Need Business Analysis Solutions? Ask Your Dog, Not Your Cat

 

We humans analyze a lot of things – our preferred modes of transportation, clothing, and the various technical approaches we take to bring our projects in on-time, on-budget. Of course, the way we analyze these things can (and does) have potential difficulties; hence the thankfully short-lived popularity of the AMC Pacer, bell-bottom jeans, and a plethora of business analysis techniques of questionable utility that have somehow crept into the PM codex.

Duct Tape Won’t Fix That

I appreciate the need to perform business analysis well. With the majority of companies in a wide variety of industries operating with as little as a 3% profit margin, any insight that can be gleaned from the available data might be the difference between survival and bankruptcy for quite a lot of managers in general, and Project Managers in particular. The problem is getting at those insights, at knowing what kinds of data to collect, how to process it into usable information, and which decisions are indicated from accurate, timely, and (most of all) relevant information. These are all very fluid parameters, varying from industry to industry, and project to project. The inventory control and reordering advances that made Walmart a giant in retail would have little to no effect on your typical software developing company, much as Carnegie Melon University’s Capability Maturity Model would not be expected to provide insights on getting ahead in retail.  The specific tools that help in one type of project aren’t necessarily useful in another, while, at the other end of the extreme, notions that are so general as to be accurate across industries (e.g., “work hard, and treat customers well”) are rendered cliché. What’s a business analyst to do?

Let’s start by defining which type of management we’re talking about here. As my regular readers know, there are three types of management, Asset, Project, and Strategic, with different objectives and tools used to attain them. Since this is a Project Management blog, I’ll jump right in to PM, with the caveat that it’s absolutely necessary to discard the tools belonging to the other types. As a PM, calculating an asset’s return on investment (ROI) does nothing for me but waste my time (and don’t get me started on those who attempt to compute ROI on things like a project team – the epistemological equivalent of having a 16^th century apothecary fill your prescription for Amoxicillin).

Neither Will Crystal Balls or Tea Leaves

Within the realm of PM, the next crucial question is: what is it, generally speaking, that you want to know? Everyone wants to know the future. Business Analysts get that. But the future cannot be known, or quantified, no matter how fancy the Gaussian Curve-overusers’ (also known as risk managers) formulae appear to be. All management information systems that attempt to capture the future are known as “feed-forward,” and depend on highly subjective data. And just so we’re clear – by “highly subjective data,” we’re talking about somebody’s prejudices, or guesses. Feed-forward systems are notoriously unreliable, again, no matter how much statistical jargon is used to convey their “results.”

For the Project Manager, then, the best available information is based on feed-back systems; and, in the PM world, this information comes from the analysis methods of Earned Value and Critical Path. Each system is based on known facts – objective data – but can deliver a remarkably accurate picture of the future. This is because these methods return the project team’s performance, and in rather stark terms. Using estimate-at-completion formulae (Earned Value) and recalculating the project’s status file (Critical Path), these systems can return the total project cost and completion date, almost always within 10%, and often even more accurately.

Dogs or Cats, Though…

Indeed, Earned Value and Critical Path methods are the dogs of the business analysis world. They’re reliable, relatively inexpensive to obtain and maintain, and provide many benefits, all while being very happy to just be a part of the project team. Risk management, and other feed-forward, subjective data-based systems, on the other hand, are the cats of the business analysis universe. They’re the very picture of unreliability, and yet through a bizarre appeal to the intellect, have been accepted at a level equal to (or even higher than) dogs. They are high-maintenance, and carry an air of being superior to the other elements of the project team, even though they are demonstrably unable to make any real contributions to the end goals of the organization.

So, the overarching business analysis question is much like the preferred pet quandary, with a similar optimal solution. Go with the dog, and ignore (or even get rid of) the cat –it ignores you, after all.