabilities are crucial today for IT to add value to the business. In particular I’m talking about the skills of:

• problem analysis;
• requirements definition;
• business case formulation;
• project scoping and definition;
• and finally translating all that into a set of solution options and sound technical requirements.

Without in-house BAs to do this work, IT organizations now find themselves with a major void in their service capabilities. IT’s customers are feeling these effects, even though they can’t quite identify how or why. But it won’t be long now. Pretty soon they won’t bother calling IT at all. They will just reach out to the consultants and the outsourcers, since these are the people with whom they end up dealing anyway.

What’s even more distressing to me is that it seems that most IT leaders have lost sight of what a real BA is suppose to do. Case in point:

I recently searched the job site Dice.com for “business analyst” and found about 2,500 relevant postings (about 3% of all IT jobs). Yet, when I examined these closely, it turned out that the vast majority of the posts were placed by outsourcing companies, professional services firms, software companies and contract labor companies. Very few of these positions are for in-house BA jobs.

Digging just a little deeper into the job postings reveals that the list of key skills required of today’s Business Analyst falls far short of what we all know is needed for success. Of the 50 skill areas identified in the posted positions, only three are related to a specific functional business competency. The rest of the required skills are all IT-specific technical or process skills. Many of the posted jobs are essentially describing project managers.

BA and the Bottom line

Business analysis is the absolute most important competency for an IT organization. It is the very heart and soul of the value IT is meant to bring to the business. Despite the best intentions, many CIOs have lost this critical skill in their organization and they are quickly forgetting what it really entails.

Therefore, strategy No. 1 for any CIO looking to retain a strategic role vis-a-vis your business peers is to bring back the business analyst with the right skills and capabilities.