Is Outsourcing Business Analysis a Bad Idea?

A couple of years ago, I attempted a poem entitled To Be a BA or to Buy a BA. Of course, just to make the question sound challenging, I — in my infinite geekdom — plagiarized Will Shakespeare’s “To Be or Not To Be” throughout the entire article. Everyone not being a Shakespeare fan, the article did not set the BA community ablaze. I can’t understand why not.

At any rate, based on several articles, blogs, and tweets that I have read lately, the topic seems to be more mainstream this year. (Couldn’t have anything to do with the modest state of the world economy, could it?) The general tenor of this research is that business analysis is not a function that you should outsource. As the title of this article suggests, I propose that outsourcing business analysis is a viable option if the conditions are right. If the conditions are not given, however, it can become the ultimate show–stopper for an organization.

For example, in a CIO New Zealand article (don’t you just love the WWW — Wonderful World of the Web — for research?) from March of this year entitled “Cutting the wrong employees can kill a business", Bruce McCracken notes that "organisations should closely examine their business and make cuts selectively or outsource with an eye to the future". Further, he quotes Jennifer Daniell Belissent, Ph.D. from Forrester who makes the point that "Organisations were giving away the whole core of traditional IT keystone skills; project management, business analysis/requirements management¹, technology/architecture, quality assurance." Jennifer also maintains, "Expertise needs to be within your company so that when you want to expand, that expertise is in-house." In addition, McCracken states that "Companies need to envision where they want to be globally in the future and align their internal IT management to reaching business objectives in the most optimal way."

O.K., enough of the quotes from that article, already. If you are as intrigued as I hope you are, I recommend that you read the whole thing and don’t rely solely on my extract (the title is, in the best tradition of modern e-journalism, hyperlinked). I do, however, quote quotes of other people’s quotes with a purpose (unusual for me, admittedly, but then again . . .). Please bear with me.

Augmenting Arguments

In an article from CBR (Computer Business Review) titled "Consultant warns on lift-and-shift application outsourcing", published in April, 2009, Kevin White observes, "operations where the full life cycle of application development has been outsourced have shown productivity drops of up 60% as poor knowledge of the business function affects efficiency of the development." Later in that article, Nigel Hughes of Compass is quoted, "It is important to outsource the right type of development project and ensure that business analysis skills are kept in-house in order to make any savings. The loss of functional expertise — people who understand the business function the software is supporting — has a negative effect on the productivity of application development."  

Finally, in his blog "BraveWorld: SET for Success" in June, 2009, Richard Lannon supports these opinions in his answer to "Do you think based on your understanding and experience of business analysis/IT, can a BA position be shipped offshore?" Interestingly, Richard distinguishes between "business business analysts" and "technical business analysts" and argues that although it is O.K. to outsource the latter, the earlier have to be kept in-house (presumably on a short leash?).

Could Outsourcing Business Analysis Be Right for You?

I acknowledge that these folks all have a legitimate basis for their stand. They may, however, be throwing the baby out with the bath water. IMNHO (in my not-so-humble opinion), the task of business analysis is an excellent candidate for outsourcing — assuming it is done correctly. To explain my stand, however, we need to agree on just what business analysis really is.

According to the International Institute of Business Analysis (IIBA — the emergent organization defining this emerging profession), business analysis involves ". . . understanding how organizations function. . ." and ". . . defining the capabilities an organization requires. . .". Business analysts are defined as any person who performs business analysis activities, no matter what their job title or organizational role may be (in Shakespearean, a business analyst by any other name would analyze the same). To perform these duties, they need to have some level of proficiency in about 50 different techniques ranging from "simple" concepts like effective brainstorming to the more esoteric "business rules analysis" — whatever that is.

A Divergent Perspective

Based on that definition, I’m going to go out on a limb here. The error those organizations made was not that they outsourced the business analysis function. It was that they outsourced it to organizations who were more interested in delivering a solution than in analyzing the business. The fallacy lies in the premise that business analysis is an IT function. It is not.

Let me repeat that. In its heart, business analysis is not an IT function. The goal of business analysis is to define the requirements that any technology solution has to meet to deliver what the business community needs. The job of business analysis is done when the requirements for the solution have been defined. That task needs to be done by people qualified to do business analysis. To be done best, it should be done by people who do not profit or in any way benefit from implementing a particular solution. Any solution that meets the requirements that the business analysts define should be acceptable to them. The job of business analyst should be — and is, as defined by the IIBA — to define the solution, not to deliver it.

A Different Can of Worms

If you accept my premise that business analysis is a critical activity that is best done by people qualified to do business analysis, the real issue now becomes whether it makes more sense for your organization to hire and train people in-house in your way of thinking or to find the best and brightest external (or, as I call people like me, out-house) consultants to bring in fresh perspectives. Either approach can be successful, if, like anything else, it is done right. The bottom line is if you want to successfully outsource the business analysis function, pay someone to do the analysis and define the requirements — and find a different organization to implement the solution that meets the requirements.

In my mind, the question is not whether to outsource the business analysis activity or not. The real question that organizations need to be asking is how they can get the best results from business analysis. Whether it be more profitable in the minds of management to pay the piper to hone internal business analyst skills or to accept the findings of external experts who benefit not from their own findings, that is the question. (Pardon my regressing into Shakespeare — I can’t seem to shake the habit). To translate this into 21st century business speak, there is no right or wrong answer. Every situation is unique and requires its own solution. That is what makes management so exciting, isn’t’ it?

¹All bolding and italicizing in the quoted articles are mine, not the original authors.