What Is Business Analysis?

Behind every functional system, efficient process, or successful product launch, there’s a structured approach to understanding what the business truly needs. This structured approach is known as business analysis. It helps teams evaluate objectives, set achievable expectations, and outline clear actions before any execution begins.

When business analysis is skipped, work often runs on guesswork. The result can be rising costs, wasted effort, delayed timelines, or even projects that never deliver the intended value.

Let’s understand what business analysis is, the step-by-step process for performing it, the techniques and frameworks used in business analysis, and how AI can transform the business analysis process.

What is Business Analysis?

Business analysis is a practical approach to understanding how a business works, identifying business needs, and finding solutions to solve problems. It also involves understanding business objectives and how to achieve them effectively.

Business analysts, who perform business analysis, use different techniques, including stakeholder review, survey, questionnaire, etc., to make informed decisions. Their main aim is to ensure time, money, and effort go toward things that truly matter and provide real value to business owners.

This discipline isn’t tied to just IT or software teams. It’s equally valuable in sectors like healthcare, manufacturing, finance, or aerospace, where decisions have a direct impact on systems, processes, or people.

Example: Let’s assume a logistics company is struggling with delayed deliveries. In this case, a business analyst analyzes delivery routes, warehouse handling, and customer feedback. Instead of guessing, they use facts to recommend changes like better routing software or updated shift plans.

The Business Analysis Process (Step-by-Step)

There is no standardized process to perform business analysis. Every business analyst follows different approaches.

However, IIBA has published the Business Analysis Body of Knowledge (BABOK) guide that provides the best practices for business analysis. It covers six knowledge areas, and each can be followed sequentially.

Below is a detailed look:

1. Business Analysis Planning and Monitoring

This is the preparation stage where the approach for the analysis is set. It includes:

• Identifying key stakeholders
• Choosing the appropriate technique to collect information
• Outlining timelines, deliverables, and communication plans

The goal is to ensure everyone understands how the analysis will be done.

2. Elicitation and Collaboration

• Interviews and discussions with stakeholders
• Workshops, surveys, or observation sessions
• Reviewing existing documentation, reports, or data

This kind of active collaboration can help business analysts avoid missing critical requirements.

Check out the guide on requirements gathering techniques to learn more.

3. Requirements Life Cycle Management

Once requirements are elicited, it is very important that requirements stay accurate and appropriately documented from start to finish. According to Statista, 48% of projects fail due to poorly documented requirements. So, this step can’t be ignored!

This step ensures:

• Requirements are documented, updated, and tracked
• Approved changes are recorded and communicated
• Stakeholders are kept aligned as the project evolves

This is a continuous process.

4. Strategy Analysis

Before implementing the solution, it is necessary to understand the business objectives and problems they are facing. This step involves: 

• Understanding the current state of the business or process
• Identify problems and opportunities
• Define the desired future state and potential risks

With this context, a solid solution can be developed to achieve business objectives.

5. Requirements Analysis and Design Definition

The next step is to analyze requirements, and it includes: 

• Breaking down vague requirements into well-structured requirements.
• Prioritizing requirements
• Exploring possible solutions

6. Solution Evaluation

After implementation or during pilot runs, the solution is checked against objectives. It includes:

• Assessing performance metrics
• Identifying gaps or improvements required in key business areas
• Recommending adjustments or enhancements

While these steps are written according to the BABOK guide, business analysts have the freedom to use their approach. Sometimes, they might need to perform multiple steps together.

Also read: 5 AI Tools for Business Analysts for Better Requirements Management

Business Analysis Frameworks and Techniques Every Analyst Should Know

Common Frameworks for Business Analysis

Business analysis frameworks give the structure to the analysis process and decision-making. Here, we have covered a few common frameworks:

• SWOT: It analyzes the requirements for strengths, weaknesses, opportunities, and threats.
• PESTLE: It is used to analyze requirements against various external factors, including political, economic, social, technological, legal, and environmental factors.
• MoSCoW: By using this framework, requirements can be grouped into “must have,” “should have,” “could have,” and “won’t have.”
• 6C’s Method: It helps business analysts to check clarity, conciseness, completeness, correctness, consistency, and concreteness of requirements.
• PABLO: Prioritizes features by performance, agility, business value, low risk, and overall impact.
• INVEST: It ensures user stories are independent, negotiable, valuable, estimable, small, and testable.

Frequently Used Techniques

Below are the common techniques that business analysts use for requirements elicitation.

• Interviewing stakeholders: Communicating with stakeholders to gather information.

• Brainstorming & workshops: Brainstorming sessions and workshops help to engage with team members for efficient requirement discovery.
• Process Modelling & User Stories: Maps workflows and defines user needs.
• Document analysis: Collecting details from different documents, including user manuals, SOPs, compliance documents, etc.

Business Analysis vs Business Analytics: Key Differences Explained