A persistent challenge in managing outsourcing relationships is the transition from being active participants in a project to becoming remote managers of a global sourcing initiative. Business-analysis skills can readily be applied to smoothen this transition and minimize project failure rates for global organizations.
As corporate interest in global outsourcing continues to increase, a study by KPMG entitled Strategic Evolution shows that 72 percent of outsourcing organizations do not have a defined list of criteria to measure the success or failure of a sourcing arrangement. In addition, the study found that 60 percent of customers and 59 percent of service providers believe that a majority of sourcing problems are related to people involved in managing the project, as opposed to an estimated 10 percent who think problems in sourcing contracts are technology related.
Given this perception that people are the problem, it is imperative for organizations to re-evaluate the skill set of sourcing managers and incorporate business-analysis competencies into the equation.
Business Analysis Competencies for Sourcing
At all stages of the sourcing life-cycle — from the research and strategy phases through evaluation and selection, and on to procurement and management — various business-analysis proficiencies can impact sourcing results. In simple words, the business analyst acts as a translator or liaison between the customer and the IT group attempting to meet the customer’s needs.
Some key business analyst competencies that can be applied to sourcing management are:
- Eliciting requirements and creating the Business Requirements Document (BRD): A key function of the business analyst is to gather and document the user requirements needed to solve a particular business problem or achieve a business activity. From these requirements, the business analyst generates an exhaustive study of the regulatory, business, user and functional requirements.
- Structured analysis: Business analysts employ the art of modeling to support and enhance text-based requirements by organizing information into coherent ideas. The use of business-analysis models such as business models, process models, data models and workflow models can all be applied to sourcing management.
- Testing and end-user support: Business analysts develop test scripts, test plans and test scenarios to determine whether the requirements have been met and desired deliverables achieved. When the deliverable is met, the business analyst’s command of the requirements can complement the training team in developing user-support tools, including training manuals and reference materials.
To explain the role of business analyst in simple terms, a custom home construction analogy is useful. First, there is an internal (in this case family) dialogue and assessment of needs. How many bathrooms would be adequate? Should it be a two-level or three-level home? What is the square footage? Then those “requirements” are presented to an architect who will design the house. Next, an attorney will translate those schematics into a contract, ensuring that all requirements are spelled out. Finally, that contract is delivered to a builder, or general contractor, who will supervise the construction of the house. Anyone who’s ever embarked on such a project will know it’s not simple. The same can be said of a business analyst’s role in sourcing management.
Pitfalls of Mistaken Identity
To find success by incorporating the expertise of business analysts in the outsourcing process, organizations must first draw clear lines between the roles of project management and business analysis.
An increasing number of project managers are becoming victims of “mistaken identity” within their
organizations. Project managers are assuming roles typically reserved for business analysts, and business analysts are accepting responsibility for items that should fall under the project manager’s purview.
These instances of mistaken identity can impact project success. Failure to delineate specific roles for project managers versus business analysts will result in redundancies, inefficiencies, increased risk, costs and scheduling overruns.
As a consequence, this inaccurate allocation of resources is resulting in diminished returns on outsourcing investments. When the wrong people are assigned the wrong tasks on a project, risk increases dramatically. When project risk increases, schedules are not met, costs spin out of control, exponentially diminishing the quality of the deliverable.
