Business Analysis Guidebook/Analytical Thinking and Problem Solving

From Wikibooks, open books for an open world
Jump to: navigation, search

Analytical Thinking and Problem Solving[edit]

Underlying Competencies[edit]



Make Judgements on a Solution[edit]

Decision Making[edit]

EDIT NOTE: Add graphic for Decision Making

Arriving to decisions can be a daunting task because it involves many factors. One needs to understand that a high quality decision comes with a warrant: Not a guarantee of a certain outcome. But with good decision making tools we have a warranty that the process we used to arrive at a choice was a good one. As a Business Analyst you need to make sure that you take a systematic approach towards decision making. Some guidelines are:

  • Create a Constructive Environment

It is important to create a constructive environment so that right people are involved in the decision making process. Also this makes sure that team members and stake holders don’t hesitate to participate.

  • Generate Good Alternatives

Once you create constructive environment, conduct sessions of brainstorming. At this stage it is important not to discard any point of view and give equal importance to each idea. You can also have written ideas in short surveys from the team. This gives chance to quieter people to voice their opinion. Once ideas are generated – organize ideas with common theme in affinity groups category.

  • Look at High-Risk Consequences

In some cases the impact of the decision may be significant. Analyze the consequences of each decision and look at its implications. In some cases it might be high on budget; some decision might require more people. Compare the decisions based on the available resources and constraints.

  • Consider Interpersonal Issues

It can be difficult to predict how other people will react to the decision you make but at the same time it is important to understand the people acceptance on the implication of your decision

  • Choose the Best Alternative

There are various tools available to help you with choosing the best alternative out of the available options. Please see the tools sections to refer to them.

  • Check Your Decision

Make sure you save a session for checking all the assumptions and methods you used to arrive at the decision

  • Communicate Your Decision, and Take Action

Once you have arrived at your decision, make sure you communicate it effectively to all the stake holders and involved parties. Let them know why you choose this decision and what expected impact and involved risks are. And importantly what projected benefits are. People involvement is the key to implementation. And last but most important thing is “act on your decision”.

Various Techniques for Decision Making[edit]

Few of the available methodologies are outlined below:

1. Grid Analysis Methodology

Grid Analysis is a particularly powerful tool for decision making where you have a number of good alternatives to choose from and when you have many different factors to take into account. Grid Analysis is the simplest form of Multiple Criteria Decision Analysis (MCDA)

How to Use the Tool As the name conveys, we need to make a Grid. Grid is comprised of options we have available and factors which affect our decision making.

Step 1

On the table list all of your ‘options’ as the row labels, and list the ‘governing factors’ as the column headings. For example, if you were going for a vacation, factors to consider might be cost of flight, cost of hotel, distance, activities, Quality and safety.

Step 2

Work your way down the columns of your table, scoring each option for each of the factors in your decision. Score each option from 0 (poor) to 5 (very good). Note that each score is independent of each other, so you do not have to have a different score for each option – if none of them are good for a particular factor in your decision, then all options should score 0

Step 3

The next step is to work out the relative importance of the factors in your decision. Show these as numbers from, say, 0 to 5, where 0 means that the factor is absolutely unimportant in the final decision, and 5 means that it is very important. Again, since many factors can have same importance, it’s not required to score it differently

Step 4

To get weighted scores for each options multiply each of your scores from step 2 by the values for relative importance of the factor that you calculated in step 3.

Step 5

Add up these weighted scores for each of your options. The option that scores the highest is the best suited option. Example: Say you have a situation where you are trying to decide the best vacation destination from the various options available to you.

In this case say the factors that you want to consider are:

Cost of travel, quality, distance, cost of hotel, activities and safety

Destination options are Hawaii, Disney, Vegas, and Maine

Grid 1 with options and factors and score for each factor

Factors Travel Cost Quality Distance Cost of Stay Activities Safety Total
Weights 4 2 1 4 4 2
Hawaii 1 3 1 3 4 3
Disney 1 3 1 3 4 3
Vegas 3 3 2 3 2 2
Maine 4 4 2 2 0 4

Next is to decide the relative weight for each factor and multiply these by the scores already entered and total them each.

Grid 2:

Factors Travel Cost Quality Distance Cost of Stay Activities Safety Total
Weights 4 2 1 4 4 2
Hawaii 4 6 1 12 16 6 45
Disney 4 8 2 8 20 8 50
Vegas 12 6 2 12 8 4 44
Maine 16 8 2 8 0 8 42

As evident by the grid results, Disney comes out as the winner!!

2. T-Chart Technique A T-Chart in the simplest form can be understood as a listing of positives and negatives surrounding a particular choice. Drawing up such a chart insures that both the positive and negative aspects of each direction or decision will be taken into account. For example, what are the pros and cons of deciding to hire more employees?

Faster Code Development Higher Expenses
Less Reliability on 1 person Less Accountability
Expertise of Ideas People Management Issues

3. PMI Technique T Chart method could be extended to include the aspects of decision which are outside the present context of judgment. Edward de Bono named it as PMI method for plus, minus, and interesting. In this method, you list all the good points of the idea, then all the bad points, and finally all the interesting points which include areas of curiosity or uncertainty, or attributes that you simply don't care to view as either good or bad at this point. For example, consequences that some people/or some situations might view as good and others might view as bad

Problem Solving[edit]

Problems are only opportunities in work clothes." – Henry Kaiser

EDIT NOTE: Add graphic re: problem solving

As a BA you are often solving a problem for a client (internal or external), supporting those who are solving problems, or discovering new problems to solve. Therefore, it's useful to get used to an organized approach to problem solving and decision making. Here are some guidelines to get you started. After you've practiced them a few times, they'll become second nature to you -- enough that you can deepen and enrich them to suit your own needs and nature.

Steps for Effective Problem Solving:[edit]

Clear Problem Definition: It’s very important to have a precise, clear problem definition before starting any other work. Understand the issue first and then jump into solution mode. Challenge the definition from all angles: The more ways you can define a problem, the more likely it is that you will find the best solution. For example, “sales are too low” may mean strong competitors, ineffective advertising, or a poor sales process. Identify root cause: This is all about finding the root cause, rather than treating a symptom. If you don’t get to the root, the problem will likely recur, perhaps with different symptoms. Don’t waste time re-solving the same problem.

Approach with Multiple Solutions: The more possible solutions you develop, the more likely you will come up with the right one. The quality of the solution seems to be in direct proportion to the quantity of solutions considered in problem solving. Prioritize: Of all the available solutions, some might be more complex demanding more money or more time. You need to prioritize your solution based on its balance on short and long term impact.

Make a Decision: Once problem has been identified and solutions, you need to select one solution and act on it. The more you put off on deciding your best solution, the higher the cost and larger the impact of problem becomes. Best practice is to set a deadline for making a decision and course of action.

Identify Responsible People and Delegate: Wits important to identify resources to carry on the task and make them responsible for different elements. Problem solving always needs multiple heads and hands working together.

Define Objective Measures of Success: In a long term and complex problem solving it is easy to get sidetracked. Set defined measurements and test for measurements of completion.

Techniques /Tools for Problem Solving:[edit]

5 Whys Tool Made popular in the 1970s by the Toyota Production System, the 5 Whys is a simple problem-solving technique that helps you to get to the root of a problem quickly.

How to Use the Tool:

When you're looking to solve a problem, start at the end result and work backward (toward the root cause), continually asking: "Why?" You'll need to repeat this over and over until the root cause of the problem becomes apparent.

Example: In this example, the problem is that your Business Unit is unhappy. Using the 5 Whys, you go through the following steps to get to the cause of the problem:

1. Why is our Business Unit unhappy? Because developers didn't deliver the services, when they said they would.

2. Why were developers unable to meet the agreed-upon timeline or schedule for delivery? The job took much longer than we thought it would.

3. Why did it take so much longer? Because developers underestimated the complexity of the job.

4. Why did we underestimate the complexity of the job? Because developers are not so experienced and are running short on staff

Solution/Conclusion: need to have more experienced developers / Need to hire more developers / divide work load evenly and have realistic time estimates

Benefits of the 5 Whys include:

  • It helps you to quickly determine the root cause of a problem.
  • It's simple, and easy to learn and apply.

2. Constructive Controversy:

Involving other people – who inevitably have different perspectives and views – helps us ensure that we've considered solutions from all possible sides. This problem-solving approach was introduced by David Johnson and Roger Johnson in 1979.This has been recognized as a leading model for problem solving by Arguing For and Against Your Options

How to do it:

  • You need to facilitate meetings where people come and give constructive criticism to identified solutions
  • For all rounded approach it's important to understand that people agree to disagree gracefully. It’s not about “winning” but rather it’s an approach to improve collective understanding.
  • Listen actively, and ask for clarification when necessary
  • Commit to understanding all sides of an issue.