Importance of Business understanding for business analysts

Understanding the business is one of the important qualities of a business analyst. You should know the essential background and foundation of the business you are working with. Having domain knowledge is advancement in the understanding in the field the organization is working. I don’t believe that BAs should be domain experts but if they have an overview of the domain, it can always be helpful in taking critical business decisions. So we can say in talking with business experts the communication skills are not the only requirement, you should also have domain knowledge in order to explain the business terms. You being finance expert would not be able to take decisions in telecom domain but that doesn’t mean you can’t understand the profit-loss definition. Business domain knowledge enables an analyst to be more efficient. While an analyst that is gifted with analysis skills and techniques might be able to do an adequate job without deep business domain knowledge, it’s reasonable to think that an analyst that does have a strong sense of business context should be able to more quickly determine the right questions to ask, and the right approach for handling business challenges.

A lower level to domain knowledge begets subject matter expertise. The type of work done decides the expertise you gain in any stream. A BA with the deep knowledge in any of the business domains and a specific area will be able to pinpoint the nitty-gritties of the business and help in taking the quick and reliable decisions. But I would say that doesn’t mean if you are a generalist you cannot take quick decisions. A debate on being specialist and generalist is never ending and thus depending on the organizational needs and requirements both are valuable.

Business Analyst having business understanding can easily identify the key players in the market and their common elements which they use in their business strategy. If you understand the business you can easily translate the company’s strategy, mission, vision and values. This will certainly help you in taking decisions in the company’s favor and in the long term develops the confidence of the management in you. A basic understanding of business finance is an added advantage.

Now-a-days many organizations are following a new trend of outsourcing the business. This not only results in cost saving solutions but also helps in developing a mix group of experts. Working as a Business analyst in such kind of group is itself a challenging as it requires a special skillset of inter-organization resource management. This is also known as stakeholder management. Thus business knowledge helps in this situation and a business analyst should understand different contractual arrangements which many of the organizations are following these days.

So far we have learnt that having business knowledge helps a BA in one or many ways in his career path. But if you are a newbie to any business domain or organization, in that case you should be cautious and keen to grasp as much as you can in short span of time. Here are few tips in developing business knowledge:

a. Think like a customer or end user or a business user.
b. Act like a business user, like start using the product which the business user is using if it’s already developed or use similar product to enhance your understanding if the product is yet to develop.
c. Develop habit of asking questions; always remember no question is silly till it answered. So don’t hesitate to discuss the pain points with the business experts.
d. Always try to get involved in discussions which will help you in understanding the business terms and jargons.
e. Maintain activity record and try to review those quickly whenever you find spare time.
f. Get yourself invited to meetings, especially those related to requirements.

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