PMI-PBA® Certification Domain 1: Needs Assessment

In the first article of the PMI-PBA® Certification series, I introduced you to the five domains recognized by PMI® – Needs Assessment, Planning, Elicitation and Analysis, Traceability and Monitoring and Evaluation.

In this week edition I will try to explain and provide details regarding the first business analysis domain – Needs Assessment.

So when does Business Analysis start in a project? With the project kick-off meeting, with the stakeholder identification or with the definition of the project scope?

The correct answer to this question is – a lot earlier than the actual project starts. Business analysis starts with identifying business problem or opportunity.

A needs assessment is not necessarily mandated by a project management or business analysis methodology – it can either be requested by the business or recommended by the business analyst himself. The main purpose of this domain is to let the business analyst understand in details the business problem or opportunity and make sure the right problem is solved by the upcoming project. Skipping needs assessment often leads to a completed project with budget and scope, but which no one uses i.e. a project that is not valuable or did not satisfy the original business need.

In order to identify a problem or opportunity, a business analyst must get an understanding of the current environment, gather information from the right stakeholders and further analyze it. So the first step in this process is to identify stakeholders that may affect, be affected by, or perceive itself to be affected by any aspect of the project.

Next, the business analyst may conduct interviews with these stakeholders, review existing documentation or use other technique in order to learn enough about the problem or opportunity. Once a broad understanding of the situation is obtained, the business analyst must start gathering detailed data so that he can “size up” the situation.

In order to be sure the definition of the business case is correct, the business analyst must first prepare a situation statement, which represents documentation of the current problem that needs to be solved or opportunity to be explored, and obtain stakeholders approval before proceeding with any work.

Next the business analyst must assess or help in defining the organizational goals and objectives. It is important to make sure the goals and objectives follow the SMART model i.e. they are specific, measurable, achievable, relevant and time-bound. In this process, the business analyst may use SWOT (standing for strengths, weaknesses, opportunities, and threats) analysis, relevant criteria or other techniques of his knowledge and choice.

As soon as the problem to be solved/ opportunity is defined and the organizational goals and objectives are clearly defined, the business analyst must perform further analysis and break it down into its root causes or opportunity contributors. Using techniques such as “Five Whys”, cause and effect, interrelationship diagrams or process flow diagrams, the business analyst can gain deep understanding for the situation and recommend the most viable and appropriate solution.

So the problem/ opportunity is defined and its root causes are identified – how do you know what steps to take in order to provide the best solution? Well one tool that can facilitate this decision, is a capability table, where you identify the current limitations of the organization, their root causes and the new desired capabilities. Then perform capability gap analysis and define the steps (main recommended option plus alternatives) that can lead the organization from where it is now, to where it has to be. Each option must be supported by the corresponding risks, constraints and assumptions and with assessment of its feasibility.

The last and most important task in the needs assessment domain is the preparation of the business case. Its formality depends on the industry, project framework and other work specifics, but in general it should contain:

  • Definition of the problem or the opportunity
  • Analysis of the situation
  • Provided list with options, with emphasis on the recommended option
  • Metrics to evaluate how the solution contributes to goals and objectives

Later, when a project or program is approved, the business case will serve as input to the project charter and/or similar document.

In the next article from the PMI-PBA® Certification series I will uncover details around the Planning domain, the activities it comprises and how to effectively perform business analysis planning tasks, so that you set the right path, minimize “surprises” and let your analysis go smoothly and produce the desired deliverables.

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PMI-PBA is a registered mark of the Project Management Institute, Inc.

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