What Is a Business Analyst?

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At its core, business analysis involves looking at data, developing recommendations based on that information and presenting it to the relevant executives or stakeholders. Business analysts operate as the bridge of communication between the IT department and those in the rest of the company. They evaluate the needs of the stakeholders and system users and build realistic recommendations for new or existing systems based on the financial and technical limits of the technology. Business analysts generally have a background in either IT or business administration.

What Is a Business Analyst?

While a business analyst is an increasingly common job title, those in the position often find themselves being asked: "What does a business analyst do?" But while few people understand the term "business analyst," the job itself is fairly self-explanatory. Business analysts use data analytics to analyze processes in a company to improve efficiency. The position is largely summarized as operating as the bridge between the IT department and the rest of the business.

As for what that means in practice, the role of a business analyst may vary greatly depending on the company and the specific process the analyst is working on. Every business has different issues they need an analyst to work on, with a few examples including outdated legacy systems, insufficient security systems, changing technologies or poor customer satisfaction. The analyst will use data analytics to evaluate what is currently happening in the business, what needs to happen and then present data-driven reports and recommendations to the company's executives and stakeholders.

A simple analogy is one that compares a business analyst to an architect. An architect will listen to the needs of his client and use that information to create plans for a home, and then monitor the home being built, making changes to the plans as problems arise during the building process. Similarly, a business analyst will help develop or update a computer system by speaking to the users of the system to understand their needs and then creating a list of requirements for the IT department (or an external supplier) to use to build a new system or modify the existing one. Also like an architect, a business analyst needs to balance what would be ideal with what is practical from both a financial and technical perspective.

Once he has developed his recommendations based on properly prioritizing his list of requirements, the analyst will present his suggestions to the stakeholders for final approval. As the system is built or modified, the analyst will oversee the process to assist with any issues that may arise. Once the new or improved system is complete, he may help support the business in implementing the new system so it can be used as effectively as possible.

Of course, these roles vary based on the project in question. Some business analysts merely develop recommendations before moving on to a new project, while others stay with a project from the beginning to the end. Similarly, some analysts will work on many small projects at a time, while others will work on just one project for years at a time. Some projects are so complex they require multiple business analysts, with each working on a smaller part of the overall project.

A business analyst's role will change over time as they are asked to analyze new technologies and as new tools emerge to analyze data and improve efficiencies. Furthermore, business analysts are starting to be used in departments outside of IT, such as accounting, marketing and operations to help streamline these processes.

Business Analyst Skills

Something many people interested in the career of a business analyst ask is, "What skills are needed for a business analyst?" Because the job requires a careful balance between the tech and administrative side of a business, the position requires some specific skills. A business analyst doesn't have to have a background in IT, but she needs to be able to understand how the systems, products and tools she is evaluating actually work. She needs to be able to look at current technologies and then analyze information on what it needs to do to compile detailed reports and recommendations on how to make it better in the future.

At the core, business analysts must know how to find, analyze and report data trends. They must be able to communicate this information clearly to executives who might not have any background in technology. Business analysts must be proficient in the following:

  • Oral and written communication
  • Analytical thinking
  • Problem-solving
  • Attention to small details
  • Accuracy
  • Organization
  • Understanding of business structures
  • Understanding of networks, databases and other forms of technology
  • Cost/benefit analyses

While not always necessary, it can be beneficial for a business analyst to be skilled at client consultation, diplomacy, stakeholder analyses, building process models, business-case development and leadership.

Becoming a Business Analyst

While there are no specific degrees or credentials a person needs to become a business analyst, it helps to either have a strong background in either business or IT. While you may be able to jump into the field with enough experience and qualifications to be able to fill the role, you can also obtain formal business analyst certification through organizations such as the International Institute of Business Analysis (IIBA), International Qualification Board for Business Analysis (IQBBA), International Requirements Engineering Board (IREB) and Project Management Institute (PMI). While each of these organizations offers their own certification program, the IIBA offers three different certifications; an Entry Certificate in Business Analysis, a Certification of Competency in Business Analysis and a Certified Business Analyst Professional credential – each more advanced than the last. It is worth noting that these organizations do not offer training, but only certify those who already have the required skills to become a business analyst.

Business analyst training can be obtained through informal boot camps that range from a few days to courses that last months at a time. These are available both online and in person. Some are free; some require a monthly or yearly subscription and others involve a one-time fee that could be anywhere from $100-to-$2,500. Some will even offer career guidance or mentorships. Many companies will provide these courses to employees for free to promote new business analysts from within. While you can always include these credentials on your resume, you may also use the skills you learn in these boot camps to obtain a formal certification from an institution.

If you want to prove you are knowledgeable about business analysis and already have either a business or computer science degree, you may consider obtaining a master's degree in the field.

Business Analyst Salary

The number one thing people want to know before considering a career as a business analyst is how much a business analyst makes in a year. The pay of a business analyst will vary depending on what specialty they work in. In general, an entry-level business analyst working in applications development will earn $80,000, while a senior employee in the specialty will receive around $118,000. An entry-level worker in database administration will make $75,000, while a senior in the industry will be paid $115,000. An entry-level quality assurance and testing employee will bring in $61,500, while someone fairly experienced in the role will earn $87,500. In web development, an entry-level analyst will make $81,750 and a senior-level worker will take in $116,500. Security is a particularly lucrative specialty, with new employees earning around $102,000 and experienced employees earning $145,000 a year. Those in technical services and support come in on the low end of the spectrum, with entry-level employees getting around $60,500 a year and advanced workers in the specialty collecting around $86,500.

Business Analysis Tools

The tools used by business analysts will vary based on the analyst, the company they are working for and the type of project they are working on. That being said, they almost all rely on a number of the following software programs: Microsoft Excel, Microsoft PowerPoint, Microsoft Access, SQL, Google Analytics and Tableau.

These different tools can help the analysts collect, sort and analyze data, which they will then use to create graphs, documents and other visualizations to explain their findings to the stakeholders and executives they report to. A background in IT may help with collecting and analyzing the data, while a background in business and business tools can be particularly helpful when it comes to presenting the findings from the data.

History of Business Analysts

In the 1970s and 1980s, as companies began converting from paper-based data storage and accounting methods to electronic systems, system analysts began popping up to help document the manual, paper-based systems, analyze new business requirements and automate the processes with new, computerized systems. They also needed to help identify problems in the conversion process and modify the systems to fix the problems as they arose. While the systems analysts were expensive to work with as they were specialists in a new field, the conversion from slow, manual processes to automated computer systems resulted in dramatic increases in efficiency and accuracy, helping businesses save massive amounts of money.

In the late 1980s and the 1990s, many companies improved their IT systems to be even more efficient and high-powered, but many projects ended up as disappointments because those working on the systems focused more on the technology than on the actual needs of those using the system. This is when the role of business analyst first arose. These specialists needed to have a deeper understanding of the business and how improving technologies could be used to help a company. The business analyst served as a much-needed intermediary between the IT department and the stakeholders, balancing conflicts between the business's needs and its often limited IT resources.

In the new millennium, the increasing popularity of the internet placed all-new importance on IT professionals both in companies serving the public with technology services and with companies working to improve their technologies internally. As organizations developed even more complex IT infrastructures, often with hundreds or thousands of different systems being used in countries over the globe, business analysts became even more important in balancing the abilities of technology with the needs of the user.

As the need for business analysts increased, so did the variety of work they did. Some analysts specialized in databases, others in security systems, others in technical support. A select group of business analysts are tasked with ensuring a company's technologies are all compliant with local, federal and international laws. It is increasingly rare to see "business analyst" as a simple job title because of these specializations. Instead, the title generally serves as a catch-all for many roles that involve balancing information technology and business needs.

Some companies now hire so many business analysts for different projects that they also end up requiring a project manager to work with the analysts or even whole teams of analysts.


About the Author

Jill Harness is a writer from San Diego with 10 years of experience working on some of the top blogs online. While she has written on a wide variety of topics, she specializes in SEO-driven legal content. More information her career can be found on her website, JillHarness.com