APPENDIX X3
BUSINESS ANALYST COMPETENCIES

Business analysts who possess the knowledge, skills, and personal qualities that comprise the business analyst competencies are able to perform business analysis processes effectively.

This appendix describes six categories of important business analyst competencies:

• Analytical skills,
• Expert judgment,
• Communication skills,
• Personal skills,
• Leadership skills, and
• Tool knowledge.

Although the list of competencies provided is comprehensive, it is not intended to be complete. It does serve as a checklist for business analysts to gauge and measure their personal competencies in order to highlight areas where future professional development efforts may be targeted.

X3.1 ANALYTICAL SKILLS

Analytical skills are utilized by the business analyst to:

• Process information of various types and at various levels of detail,
• Break down the information,
• Look at information from different viewpoints,
• Draw conclusions,
• Distinguish the relevant from irrelevant,
• Formulate decisions, and
• Solve problems.

The analytical skills category is composed of the following:

• Creative thinking,
• Conceptual and detailed thinking,
• Decision making,
• Design thinking,
• Numeracy,
• Problem solving,
• Research skills,
• Resourcefulness, and
• Systems thinking.

X3.1.1 CREATIVE THINKING

Creative thinking is the ability to resolve a problem or set of problems by exploring multiple and different solutions to arrive at an improved result. Creative thinking takes into account known constraints and encourages the use of a divergent thinking approach when solving problems. It is important for business analysts to be able to apply creative thinking to their work so they can help stakeholders identify requirements and solutions that will successfully address business problems and respond effectively to changing conditions.

X3.1.2 CONCEPTUAL AND DETAILED THINKING

Conceptual and detailed thinking is the ability to move between high-level and detailed thinking, for example analyzing holistically and then analyzing a specific detail of the whole. Business analysts need to be able to think both conceptually and in detail so that they can communicate effectively across different stakeholder groups, break apart large problems into component parts, roll up details to find common themes, assess the viability of different solutions, and suggest adjustments as needed.

X3.1.3 DECISION MAKING

Decision making is the ability to weigh the benefits and drawbacks associated with a set of options, choose among various options, and articulate the rationale for the choice. Decision making can involve rational reasoning, intuitive reasoning, or both. Decision making can be improved when leveraging other competencies such as systems thinking which considers the holistic view of the organization and being capable of understanding the details in conjunction with the whole. Another critical component of decision making is being able to identify when it is appropriate to postpone making a decision, which could occur when there are too many assumptions or inadequate results to work from. Decision making is a critical skill for business analysts because they are responsible for making a variety of decisions when performing business analysis in addition to supporting stakeholder decision making.

X3.1.4 DESIGN THINKING

Design thinking is an approach that uses solution-based thinking as its focus rather than problem-based thinking. Teams determine an end goal to achieve, rather than a problem to solve, and produce creative solutions to achieve the goal. Design thinking is based on the following four principles:

• Encourage social design activities,
• Allow for ambiguity rather than constraints,
• Assume that most design is a redesign of a previous problem's solutions, and
• Ensure abstract ideas are made tangible.

Design thinking can be used as a method for transforming business processes as well as achieving outputs or solutions. Design thinking could entail using business analysis techniques such as visual modeling, five-whys, prototyping, persona analysis, or others.

X3.1.5 NUMERACY

Numeracy is sometimes called mathematical literacy. Being numerate means being able to reason with numbers and other mathematical concepts and to apply these in a range of contexts and to solve a variety of problems. Numeracy is necessary for a business analyst to effectively analyze data, work with organizational leaders on quantifying business needs and objectives, and be able to judge whether or not a mathematical argument holds up at any point in their work.

X3.1.6 PROBLEM SOLVING

Problem solving is the ability to analyze an issue or difficult situation by:

• Understanding the problem,
• Identifying potential solutions,
• Selecting and implementing a solution to address the problem, and
• Monitoring the outcome to ensure that the problem was addressed satisfactorily.

An important component of problem solving is identifying the nature of the problem and tailoring the solution appropriately. For example, interpersonal conflict on the product team creates problems that require resolutions that are very different from those required to resolve technical challenges or system issues. Problem solving is a critical skill for business analysts because they encounter problems throughout the product life cycle. Often, the success or failure of the portfolio, program, or project hinges on the analyst's ability to help resolve problems successfully.

X3.1.7 RESEARCH SKILLS

Research skills are the ability to elicit useful information in a timely and effective manner. There are many different ways to elicit information, such as in-person interviews with subject matter experts (SMEs), observation, document analysis, or using more conventional information sources like internet searches, user groups, and books. Effective research leads to information that is trustworthy, clear, and useful as an input for solving a problem or making a decision. A key component of an effective researcher is being willing and eager to learn more about a given subject. Because information is always required to analyze a situation effectively and devise a path forward, research skills are critical to a business analyst's overall success.

X3.1.8 RESOURCEFULNESS

Resourcefulness is using alternative or creative means to elicit information and solve problems, especially when a clear or conventional solution is not available. Resourcefulness includes leveraging available resources and identifying when a particular method of research might not be appropriate. A business analyst is resourceful when finding different ways to deal with a situation, such as looking for creative and alternative methods to secure time with stakeholders who have minimal availability. Learning from past experience, including lessons learned and retrospective sessions, is another key component of resourcefulness. Business analysts need to be resourceful because the information they require is often not readily available, requiring alternative methods for eliciting useful inputs to the decision-making and problem-solving processes.

X3.1.9 SYSTEMS THINKING

Systems thinking is the ability to analyze information from both a holistic and detailed viewpoint. Applying systems thinking at the organizational level requires skills to recognize and analyze the organization as a system made up of component parts in the form of people, processes, and tools. Recognizing the organization by the components and the relationships between them is necessary to ensure proposed organizational changes are analyzed to understand how a change to one component can impact related items.

X3.2 EXPERT JUDGMENT

Expert judgment relates to the skills and knowledge obtained from acquiring expertise in an application area, Knowledge Area, discipline, industry, etc., as appropriate for the activity being performed. It includes the skills to apply acquired knowledge and enterprise environmental factors and organizational process assets to perform work effectively. Expert judgment is composed of enterprise/organizational knowledge, business acumen, industry knowledge, life cycle knowledge, political and cultural awareness, product knowledge, and standards.

• Enterprise/organizational knowledge,
• Business acumen,
• Industry knowledge,
• Life cycle knowledge,
• Political and cultural awareness,
• Product knowledge, and
• Standards.

X3.2.1 ENTERPRISE/ORGANIZATIONAL KNOWLEDGE

Enterprise/organizational knowledge is having an understanding and familiarity with the way a specific business is organized and operates, both from a high-level perspective and from a tactical standpoint. This skill also includes the ability to understand how the unique characteristics of an enterprise might constrain or enable the success of a given solution and how to effectively negotiate across different organizational levels. This skill also encompasses a working knowledge of common business functions, including finance, marketing, operations, legal, etc. Because business analysis work frequently spans across different organizational functions and impacts multiple areas of an enterprise, enterprise/organizational knowledge is a crucial skill.

X3.2.2 BUSINESS ACUMEN

Business acumen is the skill of applying business and industry knowledge with decision-making capabilities to make sound decisions. Business acumen requires an understanding about how the organization operates within the competitive environment, what drives its profitability, and the relationship of its products to strategy. A person who demonstrates business acumen understands the bigger picture and is capable of using that knowledge to critically think through a situation.

X3.2.3 INDUSTRY KNOWLEDGE

Industry knowledge is expertise in and familiarity with the industry in which an organization is participating, and includes knowledge about an organization's competitors, industry trends and challenges, applicable business models, and so forth. Industry knowledge is beneficial because it helps the business analyst relate to and build credibility with stakeholders, identify outside economic forces that could provide context for the current situation, and inform decision making regarding organizational solutions designed to take advantage of market opportunities or minimize market threats.

X3.2.4 LIFE CYCLE KNOWLEDGE

Life cycle knowledge includes familiarity with the different frameworks that a given industry uses to identify phases of product development, from envisioning and planning through construction, iteration, and end-of-life. Life cycle knowledge also includes an in-depth understanding of the frameworks that the organization subscribes to, as well as the business analyst's role in each phase. It is crucial that business analysts know what is expected of them in each phase of the product or software development life cycle so that they can perform the responsibilities of their role effectively. Working knowledge of other frameworks is helpful as well, in order to identify areas of opportunity for organizational improvement.

X3.2.5 POLITICAL AND CULTURAL AWARENESS

Political awareness involves being conscious of organizational dynamics as they relate to organizational levels, hierarchy, and the way power is distributed throughout an organization. Cultural awareness involves being conscious of the organization's culture and values, as well as being sensitive to the cultural mores of colleagues, especially when operating within an organization that has multinational employees. Political awareness is important because politics can influence the success of an organization both positively and negatively: positively when organizational power can be leveraged to enable a solution, or negatively when a solution is found to be at odds with the interests of one or more powerful actors in the organization. It is important for the business analyst to understand the dynamics at play and be able to navigate them to have the best possible outcome for the product and the organization. Cultural awareness is critical because its presence creates trust and compassion among coworkers, while its absence creates misunderstanding and inhibits effective communication and engagement.

X3.2.6 PRODUCT KNOWLEDGE

Product knowledge is understanding the different offerings that an organization provides to its customers, their strengths and weaknesses compared to the organization's competitors, and the opportunities and threats that exist for those offerings. It also includes knowledge of the internal workings of an organization used to facilitate business operations, even if those components are never exposed directly to an end customer. Product knowledge is required to ensure that organizations focus on the problems that will provide the most value when addressed and pursue solutions that will increase the organization's ability to compete in the marketplace.

X3.2.7 STANDARDS

A business analyst should recognize and be aware of the various governance structures in place within and external to the organization, including project management governance, quality governance, and external regulatory or legal guidelines. These structures are taken into account as constraints when designing business solutions, and are incorporated into business analysis activities. Equally important are industry standards that help the organization evolve its practices and align with common practices in use within the external business analysis community.

X3.3 COMMUNICATION SKILLS

Communication skills are composed of a collection of skills utilized to provide, receive, or elicit information from various sources. Because of the number of relationships and interactions business analysts need to manage and the amount of information that has to be exchanged, these skills are some of the most critical ones for the business analyst to master. The communication skills category is composed of:

• Active listening,
• Communication tailoring,
• Facilitation,
• Nonverbal and verbal communication,
• Visual communication skills,
• Professional writing, and
• Relationship building.

X3.3.1 ACTIVE LISTENING

Active listening is being attentive and participatory when engaging with another individual. It includes comprehension-checking skills such as repeating what the speaker said in the listener's own words and nonverbal cues to show the speaker that the listener is paying attention. It also includes asking for clarification, expansion, or explanation when needed. Active listening is critical for business analysts when eliciting information from stakeholders and working with other members of the team because it aids comprehension and facilitates communication.

X3.3.2 COMMUNICATION TAILORING

Communication tailoring is selecting the appropriate method and style of communication to use in a given situation based on factors such as audience (role, internal versus external, individual versus group, etc.) and available communication methods (email, phone, instant message, teleconference, in-person meeting, etc.). Communication tailoring is important because business analysts consistently need to communicate across multiple levels of an organization and with both internal and external stakeholders. The business analyst makes decisions about the best communication methods to use based on project and stakeholder characteristics.

X3.3.3 FACILITATION

Facilitation is the collection of activities involved in directing and coordinating work among groups of people. Facilitation skills for a business analyst involves facilitating work within the business analysis approach such as facilitating decision making and organizational change as well as facilitating activities supporting elicitation including scheduling and planning meetings, inviting appropriate members, preparing agendas and meeting materials, maintaining control of a meeting, encouraging useful discussion and comprehensive engagement, and ensuring proper capture of information and tracking of issues and action items.

X3.3.5 NONVERBAL COMMUNICATION

Nonverbal communication refers to the ability to use unspoken communication methods to communicate. A commonly used unspoken communication method is body language. Business analysts are more effective in understanding the stakeholders they interact with when they develop their skills to recognize and understand body language. This skill is important in the context of facilitating effective elicitation sessions and interviewing stakeholders because nonverbal cues provide useful information about the mood and feelings of stakeholders and their thoughts toward the subject being discussed.

X3.3.6 VERBAL COMMUNICATION

Verbal communication refers to being an effective speaker in all professional contexts, from a one-on-one elicitation session to a presentation in front of executives. In all situations, business analysts should be able to communicate complex ideas concisely, clearly, and in a manner tailored to the audience. In cross-cultural contexts, verbal communication styles should take into account the language proficiency of the other party. Verbal communication is a key skill in any role, but is especially important for business analysts, who often need to communicate with diverse stakeholder groups to work through complex topics.

X3.3.7 VISUAL COMMUNICATION SKILLS

Visual communication involves the ability to communicate through the use of models and visual representations and involves knowing when best to use these representations over the spoken or written words. Business analysts are often faced with complex information that makes for a difficult exchange of ideas and understanding. Effective visual communication skills are demonstrated when a business analyst applies visual models to assist with the facilitation of complex logic or concepts.

X3.3.8 PROFESSIONAL WRITING

Professional writing refers to the ability to communicate complex ideas clearly and succinctly using written language. It includes proficiency both in the mechanics of writing (grammar, spelling, sentence structure, etc.) and in choosing the appropriate writing style (technical versus business writing, formal versus informal, etc.). Though clear writing is important when writing requirements, professional writing proficiency is also required for email, instant messaging, and other more informal modes of writing, such as status reporting. Informal written communication is increasingly being used to facilitate communication across organizations, making good writing skills even more important.

X3.3.9 RELATIONSHIP BUILDING

Relationship-building skills include interpersonal skills, empathy, and other social skills required to be an effective member of a team or a group. Being willing to make sacrifices for the good of the team, showing appreciation and gratitude, using appropriate humor to make people feel comfortable, letting other people speak in group settings without interrupting them, and finding constructive ways to offer criticism and feedback are just a few ways that business analysts can successfully build lasting professional relationships. Relationship building is crucial for business analysts because they are a key member of a product team and depend on others, just as others depend on them. Much of the work the business analyst completes is achieved through the input and support of others; therefore, business analysts need to be proactive in building relationships.

X3.4 PERSONAL SKILLS

Personal skills are the set of skills and quality attributes that identify the personal attributes of an individual. The skills and qualities listed are commonly used by stakeholders, project team members, and peers to critique a business analyst on a personal level. When a business analyst is viewed as being strong in any or all of these skills and attributes, the business analyst is able to build credibility. The personal skills category is composed of:

• Adaptability,
• Ethics,
• Learner,
• Multitasking,
• Objectivity,
• Self-awareness,
• Time management, and
• Work ethic.

X3.4.1 ADAPTABILITY

Adaptability is adjusting one's way of working or how one approaches a problem or situation to fit the circumstances. For a business analyst, it means choosing the appropriate tools or techniques based on the type of problem that is being addressed, being able to understand things quickly and react to changing circumstances, embracing change, and being able to admit when an approach is not working. Adaptability is critical for business analysts because they work in unpredictable environments with lots of moving parts. Being able to adjust quickly to change improves the chances of finding a successful approach to problems. Demonstrating comfort with change helps reduce the anxieties of stakeholders who have difficulty with changing circumstances.

X3.4.2 ETHICS

Ethical behavior is acting with integrity in business dealings and displaying professional behavior that is honest. Behaving ethically can result in being recognized by peers as a trustworthy and reliable team member. Most organizations have a code of conduct or similar guideline that outlines key components of ethical behavior as it relates to the organization. A business analyst is expected to understand and explicitly follow an organization's code of conduct. It is important for a business analyst to behave ethically because doing so creates trust and facilitates good working relationships with team members and stakeholders. Business analysts applying for a professional certification, for example, the PMI Professional in Business Analysis (PMI-PBA)^®, are required to acknowledge and agree to a professional code of ethics.

X3.4.3 LEARNER

Being a learner involves a constant willingness to learn new skills, discover improved ways of doing things, and generally being curious. Although part of being a learner involves continuing education through industry organizations and other structured means, unstructured or self-led education also plays an important role. It is necessary for business analysts to be open to learning new things and applying new skills to assimilate improvements into their work, and to remain informed of any trends impacting the industry and profession.

X3.4.4 MULTITASKING

Participating in more than one product team, navigating competing stakeholder interests, and meeting multiple deadlines are all part of multitasking. This skill also includes the ability to prioritize tasks to ensure that the most important tasks are completed first. Business analysts are often juggling multiple tasks and are accountable to many different stakeholders, making it crucial for them to be able to multitask effectively. Knowing when to multitask is equally important, because taking on too much work could result in ineffectiveness. The quality of deliverables and work performed should not be jeopardized by multitasking; business analysts should continue to deliver high-quality results whether the task being performed is conducted singularly or through multitasking.

X3.4.5 OBJECTIVITY

Being objective means listening to and encouraging the presentation of multiple perspectives on a given issue, weighing the merits of each perspective dispassionately and without bias, and avoiding taking sides prematurely. It also means being intellectually honest with oneself and having the capacity to realize that one's personal viewpoint might not always be correct. Business analysts are often asked for guidance on the appropriate solution for a given problem. In these scenarios, being able to weigh the merits and drawbacks of each path objectively is important, not only in making the most sensible choice but also in earning trust from team members.

X3.4.6 SELF-AWARENESS

Being self-aware is the capacity for understanding, controlling, and being able to express emotions. This is also known as emotional intelligence. Self-awareness also involves being able to identify how one's actions might be perceived by others. For a business analyst, having self-awareness is important for dealing with the inevitable stresses of the job. The ability to identify and control emotions is beneficial because business analysts are sometimes tasked with playing the neutral facilitator between stakeholders to work through conflict.

X3.4.7 TIME MANAGEMENT

Time management skills enable business analysts to stay organized, be productive, and plan effectively. Skilled time managers have a good sense of everything they need to work on, can estimate how long each task will take, are able to effectively break large tasks down into component parts, and understand sequencing in order to prioritize the most important work first. They use past experience and time management techniques to estimate when tasks will be complete, and confidently commit to those estimates. Staying productive, applying effective prioritization, and managing time in order to meet deadlines helps a business analyst work effectively.

X3.4.8 WORK ETHIC

Having a good work ethic means completing assigned work on time and being motivated and driven to do what needs to be done, with minimal supervision. This is often referred to as being a “self-starter.” Business analysts who possess a strong work ethic help motivate peer business analysts and other product team members. Their passion and excitement for the work being performed can become infectious, but when a good work ethic is not demonstrated, it can breed complacency across the team.

X3.5 LEADERSHIP SKILLS

Leadership involves focusing the efforts of a group of people toward a common goal and enabling them to work as a team. Business analysts leverage leadership skills to lead disparate groups of stakeholders through various forms of elicitation, to sort through stakeholder differences, to help the business reach decisions on requirements and priorities, and ultimately to gain buy-in to transition a solution into the business environment. The leadership category is composed of:

• Change agent skills,
• Negotiation skills,
• Personal development skills, and
• Skills to enable one to become a trusted advisor.

X3.5.1 CHANGE AGENT

A change agent is someone who acts as a catalyst for organizational innovation. A change agent has the vision to recognize where and when change is needed and is able to influence actions that bring those changes to fruition. Business analysts are great candidates for change agents because their role entails understanding business and enterprise architectures, the business need, different stakeholder perspectives, transition requirements, and the issues that relate to organizational change, all of which provides them with the knowledge to recognize where and when organizational change can be most beneficial.

X3.5.2 NEGOTIATION

Negotiation skills refer to the set of behaviors that allow a business analyst to navigate conflict and disagreement effectively. Negotiation involves recognizing when there is a potential for conflict and being able to manage and deescalate conflicts that arise in order to mitigate negative impacts and facilitate agreement or consensus. Negotiation skills are critical for business analysts, who are often forced to facilitate through difficult prioritization choices and requirements conflicts from different stakeholder groups.

X3.5.3 PERSONAL DEVELOPMENT

Personal development refers to all actions related to improving the skills of business analysts. Senior business analysts can help improve the performance of less experienced peers by providing coaching, mentoring, peer review, and teaching services. Senior resources may be paired with less experienced business analysts on activities to provide on-the-job experience. Communities of practice enable business analysts to learn from one another within an organization, and local PMI chapter involvement allows business analysts to learn from one another in a professional community. All business analysts, regardless of skill level, should seek out professional development opportunities to keep informed of the changing trends in the profession.

X3.5.4 TRUSTED ADVISOR

Being a trusted advisor means stakeholders have enough confidence in an individual that the stakeholder can speak freely and candidly. It also means that stakeholders trust and respect the individual enough to feel comfortable confiding in him or her when they need help or want advice. Being a trusted advisor is not a competency or skill, but to attain this label of distinction one must possess the traits and skills stakeholders look for in advisors such as honesty and trustworthiness. Stakeholders may consider someone a trusted advisor based on observable actions; for example, how someone builds and cares for relationships, puts the interests of others first, takes ownership of difficult situations, or works beyond their role for the betterment of the team. Being seen as a trusted advisor is imperative for business analysts so they can present information openly and honestly and can obtain the trust of stakeholders who often need to share sensitive or controversial information.

X3.6 TOOL KNOWLEDGE

Tool knowledge is composed of various categories of tools that, when mastered, enable practitioners to work effectively at their jobs. Business analysts use several different software and hardware tools to help them interact with stakeholders and get work done. The tool knowledge category is composed of:

• Communication and collaboration tools,
• Desktop tools,
• Reporting and analysis tools,
• Requirements management tools, and
• Modeling tools.

X3.6.1 COMMUNICATION AND COLLABORATION TOOLS

Communication and collaboration tools help business analysts disseminate critical information to stakeholders, work with project participants regardless of location, keep track of versioning, and coordinate information among different groups. Common examples of communication and collaboration tools include email, instant messaging, screen sharing, videoconferencing, and file sharing tools. Business analysts need to be able to effectively utilize the communication and collaboration tools selected for the project, regardless of their level of business analysis experience, as all business analysts have a need to communicate and collaborate across the product team.

X3.6.2 DESKTOP TOOLS

Desktop tools help business analysts manage their time and work productively. Tools such as standard office software, work timers, note-taking programs, issue trackers, and audio recording pens fall within this category. Having working knowledge of the desktop tools that suit an individual's working style and environment can help make that individual more productive and effective on projects.

X3.6.3 REPORTING AND ANALYSIS TOOLS

Reporting and analysis tools help business analysts make sense of the ever-increasing amount of data available in today's business environment. Being able to dissect and analyze data leads to smarter, more informed, and more effective decision making, so knowledge of reporting and analysis tools is critical for business analysts operating in almost any industry. These tools are of significant value for business analysts who have responsibility for summarizing results and reporting trends to senior-level managers.

X3.6.4 REQUIREMENTS MANAGEMENT TOOLS

Requirements management tools are tools that facilitate the requirements management process. They enable functions beyond standard office software, for example:

• Effective capture and storage of requirements and associated attributes;
• Supporting changes to requirements and other product information, including automating impact analysis;
• Tracking relationships between requirements and other product information;
• Enabling requirements reuse;
• Facilitating collaboration, including verification, validation, and sign-off processes;
• Supporting prototyping and simulation; and
• Providing automatic versioning and support for historical reporting.

Because requirements management is one of the most important components of business analysis, it is critical for the business analyst to obtain mastery of the requirements management tool in use by the organization.

X3.6.5 MODELING TOOLS

Modeling tools help create the visualizations that business analysts use during elicitation, analysis, and requirements management and development. These tools facilitate the creation of artifacts such as screen mockups, rough sketches, process models, system diagrams, storyboards, and prototypes. Modeling and visualization have proven to be effective techniques for eliciting and managing product requirements. Modeling tools range from the simple to the sophisticated and it is beneficial for business analysts to be proficient in their use whenever an organization has the will and means to use them.