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What is a business analyst? (3 Types You Didn’t Know About)

A few Google searches show that there’s significant misunderstanding of the business analyst (BA) role. Some claim BAs work on internal processes (such as a supply chain), while others claim BAs are translators between business needs and technical ability (usually in product development). This split lets wonder what a business analyst really is — what its meaning is.

In short, a business analyst is an employee that uses an analytical approach to effect change that brings value to the organization. Instead of one role, business analyst is an umbrella term for 3 different types:

  • Process analysis BAs – focusing on internal processes
  • Product development BAs – focusing on developing new products
  • Project management BAs – focusing on managing one of the above processes

All three share some common characteristics, but they each have a special purpose in the organization. Each one brings unique value, and more importantly, most BAs can alternate between types, as long as they have core BA skills and data fundamentals. Let’s look at each of these in more detail to better understand what a business analyst is.

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Three types of business analyst: process analysis, product development, & project management

Process analyst BA

A process analyst focuses his/her efforts on understanding a company’s internal processes and improving them. This is usually what people refer to when they say “business analyst.”

A process analyst collects information and outlines the steps a company uses to achieve business goals. These processes can be as simple as sorting the mail or as complicated as delivering packages in arctic environments. The process analyst BA is all about internal procedures.

The process analyst then needs to make suggestions about how to improve current functions. To do so, s/he must collect requirements from stakeholders in the workflow, then propose changes. This is the famous requirement elicitation common to all business analysts.

Product development BA

By contrast, product development BAs work in the branch of the company that builds new products, making it outward-focused. In my experience, these product development BAs are most common in digital companies.

A product development BA is the king of requirement elicitation, and he/she coordinates with a host of stakeholders from all tiers of the organization in order to outline the functional and non functional requirements of a new product.

Functional requirements are behaviors that the product must perform. For example, a website must be accessible via the internet.

Non functional requirements are measurable goals that the product must achieve. For example, a website must have 10,000 views per day.

Product development BAs are all about understanding the needs of the end user. They must identify those needs with the input provided from stakeholders and convince everyone involved of the best course of action. In this way, product development BAs are intra-company entrepreneurs.

Project management BAs

Sometimes, business analysts find themselves in a situation where they need to project manage rather than delve into the details. It’s easy to see why. Since BAs often focus on identifying the end user and putting in place the steps to fulfill his/her needs, there’s a naturally propensity for project management.

Project management BAs are rarely hired with the intent they manage. Instead, they often fall into the role alongside a product owner in agile companies.

Project management BAs are all about clear communication. They will spend hours making sure they understand all points of view, just to ensure they can convince each stakeholder to align on priorities. In this way, project management BAs often become leaders in the organization.

Be aware – companies mistakenly group the 3 together

While different types of BAs exist, most companies and hiring managers do not realize it. Most of the time, a hiring manger has become familiar with one kind of BA, and they believe their conception is the only one. Don’t be surprised if you find people grouping them together.

Table summary of the 3 types of business analyst

Process Analysis BAProduct Development BAProject Management BA
Requirement elicitationYesYesYes
Decision makingSometimesYesYes
Internally focused?YesNoYes
Externally focused?NoYesYes
# of StakeholdersMediumMediumHigh
ResponsibilityLowMediumHigh
Stress levelMediumMediumHigh
Table summary of the 3 types of business analyst

What does a business analyst do?

The actually tasks that a business analyst performs are outside the scope of this article. They’re super interesting, which is why I dedicated an entire article specifically to tasks. You should check it out if that’s what you’re looking for.

Business analyst job description (common to all three types)

Because companies often don’t know the different types of BA, different job descriptions for the same role can be quite unalike . However, some descriptors are common to all three types. Here’s a list of thing all business analysts do:

  • Conducting meetings and presentations to share ideas
  • Performing requirement analysis
  • Documenting and communicating results
  • Communicating effectively with cross-functional teammates
  • Allocating resources and maintaining cost efficiency
  • Manage competing priorities
  • Identify problems
  • Find solutions

If you search for business analyst job descriptions, you’ll find these descriptors on most pages. But they’re not very helpful, are they? It seems like these tasks are common to almost any corporate job!

That’s why we need to instead look at each type of business analyst job description. Companies that really understand the role of the BA will include more specific information. Process analyst BA job descriptions will differ from product development BA descriptions, which will themselves differ from project management BA descriptions.

Process Analyst BA Job Description

The process analyst branch of business analysis focuses on improving internal functions in the company. A good process analyst BA must excel at:

  • Creating detailed process analysis documentation
  • Performing regular requirement analysis with relevant stakeholders
  • Collecting data on processes
  • Analyzing data on processes
  • Researching processes in competitor companies
  • Communicating project shortcomings at different points in the hierarchy
  • Financial modeling to see how changes in process will impact cost centers and the overall health of the company
  • Analyzing variance between expected results and actual results to determine what went wrong

Process analyst stakeholders

One of the key differences between the three types of BAs is the stakeholders with whom they work. There’s usually an identifiable hierarchy for each position in the company, and stakeholders help us understand where each BA type fits in an organization. The highest member above a process analyst is the Chief Operating Officer, or COO.

Process analysts also need to understand their department manager, front-line workers, and the any technical members of the team. A process analyst BA can ONLY do his/her job once all of these stakeholders have contributed to the project. If not, his/her analysis is incomplete and inconclusive. I should note that these are the base of people, and any good analyst knows that stakeholders can be a numerous as there are departments in the company.

Again, the minimum stakeholders a process analyst BA must consult are:

  • COO
  • Department manager
  • Front-line operationalists
  • Technical specialists

Example project description: process analyst BA

Imagine you work for a a shoe manufacturing company as a process analyst BA. You’ve just been hired into the production line division, and your hiring manager is encouraging you get your hands dirty right away by proposing a way to improve output efficiency of shoes — more shoes in the same amount of time.

At the very least, you need to have an idea of the vision the company’s COO has for productivity. More often than not, this will come in the form of a departmental budget. Your hiring manager refers you to the production line manager for details.

The production line manager says you’re limited to $100,000 in start up costs, and the new process should make that money back within the first 3 years. He also says that the production line cannot change in length, only in makeup.

You approach some of the assembly line workers to understand better how the process works for them. They complain a lot about the pain they get in their shoulders from reaching for shoelaces, and they explain further how the conveyor belt carrying shoes-in-the-making requires regular slow periods since rubber from soles guts lodged under it.

You think you have a way of improving the assembly line, and it’s an easy fix. You approach the technical specialists to better understand how to use raised rollers in order to leave space under the conveyor belt. This would remove the need to slow down the belt for rubber removal. The tech specialist tells you that they have tried this, but they would need a new motor to manage additional friction.

How much would the motor cost? $9,000. Jackpot – you found your solution.

Product Development BA Job Description

The product development BA focuses on creating new products or services for market. It differs from process analysis in that it focuses externally, not internally. Product development BAs must be highly capable in:

  • Analyzing quantitative and qualitative data analysis to understand needs in the market.
  • Understanding the results from focus groups
  • Communicating with product development stakeholders to gather requirements
  • Making decisions about product priorities based on knowledge of
  • Translating requirements from business teams to technical teams and vice versa
  • Making decisions about product functions given input form other teams

Product development stakeholders

Product development stakeholders include a smaller range of positions in the company. This is because departments building new products usually operate more independently than internal operations. Stakeholders include:

  • Product owner
  • Lead developer/production manager
  • Designers
  • Above all: customers!

Example project description: product development BA

Imagine you work for a data software company that builds label-making software. Your company sells to all the big names in plastic and tin-foil labelling, but they have no presence in labelling tin cans. Your company doesn’t sell any machines — just the software that labelling companies use.

Your boss has just come to you asking you to help the team get tin can labelling software to market! You’re excited to get going on it. In this process, you’ll be collecting the famous functional and non-functional requirements that ultimately make up the end product.

You start by approaching the product owner to ask what she thinks the product needs. She tells you that it needs to be a lightweight, add-on solution that the company can cross-sell to existing customers. This is not what you were expecting — most tin-can labelers have exclusive contracts with Coke or Pepsi (disclaimer: I have no knowledge of the soda labelling business and this example is for expository purposes only). But you take this down as a functional requirement.

Then you speak with the Lead Developer to find out what he sees as necessity. The lead developer explains that he has already heard the new product will be an cross-seller, and he explains that the company will need to schedule a product-wide update in order to make it compatible with the new product.

You then speak with the designers. They explain that the platform they use to build the design is highly flexible, and they will only need a week to draft proposals.

Finally, you set up a survey for 10 of the company’s medium customers to better understand how tin-can labelling add-on software would help them. They complete the surveys and you run some simple descriptive analysis on it. It turns out that your hunch from earlier was wrong — all of the customers want to get into tin-can labelling!

You then draft initial functional and non-functional requirement documentation and build initial wireframes that the designers will use to propose their solutions.

Project Management BA Job Description

The project management BA is a sort-of hybrid BA, and it often occurs in companies who mistakenly assume they need a business analyst when they really need a project manager. However, this is not necessarily a bad thing. Business analysts typically have the technical and planning skills to be high-performing project managers. A job description for project management BAs could include:

  • Understanding requirements
  • Communicating nuanced requirements to disparate teams
  • Planning how to implement the different requirements given time, funding, and workforce availability
  • Deciding to remove toxic team members or add needed skills
  • Knowing when to add another business analyst (process or product development) when managing and performing becomes too much work

An obvious question here might be “is it possible to perform both the BA and project manager role?” The answer is of course it is possible, and in some cases its an effective cost-saving rule. But there’s a rule of thumb for when it’s not smart: if you cannot envision completing your BA documentation on time, then you should not take on both roles

Project management stakeholders

Stakeholder for project management BAs are the most intensive. This is because project managers not only have to communicate with operational personnel, but also often with C-level managers. A list of their stakeholders is:

  • CEO
  • COO
  • CFO
  • Department manager
  • Lead developer/production manager
  • Developers
  • Other Business Analysts
  • Technial specialists
  • Above all: customers!

Example project description: project management BA

Imagine you’ve just been hired as a senior BA in a hardware company that builds hard drive memory discs. You originally joined in order to add value a product development team working with new memory technology. However, it quickly became clear that this new department was missing a strong leader.

After a few weeks of speaking with you during requirement elicitation meetings, the CEO asks you to step in to a project management role alongside your BA role. After all, you seem to understand all the steps needed to get the project to market! And you have an astute appreciation for listening to customers.

The product you need to get to market is still in testing. You speak to the COO and CFO to understand their vision for how this small, quick hard drive fits into the company product portfolio. They tell you that it’s the future. Most of the company’s clients are downsizing, so the company’s products must too.

The department manager says that the CFO’s and COO’s vision is accurate, but that there are some nuances in the client portfolio. If fact, you will need two different products, both of them smaller than the current product. Only one will be a 2.5 inch disc, and the other a 4 inch disc.

You then speak with the production manager, who concurs that the 2.5 inch and 4 inch discs are necessary. He then explains that in order to make them, his team will need to hire nano-engraving specialists. You agree.

Finally, you write out a plan for how the production teams will source their engraving specialists, how you will work with procurement to get the raw materials for the discs, and how you will prepare mockups and wireframes for the products.

Then you stop because you’re feeling a bit overwhelmed. You realize that you will need to hire an additional BA to help you with the mockups.

Can you see how the project management BA is only slightly different than the process analysis and product development BAs? There is a tier of responsibility added that really changes the role.

Business Analyst Qualifications

Traditionally, business analysts fall into the tech field. This means that degrees are less important than experience. With that said, certain experiences will give you a leg up when it comes to applying for positions.

Here are qualifications that business analysts usually have:

  • A bachelors degree of some kind, not necessarily in business analysis
  • A portfolio of data analysis work
  • Work experience in a process-heavy job (it’s not the first thing that comes to mind, but even administrative employees such as secretaries make great business analysts

Take a look at this table to see specific qualifications each type of business analyst usually has at the junior level:

Process analysis BAProduct development BAProject management BA
Bachelor’s degreeBachelor’s degreeBachelor’s degree
Internship in an operational roleLeadership experienceLeadership experience
Demonstrative record of analytical ability, often as a portfolioDemonstrative record of working with peopleDemonstrative record of working with people
Record of conflict resolutionRecord of time managementRecord of time management
Record of priority managementRecord of priority management
Data table of Qualifications for the 3 Types of Business Analyst

Special Cases

We’ve talked about the main 3 types of BA, but we can extract some really valuable information by looking at some common but special cases in which business analysts play a unique role.

What is a Business Analyst in Agile?

Agile is, according Oxford Languages, a “method of project management, used especially for software development, that is characterized by the division of tasks into short phases of work and frequent reassessment and adaptation of plans.”

The counterpart to agile is waterfall methodology in which long production cycles with clear hierarchies reign strong.

Traditionally, the business analyst role is part of waterfall methodology. It has its origins in the traditional structure and has had to evolve with the advent of agile, which works much better in software companies.

There are many conflicting views about the specific role. But more often than not, it’s a product development BA that works in agile. A business analyst in agile is, thus, an internally-focused employee who elicits functional and non functional requirements towards the creation of new products in short product life cycles.

What is a Business Analyst in Software Development

Similar to a business analyst in agile, a business analyst in software development is a product development BA. They focus on getting the product to market in the way the end user wants it, and they do so through either agile or waterfall methodologies.

What is a Business Analyst in IT

A business analyst in IT is another way of saying business analyst in software development. They’re both product development BAs who adapt to the company’s methodologies.

I think there’s chance for miscommunication around what exactly an “IT” company is. By definition, IT stands for Information Technology, which makes IT a specific branch of tech companies.

For our purposes, there’s no significant difference. Business analysts in IT companies fulfill more or less the same role as they do in software development companies, whether in agile or waterfall methodologies.

Conclusion

According to the Business Analysis Body of Knowledge (or BABOK) Guide, a business analyst is “any person who performs business analysis, no matter their job title or organizational role.” The three types of business analyst defined in this article are the most common ways people take on the business analyst role.

Ultimately, a strict definition of business analysis is difficult. As any good business analyst knows, the important thing is to always remain flexible, data-drive, professional, and an excellent communicator.

So really, what is a business analyst? It’s an employee dedicated to making the enterprise better by making changes and improvements that result in more value for everyone. In this way, we can think of business analysts as intra-company entrepreneurs.