A Study on the Relative Importance of Underlying Competencies of Business Analysts

Abstract

Business analysis is a key factor of project success or failure in information systems. However, there are few studies on business analysis competencies. The objective of this paper is to identify which competencies a business analyst (BA) needs, and analyze the importance weights and priorities of business analysis competencies. Literature review yielded 6 competency dimensions and 30 competencies. Based on interviews with 12 experts and analytic hierarchy process analysis, the relative importance weight and priority of each business analysis competency were analyzed. Moreover, an importance-perception gap between stakeholders in different positions was identified. This result can be used as selection and development criteria for superior BAs that are responsible for solving business problems using information systems solutions.

1. Introduction

According to the Chaos Report, the project success rate in information systems development environment is only 39%, while the failure rate is 61%. The more worrying result of the report is that large project success rate was 10% in 2012 [1] and 6% from 2003 to 2012 [2]. There are many reasons for projects to be terminated or delayed [3]. The main causes that lead a project to failure are lack of project understanding [4], less user involvements [5-7], requirements uncertainty [8-10] or change of requirements [11,12].

The requirement is a documented representation of a condition or capability needed by users to solve problems [13,14]. Requirements are documented wants or needs of users that must be identified or analyzed for analysts or developers to solve problems. However, documented requirements are usually unclear, because there is a large communication gap between users and developers [15-17]. The reason for this gap is that developers are usually using a different language from users, which are seldom involved in projects. As such, it is an obstacle for analysts or developers to provide solutions to users [5].

Requirements engineering is a good solution to remove the obstacles regarding requirements. It is a systematic and disciplined approach to identify, analyze, and specify requirements and it provides guidelines on requirements processes or techniques, such as elicitation, analysis, specification, and traceability [18-22]. Requirements engineering is useful for effective communication with stakeholders for project success [23,24] as ineffective communication on requirements may result in project failure [25].

There are several types of requirements in requirements engineering, among which, user requirements and system requirements are key to be identified, traditionally, by system analysts. However, user requirements are easily disappearing [26]. Once system analysts identify user requirements, they promptly transfer them to system ones for the design and implementation phases, since most system analysts are focusing on systems rather than users. Even project managers are allocating system requirements to developers, instead of user ones because most requirements specifications are documented by system requirements. Therefore, developers are aware of system requirements only as it can be a big burden to respond to change of user requirements. These being the reasons why there is a communication gap between users and developers, it is reasonable to select someone who is responsible for user requirements to keep or respond quickly to change. [27,28].

Business Analyst (BA) numbers are increasing globally [29]. The growth rate of business analysis jobs is almost 22.1% according to recent research [30]. This indicates that BA has been recognized as a very critical role in many organizations. BA raises project success rates, provides correct solutions aligned with the organization’s strategy, and increases competitiveness through effective communication between users and developers [17,31-35]. The main role of a BA is as a bridge [31] or a change agent [17] in the middle position to identify and manage user requirements. They are responsible for transferring requirements or information of users and developers, facilitating their ideas, and resolving conflicts occurred from decision gaps between them. It means that BAs must speak fluently business and technological language, while having soft skills and positive mindset to make all stakeholders satisfied [17,33,36].

In Korea, many finance companies started to setup a business analysis organization. However, they did not stabilize in the organization, because of lack of perception of BA role or of their performance [29]. The BA role may be duplicated by traditional roles, such as project leader or system analyst. Basically, there are no clear criteria for selecting and developing BAs, thus they are hired without a systemic evaluation process on their performance, experience, knowledge, skills, or attitude [37], and many BAs are working on business analysis position without any official assessment of their qualities [38]. This is the reason they do not gain trust from other stakeholders and work as bridges in limited projects.

Based on the background, two research questions were derived:

This study can be useful to researchers, project managers, human resource development (HRD) specialists, education instructors, BA managers, and BA practitioners in identifying relevant competencies enabling efficient BAs in information system development.

 

2. Literature Reviews

2.1 Competency

According to the Oxford Dictionary, competency (or competence) is defined as the “ability to do something” or the “ability for a work [39].” McClelland first proposed the concept of competency in 1973. He proved that school grades have no real power in predicting competency in real life outcomes and argued that a test should be designed to reflect changes in what people have learned. He asserted that it is meaningless to find a characteristic that cannot be changed by training or experience in his paper [40]. Subsequently, the concept of competency has been developed over decades. In 1982, Boyatzis [41] mentioned that competencies are composed of the motivation, skills, self-image, social roles or knowledge needed for successful job performance. In 1989, Jacobs [42] defined that competencies as observable skills and abilities required to successfully complete the job performance. According to Gonczi and Hager’s 1990 paper, competent experts are defined as those who have the necessary attributes for the appropriate qualities of job performance; competencies are attributes such as knowledge, abilities, skills and attitudes, the performance of a role or tasks, and the standard to evaluate and verify the performance and capabilities for the roles and tasks [43]. In 1993, Spencer and Spencer defined competencies as underlying characteristics of better performers, such as motives, traits, self-concepts, knowledge, and skills [44]. Meanwhile, Strebler, in 1997, stated that the definition of competency is related to a competency framework that is composed of two models relating to the “underlying characteristics of a superior individual” and “the ability to perform tasks to a prescribed standard,” which are expressed, assessed, and measured as competencies. Therefore, he expressed competencies as individual behaviors and minimum standards of competent performance [45]. Hoffman, in 1999, derived the definition of competency from output competencies of the concept of “competent performance” that can be the result of education, and from input competencies of the concept of “underlying attributes of a personal” that an individual needs to achieve competent performance [46], through a literature review and by using the human performance model of Rummler [47].

Competencies may provide a guideline for evaluating resources that are excellent in work performance and can be used for developing education programs for improving competencies when required [37,46,48]. There is the advantage that competencies may protect from personal bias on human resource capability through the same standard [44]. Competencies must be developed continuously through experience, education and training, supported for better work performance and meeting goals, strategies, and missions of the organization to be changed [49-52]. However, if the tasks are more complex, output competencies can be difficult to measure, because output competencies must be composed of common or broad tasks [46,49]. Input competencies, such as characters, motives, traits, intelligence, and mental attributes, are also difficult to develop through education and training [46], except knowledge and skills.

2.2 Business Analysis

An information systems development environment is composed of problem areas and solution areas [27]. The guide to the business analysis body of knowledge (BABOK) [17] of the International Institute of Business Analysis (IIBA), established in 2003, defines the concept of business analysis as activities needed in the middle between the problem area and the solution area. The problem area refers to the current business environment problems, and the solution area refers to the future development environment solutions [31]. BABOK [17] defines business analysis in detail as the practice to facilitate organizational change, provide justification of change and designs, and describe valuable solutions. Blais [31] also wrote that business analysis is all about change, such as business process changes, information system changes or organizational changes.

The BA is responsible for business analysis with professional knowledge and skills. BABOK [17] defines the BA as a person who tries to solve the problems of users and recommends the solution to them. Ruben [33] mentions that a BA manages user requirements, manages the relationship among members, facilitates creative ideas of members, and supports implementations for successful projects at the high level of the organization, within broad areas in information systems development environment.

2.3 Business Analysis Competencies

The IIBA provides a total of 53 performance competencies and 20 underlying competencies through the Business Analysis Competency Model version 3.0 [53] which is based on BABOK version 2.0 and a total of 29 underlying competencies in BABOK version 3.0 [17]. The performance competencies are categorized in six BABOK knowledge areas and the underlying ones are categorized in six competency dimensions. In 2011, Blais [31] mentioned that BAs needs not only abilities, but also the combination of left brain and right brain. That means BAs must have technical knowledge and skills as well as the sense of human relationships to be successful in their role. He provides nine individual business analysis competencies needed for all BAs who have different attributes, such as experience, knowledge, skills, and characters. Davis, in 2013, [37] defined competency as “a set of behaviors providing a guide to identify, evaluate and develop behaviors of employees.” He created a competency model composed of knowledge and skills to improve the possibility of success in work performance. The competency model is composed of domain knowledge and technical knowledge as knowledge competencies, and business skills, technical skills, and soft skills as skills competencies, that is, the ability to apply knowledge. He provides only underlying competencies, as well. Hass [54] describes necessary skills for BAs in each project phase which is based on the Business Solution Life Cycle (BSLC) Model by differentiating skills in the life cycle by soft skills and technical skills. He also provides only underlying competencies. Wiegers [20] mentions that BAs cannot analyze businesses effectively without enough training, guidance, and experience. For effective business analysis, BAs must have competencies in communication, facilitation, interpersonal relationships, business domain, and information technology; therefore, he provides a total of 14 soft skills and 5 knowledge competencies. Jami Cooke [38] argues that most of business analysis education programs are generally based on a waterfall approach rather than an agile approach. He asserts that education programs on business analysis based on the agile approach must be developed, and provides underlying competencies for success in an agile project that focuses on knowledge and skills. Jonasson [32] emphasizes on defining competences in terms of business analysis rather than in term of general skills. He provides two knowledge and five skills as the main underlying competencies for business analysis. Sonteya [55] describes tasks and identifies competencies of business process analysts thorough expert interviews based on the pyramid competency model [56]. He provides underlying competencies of business project analysts, in terms of knowledge, skills, and attitude. Paul [57] mentions that a good BA must recognized the justification of investment to improve business and information technology environment. He provides behavior skills, business knowledge, and techniques as competencies required for business analysis.

Most studies mentioned only individual underlying competencies of input competencies, except for the IIBA’s BA competency model that includes both performance and underlying competencies. It is difficult to set up general and broad tasks in business analysis which are adaptable in all kinds of business domains, industry types, project types, and BA maturity levels, even though the IIBA provides the BABOK guide on business analysis knowledge areas and tasks. Therefore, in this paper will focus on underlying competencies in order to find the relative importance among them. The literature review yielded 6 competency dimensions and 30 competencies, listed in

Table 1 and used in this paper.

Table 1.Business analysis competencies

2.4 Analytical Hierarchy Process

The analytical hierarchy process (AHP), developed in the 1970s by Thomas L. Saaty [58], is a multi-criteria decision-making approach based on mathematics and psychology. The AHP is used to support multiple decision targets, multiple assessment criteria, or mutually exclusive alternatives. For the AHP, the complex situation should be broken down into components (or variables) to build a hierarchical framework, based on which it can measure the weights of importance of each component [59]. The AHP is a systematic approach in which the evaluation of the lower layer can estimate the effect delivered to the upper layer to objectify the subjective judgment of the expert determining a weight based on a pair-wise comparison between the components.

Studies using the AHP generally measure the value of alternatives or their priority. This technique is utilized frequently because it can extract consistent weights of importance or the value of variables using a simple pair-wise comparison [60]. It also allows to integrate different measures into a single and overall weight score for the weights and ranks of BA competencies [58,61]. This approach could be valuable in developing competency criteria for BA selection and development. Many studies use the AHP to underline the importance of competency.

In project management research, the AHP is used for establishing relative importance of competencies for project management officers and information system auditors [62,63]. In the service industry, this method is utilized for the relative importance of competencies of senior management [64]. In manufacturing research, it is used to measure the weights and priorities of technical managers’ competencies, evaluation of suppliers, or procurement performance [65-67]. Monica Hu [68] considers that the impact of competencies that are not considered can be greater than competencies that are considered and impact on work performance from harmful wrong decisions. As such, data analysis about importance and priority of competencies using the AHP is very useful for organizations.

 

3. Research Methodology

The main research method used was an expert interview for data gathering and the AHP for data analysis. To increase the consistency and reliability of the data, they were collected through expert interviews that focused on gathering both quantitative and qualitative data. The former was obtained for measuring relatively importance weights, and the latter for analyzing why the competency is more important than others in total and in each competency dimension.

3.1 Research Participants

In this research, research participants are experts who have sufficient knowledge about information systems development environment. A total of 12 experts were interviewed by the guideline [69,70] that at least 7-8 or more experts must participate. These experts are working at information systems companies or projects for more than 20 years and have business analysis activities. To bridge the gap between stakeholders, six managers and six analysts, and three buyers and three sellers for each manager and analyst are selected.

Table 2 presents the profiles of the experts participating in the interview.

Table 2.Demographic information of participants

3.2 Data Analysis

The analysis of quantitative data is done in 5 steps as per the AHP guideline by Saaty [58].

Step 1: Building a hierarchy framework.

First, we place the objective of this research on the top of the hierarchy. Second, we place the competency dimensions. Finally, we place individual competencies on the level below each competency dimension. Saaty insists that the number of components on each level must be less than nine. Fig. 1 is the final hierarchy framework of business analysis competencies based the AHP analysis.

Fig. 1.Hierarchy framework of business analysis competencies

Step 2: Creating a pair-wise comparison matrix for each competency dimension and each competency

After building the hierarchy framework of business analysis competencies, we create the pair-wise comparison tables for each competency dimension to be used in the expert interviews. A 9-point scale (Table 3) is used to decide the level of the relative importance for pair-wise comparison. For example, if facilitation competency is somewhat more important than leadership, interviewees can mark the box below 3, which is close to the direction of facilitation competency on the response table (Table 4). Subsequently, the result is moved into pair-wise comparison matrix like Table 5.

Table 3.Pair-wise comparison scale

Table 4.Pair-wise comparison response table

Table 5.Pair-wise comparison matrix

Step 3: Calculating the relative importance weight of each competency dimension and each competency.

After creating pair-wise comparison matrixes for each interviewee, the value of relative importance weight is calculated, using eigenvalues and eigenvectors. shows the relative importance weights in two competencies with an example in Step 2.

Table 6.Relative importance weights

Step 4: Validating the consistency of the data gathered.

After calculating the relative importance weight, the consistency of the data gathered from experts must be validated through the consistency ratio formula. Saaty [58] mentions that if the consistency ratio is under 0.1, then it is reasonable and if it is under 0.2, it is acceptable. If the consistency ratio is over 0.2, the interview must be repeated, or another expert selected.

Step 5: Calculating the weight of the overall hierarchy.

After calculating the relative weights of all competencies, the relative weight of each competency is multiplied by the relative weight of each competency dimension. The higher score would indicate that it is a more important competency dimension or competency.

 

4. Research Results and Findings

4.1 BA Competency Dimensions

Table 7 is the results of analyzing the importance of business analysis competencies, using the AHP. The results show that the most important competency dimension is “interaction” with the weight of 0.21523. According to expert interviews, “interaction” is a very important competency, because:

Table 7.Relative weights and ranks of BA competencies

The results show the next important competency dimension is “attitude” with the weight of 0.19349. During interview, many experts said that attitude is a very important competency for BA, because:

4.1.1 Attitude Dimension

The results show that “accountability” competency has the weight of 0.05385, which is the highest in the “attitude” area, and the third in all business analysis competencies, because:

The remaining competencies were important in the following order: “ethic,” “trust,” “time management,” and “change adaptable,” because:

4.1.2 Knowledge Dimension

The results show that “domain knowledge” competency has the weight of 0.03838, which is relatively the highest importance in the “knowledge” area and 11th in all business analysis competencies because:

The remaining competencies were important in the following order: “business acumen,” “organization knowledge,” “solution knowledge,” “methodology knowledge,” and “technology knowledge,” because:

4.1.3 Analysis Dimension

The results show that “root cause analysis” competency has the weight of 0.07299, which is the highest in “analysis” area and the highest in all business analysis competencies, because:

The remaining competencies were important in the following order: “decision making,” “structured analysis,” and “statistics analysis,” because:

4.1.4 Communication Dimension

The results show that “listening” competency has the weight of 0.06684, which is the highest in “communication” area, and the second highest in all business analysis competencies, because:

The remaining competencies were important in the following order: “writing,” “verbal,” and “non-verbal” because:

4.1.5 Interaction Dimension

The results show that “leadership” competency has the weight of 0.05335, which is the highest in “interaction” area and the fourth in all business analysis competencies, because:

The remaining competencies were important in the following order: “conflict resolution,” “relationship management,” “facilitation,” “questioning/ interviewing,” and “teaching,” because:

4.1.6 Thinking Dimension

The results show that “system thinking” competency has the weight of 0.04490, which is the highest weight in “thinking” area and the eight highest in all business analysis competencies, because:

The remaining competencies were analyzed to be important in the order of “conceptual thinking,” “customer experience thinking,” “creative thinking,” and “learning,” because:

4.2 Importance-Perception Gap among Stakeholders

4.2.1 Importance-Perception Gap between Manager and Analyst

Table 8 and Fig. 2 show that there is a difference in the importance weight of business analysis based on the roles of stakeholders. In the group, “knowledge” has a big difference in importance weight between experts whose role is a manager and experts whose role is an analyst. “Knowledge” is the highest for manager, but the lowest for analyst. “Interaction” shows the opposite result. In total, “domain knowledge” has a big difference in importance weight between the role of manager and the role of analyst. It has the highest importance weight for managers, but it has almost the lowest for analysts. “Listening” has also has a big difference in importance weight between roles of manager and analyst. It has the highest importance weight for analyst, but it has almost the lowest for manager.

Table 8.Weights and ranks of BA competencies by stakeholder types

Fig. 2.Importance–perception gaps between manager and analyst

There are some reasons for these results. Experts who perform the role of manager mentioned:

Nevertheless, experts who perform the role of analyst mentioned:

4.2.2 Importance-Perception Gap between Buyer and Seller

Table 8 and Fig. 3 also show that there is a difference in the importance weight of business analysis based on the roles of stakeholders. In the group, “leadership” has a big difference in importance weight between experts whose role is a buyer and experts whose role is a seller. “Interaction” is the highest for buyer, but the lowest for seller. “Attitude” shows the opposite result. In total, “leadership” has a big difference in importance weight between the role of buyer and the role of seller. It has the highest importance weight for buyer, but it has almost the lowest for seller. “Domain knowledge” has also has big difference in importance weight between the roles of buyer and seller. It has the highest importance weight for seller, but it has almost the lowest for buyer.

Fig. 3.Importance–perception gaps between buyer and seller

These results are explained by experts who perform the buyer’s role:

However, experts who perform the role of seller mentioned:

 

5. Conclusion

Research efforts have contributed insignificantly to business analysis competencies in business and information systems development environment. The objective of this research was to contribute to BA selection and development by analyzing the importance weight and priority of business analysis competencies, identifying a total of 30 business analysis competencies from the literature in terms of underlying competencies, such as knowledge, skills, and attitude. It is based on the contributions of the participants who are experts working on business analysis or project management for more than 20 years in Korea. The participants compared business analysis competencies in pairs and then explained the reason why the business analysis competency is very important. The AHP was used for data analysis. Both literature review and data analysis indicate which competencies BA should have, which competencies are high priority, and how big is the importance-perception gap of business analysis competencies between manager and analyst, and between buyer and seller is. The result of this research will support individuals or organizations who want to select or develop BAs who are responsible for analyzing the problem that users have and providing the solutions they want. Generally, BAs cannot have all competencies to do their job. The relative importance weight and the priority of this research must be useful for human resources departments who need to select BAs and education departments or instructors who need to develop business analysis training programs for them.

The overall result shows that “interaction” with stakeholders is a very important competency for BA, rather than business knowledge or IT knowledge. Research and practice show that the main factor of project failure was the communication gap, which impacts uncertainty of project requirements in information systems development. The bigger the communication gap, the higher the requirements uncertainty is. BA needs to reduce the communication gap. Consequently, this study implies that BA must be a bridge between users and developers. This result also validates research on the methods to solve communication problems about project requirements [16,23] and the social relationship between users and analysts to identify early requirements [71].

It is interesting that the importance–perception gap of business analysis competencies among stakeholders was found in this research. The importance–perception gap could be the root cause of the expectation gap occurred between BAs and stakeholders. Most of managers expect that BA must be a problem solver with deep business domain knowledge. However, the opinion of analysts was different from managers. They expect that a BA must be an intermediator with interaction competencies, such as listening, facilitation, and interviewing. Due to the expectation difference about business analysis competencies, the BA role or organization has not been vitalized very well in the organization. This could be the reason that BA job is still unstable in Korea. This research strongly implies that BA must be selected and developed by clear criteria of business analysis competencies. This result also proves the research about the gap between expectation and perceived performance in which with the bigger the gap, user satisfaction will be reduced [16,72].

Without clear criteria for better selection of BA or better performance of business analysis, many BAs are being allocated to the complex information system development projects. However, the objective of hiring or organizing BAs is to meet the organization’s goals and strategies, through successful business oriented information system projects. Even though the results of this study are clear, further research regarding business analysis competencies is necessary. Future research could uncover the co-relationship between the expectation gap of business analysis competencies and the project success or the user satisfaction in business oriented information systems development environment.