standard Corporate Strategy and the Business Analyst

What is your company or client’s strategy? Do you know? Has it been formalized?

Some recent articles I’ve read and training that I’ve received has taught me how important a clearly defined business strategy is to meeting organizational goals. What’s more, it’s now plain to me how important the corporate strategy can be in helping to make business and technology decisions. Here’s a quick and (probably overly) simple example I made up to illustrate the point.

Strategy As a Point of Reference

An internet host has built a strong market presence as a low-price, highly reliable provider. In fact, the “quick and dirty” articulation of their strategy was that they would provide the highest rate of server uptime at the lowest price in the market. Their success was based on their ability to do just that.

They arrived at this strategy as a result of competitive analysis of the market that indicated that they had competitive advantages that could be leveraged to differentiate them from their competitors in the areas of price and reliability. As their clientele grew, they began to think of new ways that they could provide value for their customers to solidify and grow their position in the market.

One idea was that they could provide a service to build simple websites for subscribers that wanted it free of charge. By so doing, they could provide more value to their customers, and potentially tap a new market segment; that of customers that want to go “online” but are not computer savvy.

It seemed like a good enough idea, and many decision-makers were initially in favor. As they discussed further, though, they asked themselves how the idea aligned with their strategy as the low-cost, high-reliability provider. Providing a free service would cost the company man-hours, meaning that to maintain their margins they’d likely have to raise prices and risk their position as the low-cost provider. Providing Website services also did nothing to enhance their image of reliability.

Because the new service didn’t support their corporate strategy, they decided not to take it on.

What if they didn’t have a clear corporate strategy? May the decision have been different?

How is this important to the business analyst?

As a business analyst, it is important to know your company (or client’s) strategy so you can ensure that proposed solutions – IT or otherwise – align with where the company wants to be and how it wants to go about getting there. It’s not always enough that “the customer wants it” or to show potential for quick financial returns to justify a business case. While it would be nice to be able to be all things to all people, that just isn’t realistic in most cases. How does the proposed project support company strategy? Does it at all? If not, should we be doing it?

Those are powerful questions and are sometimes difficult to ask, especially of a Sr. Executive about his pet project that, according to him,is going to “solve world hunger.” As a business analyst, one of the ways we can add value is by asking these types of tough questions. An appeal to corporate strategy is an appeal to the overall company vision. While strategy evolves over time, it likely won’t change rapidly over a short period of time because it is usually structured around getting the most out of the company’s core competencies and differentiators.

As a Business Analyst, we may not necessarily be involved in defining strategy, but we do need to be aware of it, and use it as a reference point when helping business stakeholders make important decisions.

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About the Author

Jonathan Babcock is a management and IT consultant with expertise in business analysis, process optimization and solution delivery methodology. Practical Analyst is his outlet for sharing what he's learned, and for interacting with solution delivery professionals across the globe.

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8 Comments

  1. Jonathan, another great post.

    I recently read a statistic (from an unverified source) that ess than a third of US businesses have a clearly stated mission statement, which is supposed to concisely sum up the busness strategy.

    It’s no wonder that so many bad product choices are made.

    Analysts need to be aware of business strtategy, whether it’s publicly communicated, and whether it is explicitly or implicity there.

    Dig around and you’ll find it.

  2. Thanks Craig, welcome back.

    I’m not sure about the exact percentage myself, but I have heard of similar numbers of companies without clearly defined mission/vision/stratey. I am just now beginning to read up on strategy and how important it is to have one and to use it in business decision making.

  3. Hi Jonathan, Great post.

    I agree we need to align IT projects to business strategy and that the BA not only needs to be aware of this relationship but oftentimes drive this relationship. Even corporations that have a well-stated corporate strategy can have individuals that get caught up in their own agendas and forget to tie things back.

    I'm working on a post that talks about how to discover what the problem really is….because so many times we get lost in conversations about potential solutions while there is an underlying disagreement about the problem itself. I wonder if, in your internet company example, that there was a problem to be solved by free websites and if a different solution to that problem could have fit in with the corporate strategy?

    Best,
    Laura
    http://www.bridging-the-gap.com

  4. I appreciate the feedback, Laura, and I'll look forward to your post discovering the true problems. I have an outline for a similar post that I've just not completely pulled together. It will be interesting to see your take.

    I am with you 100% on problem (cause analysis). I've posted before that if we don't know and agree on the true problem (point of pain) we are trying to alleviate, our projects tend to lose focus and end up all over the board. That, or we'll end up implementing a costly solution that addresses a symptom while leaving the root problem unresolved.

  5. Laura, I look forward to that post. A coworker yesterday mentioned kids learning carpentry and the "wrong nail" problem: instead of the metal nail, they hammer the thumbnail. He says that's a great teacher. "Wrong problem" can be hugely expensive, but not so immediately painful that it makes a great teacher.

  6. Hi Martin,

    Here's a link to the post I mentioned: http://www.bridging-the-gap.com/10-ways-to-discov

    This is definitely not my last word on the subject, but some initial thoughts. I actually experienced, just yesterday, the joy of a problem well-defined. We had spent the last two weeks gathering detailed requirements. A lot of my business owner's preconceptions about the solution changed greatly. We both thought that we were going to have to go back to the sponsor with a very different scope. Alas, we looked at our problem statements and they were essentially unchanged. Our solutions were different, but we were essentially solving the same problem. It was a nice moment. Now back into the details!

    Laura

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