PDBA: MODULE 3

Day 2
Business Process
Analysis (Lydia Palmer)
6/28/2022
www.criticalthought.co.za
 Module Objectives
Upon completion of this module, you will be able to:
• Follow the Life Cycle of a Business Analyst
• Appreciate the purpose of Business Modelling
• Interpret a Current State (As-Is Model)
• Understand & Apply Business Improvement (BI) Techniques
• Identify changes required for the Business Improvement
effort
• Take a holistic approach to Business Improvement projects
including People, Processes and Technology
• Move towards Measuring and Presenting the Potential
Benefits of your suggested improved business process

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 BUSINESS IMPROVEMENT
DAY 2 DAY 3 DAY 4 DAY 5
Prioritise the Manage the
Issues & Process Improvement
INTRODUCTION
Problems Improvement Process
(cont.)

Decide which Resource Improvement

Identify the
Issues & Planning for Application &
Business Issues
Problems to Improvement Future State
& Problems
Investigate Objectives

Identify the
Prioritise the
Business
Issues &
Processes to be
Problems
Improved

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 Business Process Analysis

Introduction
6/28/2022 4
 Role of The Business Analyst
Identify Business
Objective

Create New Create Current

Requirements State Model

Present proposed
solutions to
BUSINESS Analyse
Current State
Stakeholders Model
ANALYST
Conduct Gap Create Future
Analysis State Model(s)
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 Process Improvement Checklist
1. Support the business strategy / goals?
▪ Stretch goals to achieve quantum changes
▪ Strategies and goals drive design principles
2. Focus on the customer?
▪ Look at elements that are critically important to the
customer
▪ Look for order-of-magnitude innovations in those critical
elements
▪ Look at the value chain for the customer, and for the
customer’s customer
▪ Maximize direct customer contact with everyone

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 Process Improvement Checklist (2)
3. Institute quality?
▪ Catch problems earlier and establish feedback channels
▪ Identify and monitor key process measurements
▪ Institute a continuous improvement process

4. Look for sources of innovation

▪ Combine activities
▪ Eliminate non-value adding activities
▪ Add value-adding activities
▪ Convert sequential activities to parallel activities
▪ Look for opportunities in the high labor / cost / time activities

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 Process Improvement Checklist (3)
5. Harness information technology
▪ Use IT to support or redefine business processes
▪ Rethink use of IT, don’t just “pave the cow path”
▪ Workflow prototypes and business simulation can validate
designs
▪ Move information to where the decisions are made
6. Structure organization around processes?
▪ Minimize process divisions
▪ Identify process owners
▪ Create new processes for exceptions
▪ Move decisions where the work is done and closer to the
customer

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 Process Improvement Checklist (4)
7. Focus on teams, not individuals?
▪ Natural work teams and co-location are often effective
▪ Combine managerial and non-managerial activities
▪ Each team member should develop multiple competencies
▪ Reward individual skill development and team performance

8. Inform and train on a just-in-time, need-

to-know basis
Once designed and implemented,
processes should be continually improved
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Types of Change: the Transformation Spectrum

Small Large
Change Change
Scale of Change

6/28/2022 10
 Introduction
• We must ensure that an up to date Current State Model
exists before we can start the Business Improvement
Analysis. This will help the Analyst to understand the
Business.
• The Current State (As-Is model) was created using
“Document Co-formulation”, Observation and “Talking to
the SME’s” in the organisation, AND interpreting any
“Legacy documents” using IE Methodology and / or UML
techniques (and others) should be also used by the BA to
help create the Current State Model. (Module 2)

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 Introduction
• “OUR” Current State Model is created using
the W5 Methodology.
– WHAT, WHICH, WHO, WHEN, WHERE and HOW

• This Model should be confirmed and signed

off by the organisation as the “TRUTH”.
• If this model is not correct, then any analysis
will be flawed as well.

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 Role of The Business Analyst
Identify Business
Objective

Create New Create Current

Requirements State Model

Present proposed
solutions to
BUSINESS Analyse
Current State
Stakeholders Model
ANALYST
Conduct Gap Create Future
Analysis State Model(s)
6/28/2022 13
 BUSINESS PROCESS ANALYSIS

Business Improvement Analysis

Stages & Techniques Outline

ANALYSE CURRENT
STATE MODEL
6/28/2022 14
 Business Improvement Stages
1. (Business) Problem Identification
2. Problem Prioritisation
3. Decision Making
4. Process Identification
5. Resource Planning
6. Techniques for Process Improvement
7. Manage the Improvement Process
6/28/2022 15
 1. Problem Identification
▪ Being able to identify business problems or
issues is not always easy.
▪ We need techniques to analyse the business
problems and processes from different
viewpoints.
▪ Sometimes we need to find out ALL the causes
of the problems, which will help to determine
the solutions.

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 2. Problem Prioritisation
▪ Knowing where to start is key to problem-solving.
▪ Problems could be caused by many possibilities,
and knowing which issues to solve first is
essential.
▪ It is important to involve the key stakeholders to
help identify the issues and problems which
should be prioritised.
▪ Determine what should be fixed first, second,
third etc

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 3. Decision Making
▪ Making good decisions is never an accident!
▪ A decision means making the wisest choice of two
or more alternatives.
▪ Need to set good objectives , have intelligent
direction, make an honest effort and use skillful
execution.

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 4. Process Identification
▪ It is important to identify what actual
processes (in the WHAT MODEL) are causing
the business problems (issues), which have
been identified and prioritised.
▪ In other words: NB
▪ We have identified the actual BUSINESS Problems
and Issues, now we need to identify the
PROCESSES within the the Business Model that are
responsible for these issues.

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 5. Process Improvement
▪ Process improvement is a central part of what any
Business Analyst does.
▪ One should always be looking at ways to do things
better.
▪ So when a process is identified, then various
options should be considered as HOW to actually
improve them.

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 6. Resource Planning
▪ All PROCESSES need resources to “operate”.
▪Once a process or group of processes are
identified to “FIX” or “IMPROVE”, then we
also have to ensure that there are enough
or the correct resources available to
operate all of the existing processes, as
well as the “improved processes”.
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 6. Resource Planning (Continued)
▪There is a need to understand the inter-
dependencies between processes and
resources.
▪Need to plan the most efficient way to
plan activities and making the best use of
people and other resources.

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 7. Controlling the Process
▪ Before a process can be improved a Business
Analyst will need to know how well it is
performing already.
▪ Most businesses will strive to improve their
performance over time.
▪ Part of the role of the Business Analyst is to look
at processes and see how they can be improved.
▪ The BA needs to be able to conduct performance
measurement to evaluate the improvement.

6/28/2022 23
 Resource Planning Websites
• https://www.eonsolutions.io/blog/plan-
your-improvement-resources

• https://bib.irb.hr/datoteka/171493.Busines
s_Resource_Planning.pdf

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 Business Improvement
Techniques in Detail
BUSINESS IMPROVEMENT STAGES

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 Business Improvement Techniques (1)
1. Problem 2. Problem 3. Decision
Identification Prioritisation Making

Issue Analysis Value Analysis PEST(LE) Analysis

Cost benefit
Dimension Analysis Pareto Analysis Analysis

Cause & Effect

SWOT Analysis
Diagrams

5 Why’s & Check

De Bono’s (Hats)
Sheets
6/28/2022 26
 Business Improvement Techniques (2)
4. Process 5. Process 6. Resource 7. Managing
Identification Improvement Planning the Process

Process SREDIM Capacity Performance

Modelling Framework Planning Measurement

Dimension
Flowcharting Benchmarking
Analysis (Again)

SIPOC DIAGRAMS Cycle Time Improvement

Reduction Priorities

RADAR Charts
Rhombus of
Change

6/28/2022 27
 BUSINESS IMPROVEMENT
DAY 2 DAY 3 DAY 4 DAY 5
Decide which Manage the
Issues & Process Improvement
INTRODUCTION
Problems to Improvement Process
Investigate

Identify the Resource Improvement

Identify the
Business Planning for Application &
Business Issues
Processes to be the Improved Future State
& Problems
Improved Processes

Prioritise the
Issues &
Problems

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 Business Process
Analysis

Identify the Business Problems

6/28/2022 29
 1. Problem Identification
▪ Being able to identify business problems or
issues is not always easy.
▪ We need techniques to analyse the business
problems and processes from different
viewpoints.
▪ Sometimes we need to find out ALL the causes
of the problems, which will help to determine
the solutions.

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PROBLEM IDENTIFICATION
Issue Analysis
Dimension Analysis

Cause & Effect Diagrams

5 Why’s
Check Sheets
6/28/2022 31
 Issue Analysis
IMPROVEMENT TECHNIQUES
PROBLEM IDENTIFICATION

6/28/2022 32
 Issue Analysis
• The prime reason that a Business Analyst
creates a business model (Current State
Model) is to gain a common and correct
understanding of how the business runs.
• Once there is a model to work with, then
most “issues” in the business are easier to
identify and hopefully solve.

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 BUSINESS ISSUES - (Symptoms)
• Sales numbers are dropping.
• High Staff Turnover.
• More returns of items than before.
• Downtime is more frequent.
• Revenue dropping.
• Expenses have increased
• Customers are not satisfied.
6/28/2022 34
 Identify the issues.
• Be clear about what the business problem
is.
• Remember that different people might
have different views of what the issues are.
• Separate the listing of issues from the
identification of interests (that's the next
step!).
https://www.mediate.com/articles/thicks.cfm#bio

6/28/2022 35
 Identify Business Problem (Issue)

Favorable conditions for

Business Improvement
Understand the client’s Success:
business need. ▪ Executive owns the
problem
Identify red Issues for ▪ Executive has power to
executives – make changes
“what keeps them awake ▪ Executive is already
at night” thinking about the problem
▪ Large potential benefits -
perceived and actual.

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 Business Issue Analysis Definition
Business Issue Analysis is the process of
▪ identifying,
▪ analyzing and
▪ categorizing
Current-state “Issues” and “Solutions” to
lay the foundation for improvements in
the Future-state

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 Identify Red Issues
• Criteria:
▪ Sense of urgency
▪ Complex issue (multiple functions involved)
▪ Perceived value of outside resource.
▪ Belongs to Executive.
▪ Critical to success of Executive’s organization
▪ They are working on it already

6/28/2022 38
 Identify Red Issues

Red Issues
Urgency &
Importance

Individual Issues/Problems Normal Issues

6/28/2022 39
 Something to consider
• When a BA is trying find Problems or Issues
in a business, it is important to know
whether the actual symptoms are affecting
the parts of the business that ADD VALUE,
or the PARTS of the business that do not
add value.
• It is a question that you should be ready to
ask during the entire Improvement process.
6/28/2022 40
 Value and Non-Value Added
• It is important for a BA to understand the
difference between Value & Non-Value
added Analysis.
• You should think of it as Need to have,
versus Nice to have.
• Will the Nice to have add value to the
business?

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 Value Added vs. Non-Value Added Analysis

Add profile to activities as VA

or NVA
▪ Value Adding: directly converts
resources into products or
services that the customer
values (is it something the
customer would pay for?)
▪ Non-Value Adding: everything
else
Work to eliminate or reduce
NVA activities
6/28/2022 42
Examples of Value Add & Non-Value Add Activities

Value Add Non-Value Add

Activities Activities
• Direct production / • Rework
assembly activities • Moving inventory/
transportation
• Pre-sale • Inspection / verification /
consultation review
• Duplication of work (e.g..
• Order taking data entry)
• Service / Support • Logging / filing / paperwork

6/28/2022 43
PROBLEM IDENTIFICATION
Issue Analysis
Dimension Analysis

Cause & Effect Diagrams

5 Why’s
Check Sheets
6/28/2022 44
 Business Dimension Analysis
(aka – Affinity Analysis)
IMPROVEMENT TECHNIQUES
PROBLEM IDENTIFICATION

6/28/2022 45
 Business Dimension Analysis
Definition
• Dimension Analysis examines the relationships
between two or more dimensions in the W5 Model
– (Dimensions are the WHAT, WHICH, WHO, WHEN
and WHERE in the BML - W5 Model)
• Provide means to improve business through
identifying gaps, ‘bottlenecks’, redundancies, and
inefficiencies.
• Typically produced in table format in which
relationships are graphically represented

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 Dimension Analysis - Explanation
• Dimension Analysis can be used for many
purposes. It can be used to:
– Identify the where business issues occur.
– Identify processes which need to be “fixed”.
– Help fix the processes.
• Dimension Analysis will be revisited again.
• Get very familiar with this technique

6/28/2022 47
Affinity Analysis vs Dimension Analysis
http://www.wikipedia.com

Industry Term BusinessGenetics®

BML & Business
Affinity Analysis
Dimensional Analysis
An analysis technique that
discovers co-occurrence 5 distinct dimensions
relationships among (WHAT, WHICH, WHO,
activities performed by WHERE, WHEN) and HOW
specific individuals or groups Interrelationships between
in a computer science
any two or more dimensions
context.*
in a Business Context.
6/28/2022 *http://www.wikipedia.com 48
 Business Dimension Analysis
• Identify potential Business Improvement
Opportunities using Business Dimension
Analyses
• Apply Business Dimension Analysis to identify
where some problems might be occurring.
• Determine most appropriate dimension
affinities to use for a project
• Produce Dimension Analysis reports

6/28/2022 49
 Business Dimension Analysis
Example MATRIX
Who 1 Who 2 Who 3 Who 4 Who 5 Who 6

What 1 x x
What 2 x x x
What 3 x
What 4 x x
What 5
What 6 x x
What 7 x

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 Business Dimension Analysis
Example REPORT
Comparison dimensions: What vs. Who
Model(s): Fill Position Level 1 Business Process

1 Determine Position Need (Activity)

Inputs

Manufacturing Hiring Manager

RACI
RACI (R)
Tech Hiring Manager
RACI
RACI (R)
HR Manager
RACI
RACI (R)

6/28/2022 51
6/28/2022 52
 Business Dimension Analysis

BMLs five business dimensions contain the

baseline data you would need to do up to 120
unique dimension relationship combinations
1X1
1X1X1
WHICH WHO WHERE WHEN

WHAT

WHICH

WHO

WHERE

WHEN

6/28/2022 53
 Steps in Business Dimension Analysis
• Determine Questions to Be Answered by Dimension Analysis
1

2 • Select appropriate dimension analyses

3 • Apply and populate W5 Profile during current state modeling

• Run Applicable Dimension Analysis Reports

4
• Identify Possible BI opportunities Through Analysis of Reports
5
• Validate Possible BI opportunities
6
• Model Future State to represent BI opportunities
7
• Run Applicable Dimension Analysis Reports on future state model
8

9 • Feed Business Case

6/28/2022 54
 Step 1 - Determine questions to be
answered by Dimension Analysis
1. Consider your project purpose, goals &
objectives
2. Consider your issues
3. Consider your hypothesis
4. Craft questions to ask that can prove or
disprove the hypothesis

6/28/2022 55
 Examples BUSINESS ISSUES
• Sales numbers are dropping.
• Big Staff Turnover.
• More returns of items than before.
• Downtime is more frequent.
• Revenue dropping
• Expenses have increased
• Customers are not satisfied.
6/28/2022 56
 Step 2 - Select appropriate dimension
analyses
• Example:
• It appears that work might not be
balanced.
• Some people seem to be working too
hard, (Too many activities?), while others
seem to be not working hard enough –
(Too few activities?)
6/28/2022 57
 WHAT Affinities

• Identify conflicts, overlaps & gaps in responsibility,

WHAT x WHO overburdened resources, potential for cross-training
resources, system security access requirements

• Identify sources of inputs/outputs, information

intensive activities, sources for information
WHAT x WHICH automation potential, system information (CRUD)
requirements

• Identify distribution of process activity across

WHAT x WHERE locations, location optimization opportunity

WHAT x WHEN • Identify activities with stringent time restrictions

6/28/2022 58
 Step 2 - Select appropriate dimension
analyses
• Another Example: (WHAT– WHERE)

• I think my IT organization has folks

doing the same things in different
locations.

6/28/2022 59
 Step 2 - Select appropriate dimension
analyses
• Another Example: (WHAT– WHERE)

• For my regulatory reporting, I am

getting different answers to what I
think is the same question from
different departments.

6/28/2022 60
 WHO Affinities

• Identify who has access to which information,

WHO x WHICH: security access requirements, information control
(Who uses which) points, potential business risk (e.g., only 1 role
has access to critical information)

• Identify proximity of employees, gaps in

WHO x WHERE: employee support (e.g., most new hires in
(Who operates where) location 1, mentoring senior employees in
location 2), location optimization opportunity

• Identify conflicts, overlaps & gaps in

WHO x WHAT: responsibility, overburdened resources, potential
(Who does What) for cross-training resources, system security
access requirements

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 WHERE Affinities

• Identify proximity of users’ information processing,

WHERE x WHICH need for system backups / redundancy

• Identify distribution of process activity across

WHERE x WHAT locations, location optimization opportunity

• Identify proximity of employees, gaps in employee

WHERE x WHO support, location optimization opportunity

6/28/2022 62
 THREE AFFINITIES
•Who is performing the same activities and generating the
WHO x WHICH x same outputs or requiring use of the same inputs, could
WHAT illustrate possible inconsistencies and/or redundancies in
generation and usage of information

•Who is performing the same activities in different

WHO x WHAT x locations, could illustrate potential opportunities for
WHERE centralization of work activities

• When there are possible productivity overloads or

WHO x WHEN x opportunities. Could illustrate specific timeframes where
little work effort is taking place vs timeframes when too
WHAT much work activity is taking place, potentially when
resources may be under or over utilized

• Which information may be generated too early or too late

WHAT x WHICH x in the process based on temporal governance. Perhaps
WHEN documentation is being created in draft form and approved
before the complete set of information is actually available
6/28/2022 63
 Step 3 Apply & populate W5 Profile
during current state modeling
• RACI
• Responsible, Accountable, Consulted, Informed (WHO x ___)

• CRUD
• Create, Revise, Update, Delete (WHICH x ___)

• Information source (database/table/spreadsheet) (WHICH)

• Etc.

6/28/2022 64
 Dimension Analysis
• Team discussions:
• Let us think about what we are doing.
• Let us ask some questions & come
up with some Dimension Analysis
reports that can help.

6/28/2022 65
 THREE AFFINITIES
•Who is performing the same activities and generating the
WHO x WHICH x same outputs or requiring use of the same inputs, could
WHAT illustrate possible inconsistencies and/or redundancies in
generation and usage of information

•Who is performing the same activities in different

WHO x WHAT x locations, could illustrate potential opportunities for
WHERE centralization of work activities

• When there are possible productivity overloads or

WHO x WHEN x opportunities. Could illustrate specific timeframes where
little work effort is taking place vs timeframes when too
WHAT much work activity is taking place, potentially when
resources may be under or over utilized

• Which information may be generated too early or too late

WHAT x WHICH x in the process based on temporal governance. Perhaps
WHEN documentation is being created in draft form and approved
before the complete set of information is actually available
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 Step 4 Run Applicable Dimension Analysis
Reports

HOW Based Dimension Relationship Report

Dimension Relationship Report

Dimension Relationship Matrix Report

CRU Report

6/28/2022 67
 Dimension Analysis Reports using W5
BML (W5) Dimension Analysis MATRIX Reports:
1. Open up the W5 Modelling Tool
2. Open the Model that you want to report on.
3. Select “REVIEW” (on the top bar)
4. Select “Basic” Reports (Near top left)
5. Select “Dimension Relationship Matrix Report” with
(Single click) and select “Options”
6. Choose the options you require eg WHAT and WHO..
(OK)
7. Select “Next”

6/28/2022 68
Dimension Analysis Reports using BML
BML Dimension Analysis MATRIX Reports (Continued):
8. Select bottom radio button “Include ONLY the
following selected files and models”
9. Expand the Models File and select the model that
you would like for the Dimension Analysis.
– Example : WHAT model of a HOW MODEL level
or leg.
10.Select “Finish”

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Dimension Analysis Reports using BML
BML Dimension Analysis MATRIX Reports (Continued):
11. Give it is meaningful report name and save
it into the correct folder in your computer.
12. Save – and WAIT for the reports to process.
It takes a while and will eventually
appear on your screen.

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 BML Reports – HOW Based Dimension
Relationship Report
Who by Role What
HR Analyst Post Position
Screen Candidates
Requisition New Position (S)
Determine Next Steps
Extend Offer
Manufacturing Hiring Manager Select Best Candidate
Extend Offer
Requisition New Position (S)
Determine Position Need
Determine Next Steps
HR Director Extend Offer
Requisition New Position (S)
Candidate Extend Offer
Select Best Candidate
Screen Candidates
Determine Next Steps

6/28/2022 71
 BML Reports – Dimension Relationship List

1. Select focus dimension ~ What

2. Select sub dimension ~ Who
3. Select relevant What Model and relevant Who Model to
be included in comparison
4. Generate report
Comparison dimensions: What vs. Who
Model(s): Fill Position Level 1 Business Process

1 Determine Position Need (Activity)

Inputs

Manufacturing Hiring Manager

RACI
RACI (R)
Tech Hiring Manager
RACI
RACI (R)
HR Manager

72
RACI
6/28/2022
RACI (R)
 BML Reports – Dimension Relationship List

Comparison dimensions: What vs. Who

Model(s): Fill Position Level 1 Business Process

1 Determine Position Need (Activity)

Inputs

Manufacturing Hiring Manager

RACI
RACI (R)
Tech Hiring Manager
RACI
RACI (R)
HR Manager
RACI
RACI (R)

6/28/2022 73
 BML Reports – Dimension Relationship Matrix
• More useful to analysis, clearly displays intersections
• Select left dimension ~ What
• Select top dimension ~ Who
• Generate report
Comparison dimensions: What vs. Who
Model(s): Requisition New Position (S) , Fill Position Business Activities , Fill Position Participants

# What/Who Candidate HR Analyst HR Director HR Manager Initech Manufacturing Co-Worker

Fill Position
1 Determine Position Need Input
Input
1.1 Determine Need to Fill Open Position (S)
Determine Need to Requisition New Input
1.2
Position (S)
2 Requisition New Position (S) Input Input Input Input
2.1 Schedule Internal Interviews Input Input
2.2 Interview Hiring Manager Input
2.3 Interview Co-Workers Input Input
2.4 Document Position Responsibilities Input
2.5 Document Position Requirements Input
2.6 Create Job Requisition Input

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Comparison dimensions: What vs. Who
Model(s): Requisition New Position (S) , Fill Position Business Activities , Fill Position Participants

# What/Who Candidate HR Analyst HR Director HR Manager Initech Manufacturing Co-Worker

Fill Position
1 Determine Position Need Input
Input
1.1 Determine Need to Fill Open Position (S)
Determine Need to Requisition New Input
1.2
Position (S)
2 Requisition New Position (S) Input Input Input Input
2.1 Schedule Internal Interviews Input Input
2.2 Interview Hiring Manager Input
2.3 Interview Co-Workers Input Input
2.4 Document Position Responsibilities Input
2.5 Document Position Requirements Input
2.6 Create Job Requisition Input
6/28/2022 75
 Dimension Analysis
• Team discussions:
• Let us think about what we are doing.
• Let us ask some questions & come up
with some Dimension Analysis reports
that can help.
• We will discuss this method later for
Process Identification and Improvement
as well.

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 Syndicate Work
1. Use your Assignment Current State Model
together with the information that you
have gathered from the scenario.
2. Identify at least ONE issue (symptom) of
the business.
3. Find which high level function might be
affected by that symptom.

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 Syndicate Work (Continued)
• Create a HOW leg of the second level of the
model and conduct some Dimension
Analysis on this model.
• Analyse the Model to see whether there
are any red flags.
• Use different dimensions to see whether
the same issue is obvious?

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PROBLEM IDENTIFICATION
Issue Analysis
Dimension Analysis

Cause & Effect Diagrams

5 Why’s
Check Sheets
6/28/2022 79
 Cause & Effect Analysis
IMPROVEMENT TECHNIQUES
PROBLEM IDENTIFICATION

6/28/2022 80
 Cause & Effect Diagrams
• A structured technique that will help you to think
through causes of a problem (the effect) thoroughly and
find the ROOT CAUSE of the problem.
• They force you to consider all of the possible causes of
the problem.
• Also known as Fishbone Diagrams or Ishikawa Diagrams.
• First developed by Kaoru Ishikawa in 1943.
• Displays major categories such as people, methods,
materials, equipment, measurement & environment.
6/28/2022 81
 Root Cause Analysis - Definition
• Root Cause Analysis is based upon the belief
that problems are best solved by attempting
to correct or eliminate root causes, as
opposed to merely addressing the
immediately obvious symptoms.
• Considered to be an iterative process, and is
frequently viewed as a tool of continuous
improvement.

6/28/2022 82
 How we use it in Business Analysis
Context
• Having Identified some Business Issues such
as Sales Numbers Dropping, High Staff
Turnover etc, we now try to discover the
ROOT CAUSE of those Issues.
• We have identified a SYMPTOM of a
problem, and now we try to get to the
ROOT CAUSE.

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 SYMPTOMS of BUSINESS ISSUES
• Sales numbers are dropping.
• High Staff Turnover.
• More returns of items than before.
• Downtime is more frequent.
• Revenue dropping
• Expenses have increased
• Customers are not satisfied.
6/28/2022 84
6/28/2022 85
 Template for Cause & Effect Diagram

6/28/2022 86
Equipment Policies

SYMPTOM
goes here.

Procedures People

6/28/2022 87
 Structure of diagrams

6/28/2022 88
Equipment Policies

Hiring policies in dietary

Outdated
‘clothespin’
Unclear menu
system
Disciplinary Policies

Wrong
meals
served to
patients on
both shifts
No feedback to person
Making mistakes
Handwritten Lack of attention
Instructions In dietary
poor

Procedures People Training

6/28/2022 89
 Root Cause Analysis
Construct Cause & Effect Diagram
1. Use the problem (Issue) that you have
identified to construct a Cause & Effect
(fishbone) diagram.
2. Choose which categories suits your
problem
3. Choose SME’s in the group to build each
cause category two additional levels.
6/28/2022 90
 Steps in Root Cause Analysis
• Determine which potential
issues may require root cause
1 analysis

Issue
• Define the issue or problem
2 Employee arrives late for work.

• Ask Series of 5 Why’s

3

• Create Cause & Effect Diagram

4

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 Step 2
• Determine which potential Issue:
issues may require root
cause analysis Employee arrives late
1
for work.
• Define the issue or Problem:
problem
2 My car stalled on the
highway this morning, I
• Ask Series of 5 Why’s
tried to restart it, but it
3
stalled again and
• Create Cause & Effect would not start.
Diagram
4

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 Step 3
• Determine which potential
issues may require root
cause analysis
1 The 5 Why’s question-asking
method used to explore the
• Define the issue or
problem cause/effect relationships
2
underlying a particular
• Ask Series of 5 problem.
Why’s
3
• Create Cause & Effect
Diagram
4

6/28/2022 93
 Step 3 Ask Series of 5 Why’s
Why did your car stall on the highway? (1)
Fuel tank was empty.
Why was your Fuel Tank empty? (2)
Because I did not fill it up.
Why didn’t you fill it up? (2)
Because I did not have any money for Fuel
Why didn’t you have money? (3)
Because my spouse borrowed my bank card.
Why did your spouse borrow the credit card? (4)
Because I LOST her card when I went gambling last night

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 Step 4
• Determine which potential
issues may require root You can take the results of
cause analysis
1 asking the 5 Why’s and translate
them into a graphical Cause &
• Define the issue or Effect (fishbone) diagram.
problem
2
This is especially helpful if you
need to go significantly beyond 5
• Ask Series of 5 Why’s Why’s or you getting multiple
3 answers per why question.

See steps further on……

• Create Cause &
Effect Diagram
4
6/28/2022 95
 Cause and Effect Diagram
Measurement Man Power Materials
Information Gas
Self
Bus Fare

Correct Change
Breakfast
Children Train Ticket

Spouse
Other Meals

Late for
Work
Radio

Gas #1 Train Alarm Clock

Battery
Weather #2
Weather Car Coffee Pot
TV

Neighbor

Bus Phone

Mother Nature Methods Machines

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 Cause and Effect Diagram
Measurement Man Power Materials

Costs
Escalating

#1
#2
Car

Mother Nature Methods Machines

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 Cause and Effect Diagram
Measurement Man Power Materials
Information Gas
Self
Bus Fare

Correct Change
Breakfast
Children Train Ticket

Spouse
Other Meals

High Staff
Turnover
Radio

Gas #1 Train Alarm Clock

Battery
Weather #2
Weather Car Coffee Pot
TV

Neighbor

Bus Phone

Mother Nature Methods Machines

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 Steps for Step 4
• You can take the results of asking the 5 Whys and translate
them into a graphical Cause & Effect (fishbone) diagram.
• This is especially helpful if you need to go significantly beyond
5 Whys or you are getting multiple answers per why question.
1. Place problem statement to the far right
2. Identify categories (legs) that might be the major
causes
3. Continue to ask questions to exhaust each major
cause leg
4. Rationalize and adjust groupings as needed

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 Examples of Cause & Effect

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 Categories for Cause and Effect
Diagrams
• The 6 M's (Recommended for manufacturing industry)
▪ Machine, Method, Materials, Measurement, Man Power &
Mother Nature.
▪ Note: A more modern selection of categories used in
manufacturing includes: Equipment, Process, People, Materials,
Environment, and Management.

▪ The 8 P's (Recommended for admin/service industry)

▪ Price, Promotion, People, Processes, Place / Plant,
Policies, Procedures & Product (or Service)
▪ The 5 S's (Recommended for service industry):
▪ Surroundings, Suppliers, Systems, Skills, Safety

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 Summary of some of the categories
Spines of a fish bone diagram labelled using various categories

• Four M’s (Manpower, Machines, Measures/

Materials and Methods)
• Six M’s (Machines, Methods, Materials,
Measurements, Mother Nature and Manpower)
• Six P’s (People, Physical evidence, Processes,
Products, and Performance Measures)

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 Summary of some of the categories
Spines of a fish bone diagram labelled using various categories
• Four P’s (Policies, People, Procedures and Plant)
adopted in Service industries.
• Eight P's (Price, Promotion, People, Processes, Place /
Plant, Policies, Procedures & Product (or Service)
recommended for admin/service industry.
– Can also add: Physical Evidence and Productivity &
Quality.
• Five S’s (Surroundings, Suppliers, Systems, Skills and
Safety).

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 Root Cause Analysis Template
• https://www.systems2win.com/solutions/r
oot-cause.htm

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 Examples of Cause & Effect

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 Examples of Cause & Effect

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 Examples of Cause & Effect

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 Examples of Cause & Effect

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 Benefits of Fish Bone Diagram
• Using the Ishikawa approach to identifying the
root cause(s) of a problem provides several
benefits to process improvement teams:
• Constructing a Fishbone Diagram is
straightforward and easy to learn.
• The Fishbone Diagram can incorporate metrics
but is primarily a visual tool for organizing critical
thinking.

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 Benefits of Fish Bone Diagram
• By Involving the workforce in problem
resolution the preparation of the fishbone
diagram provides an education to the whole
team.
• Using the Ishikawa method to explore root
causes and record them helps organize the
discussion to stay focused on the current
issues.

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 Benefits of Fish Bone Diagram
• It promotes "System Thinking" through
visual linkages.
• It also helps prioritize further analysis and
corrective actions.

• https://www.moresteam.com/toolbox/fish
bone-diagram.cfm

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 How to Apply Root Cause to W5
• Every Issue or problem that you have
identified can have one of more root
causes.
• If you have already created an ISSUE Profile,
then you can also start creating some root
cause profiles, which can later be
investigated and used for your Future Case
modelling and Business Case Presentation.
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 Recommended BML Profiles for Root Cause Analysis

Problem
Root Cause

Chronic? (Yes, No) Description

Customer Impact Type
Description Status (Real, Imagined, Just
Employee Impact Plain Stupid)
Frequency of Occurence
Potential Annual Cost
Urgency (High , Medium, Low)

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 Rood Cause Analysis Reading
• https://www.moresteam.com/toolbox/fish
bone-diagram.cfm

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PROBLEM IDENTIFICATION
Issue Analysis
Dimension Analysis

Cause & Effect Diagrams

5 Why’s
Check Sheets
6/28/2022 115
 5 WHY’s
IMPROVEMENT TECHNIQUES
PROBLEM IDENTIFICATION

6/28/2022 116
 When is 5 WHYs Most Useful?
• When problems involve human factors or
interactions, and in day-to-day business life.
• You can use the 5 Whys in troubleshooting, quality
improvement and problem solving, but it is best for
simple or moderately difficult problems.
• For more complex or critical problems, it can lead
you to pursue a single track of enquiry when there
could be multiple causes.
• Be careful of the simplicity of this technique

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 5 Why’s
• A simpler version of Root Cause Analysis, is just to
ask FIVE WHY’s (5 Why’s).
• In this technique, no diagram is needed, you just
need to write the answers down one under the
other.
• If the why’s lead to different categories, then the
Diagram can be used to categorise the problems.

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 How to Complete the 5 Why’s
1. Write down the specific problem. Writing the issue helps you
formalize the problem and describe it completely. It also
helps a team focus on the same problem.
2. Ask WHY the problem happens and write the answer down
below the problem.
3. If the answer you just provided doesn’t identify the root
cause of the problem that you wrote down in Step 1, ask
WHY again and write that answer down.
4. Loop back to step 3 until the team is in agreement that the
problem’s root cause is identified. Again, this may take
fewer or more times than five Whys.

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 Example of 5 Why’s
• Question: WHY did the associate damage his thumb ?
Answer: Because his thumb got caught in the conveyor.
• Question: WHY did his thumb get caught in the conveyor?
Answer: Because he was chasing his bag, which was on a running
conveyor.
• Question: WHY was his bag running on the conveyor?
Answer: Because he placed his bag on the conveyor, but it then
turned-on by surprise
• Question: WHY was his bag on the conveyor?
Answer: Because he used the conveyor as a table
https://www.managementstudyguide.com/five-whys-analysis.htm

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 Conclusion of the Case
• So, the likely root cause of the associate’s damaged
thumb is that he simply needed a table, there wasn’t
one around, so he used a conveyor as a table.
• To eliminate further safety incidences, we need to
provide tables at the appropriate stations or provide
portable, light tables for the associates to use and
also update and a greater focus on safety training.
• Also, look into preventative maintenance standard
work.
https://www.managementstudyguide.com/five-whys-analysis.htm

6/28/2022 121
 Conclusion Regarding the
Methodology in General
• The Five Why’s act as a powerful tool and
help in sifting through the symptoms
which represent surface level problems to
the real problem, the root cause.
• Solving this root cause solves all the
problems in between.

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 Subjectivity Involved
• The Five Whys process is only semi-structured.
• This means that if it is done by different people, they
may come to very different results.
• The process therefore is only as good as the person
running it.
• This makes it important to ensure that the team is
cross functional and really involved in obtaining best
results for the process.
https://www.managementstudyguide.com/five-whys-analysis.htm

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 Why “Why Analysis”
• Identify “no good reason” responses
• Propose changes to improve operations
• Capture “good reason” responses
• Improve business operations by Why?
• Interrogation of all 6 business
dimensions

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 Common Business Reasons
• Often the business operates in a certain way
for (forgotten) legacy reasons
• Often the reason for doing work in a particular
way is unknown or even non-justifiable
• Sometimes the way in which the business
operates is for a good reason but this has
been “lost” e.g. controls and needs to be
“rediscovered”

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 Advantages of “Why” Analysis
• BML provides a foundation/standard format for objective
discussion
• Allows SME’s to “see” the business operation (models or
Artifacts)
• Taps into “tribal knowledge”
• Usually is very insightful (even for just understanding
purposes)
• Usually (always) yields meaningful improvements
• Can be tedious!

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 Determining if Why? Analysis Applies
• Signals for Why analysis to be performed:
▪ Legacy business operation
▪ No major improvements in some time
▪ Fresh thinking is required
▪ New industry/competitive practices are
evident
▪ Industry is in a state of renewal/change/flux

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 Approach
• Select relevant objects from each dimension
for interrogation
• Decide on interrogation question set
– (Dimension Analysis)
• Decide on interrogation artifacts

6/28/2022 128
 Approach
• Select relevant objects from each
dimension for interrogation
– Skip the obvious/intuitive objects eg.
• (Activity) Open Account,
• (Info) Customer,
• (When) Financial Time,

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 Approach
Decide on interrogation question set
▪ Why do we do this activity?
▪ Why do we operate in this location?
▪ Why do we do we need this info? etc.
▪ Why does this role do this task?
▪ Why do we do this activity at this location?
▪ Why do we do this activity in this time frame?
▪ etc.

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 Approach
Decide on interrogation artifacts & modes
▪ BML Models
▪ Questionnaires (remotely?)
▪ Reports (remotely?)
▪ UML Models
▪ IEF Models
▪ Can be done in work-session mode

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 Participants for Why Analysis
• Select SMEs/participants carefully
▪ Beware of “same old, same old!”
▪ Relevant cross section
▪ Out of the box thinkers/contrarians
▪ Outside departments?
▪ Outsiders (industry experts)?

• Nothing is sacred

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PROBLEM IDENTIFICATION
Issue Analysis
Dimension Analysis

Cause & Effect Diagrams

5 Why’s
Check Sheets
6/28/2022 133
 Check Sheets
IMPROVEMENT TECHNIQUES
PROBLEM IDENTIFICATION

6/28/2022 134
 Check Sheets
• This is a simple Analysis Technique that can be used
to collect almost any type of data.
• A well designed Check Sheet is an excellent starting
point for problem identification, where raw data,
such as historical or observation data can be used as
meaningful information.
• Trends and patterns can be observed and analysed to
help in the problem identification process.

6/28/2022 135
 Uses of Check-sheets
• To observe an operation, or record specific
data overtime
• Obtaining short-term observation of process
variability on the current state of the business
• To identify potential problems to be identified
first
• To confirm the effects of a problem

6/28/2022 136
 Therefore measures Quality
BA should ask the following questions:
▪ Event occurring?
▪ Person responsible?
▪ When and where it occurs
▪ Duration?

6/28/2022 137
 Types of Check-sheets
• Tally check-sheets used to count
occurrences
• Defect Maps

6/28/2022 138
 Example: Toyota
• Check-sheets have been used successfully
at Toyota
• Functional group is responsible for
informing the rest of the company on
findings

6/28/2022 139
Example of Toyota’s Check-sheet

6/28/2022 140
 Check Sheet
By DanielPenfield - Own work, CC BY-SA 3.0,
https://commons.wikimedia.org/w/index.php?curid=9401470

6/28/2022 141
6/28/2022 142
CC BY-SA 3.0, https://en.wikipedia.org/w/index.php?curid=7753004

6/28/2022 143
 When to use Check Sheets
• Most useful when you need to gather data over a
period of time.
• Often you know that a problem exists, but not when
and where they are occurring, or how frequently.
• Once you establish a list of events or conditions, you
can use check sheets to count occurrences, measure
activities and locate defects.
• Cause and effect diagrams can be used as Check
Sheets.

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 SUMMARY – IDENTIFICATION
TECHNIQUES
• Issue Analysis using BML
• Dimension (Affinity Analysis)
• Cause and Effect Diagram
• Root Cause Analysis
• The 5 Why’s
• Check-Sheets

6/28/2022 145
 Syndicate Group - Exercise
• Using the Grower Direct Case Study &
Current State Model.
– Identify at least four business problems using
the Identification Techniques that have been
covered.
• Use Flip Charts and W5 Tool to show your
workings.
• Practice each of these techniques.
6/28/2022 146
 Business Improvement Techniques (1)
1. Problem 2. Problem 3. Decision
Identification Prioritisation Making

Issue Analysis Value Analysis SWOT Analysis

Dimension Analysis Pareto Analysis PEST(LE) Analysis

Cause & Effect Cost benefit

Diagrams Analysis

5 Why’s & Check

De Bono’s (Hats)
Sheets
6/28/2022 147
 Business Improvement Techniques (2)
4. Process 5. Process 6. Resource 7. Managing
Identification Improvement Planning the Process

Process SREDIM Capacity Performance

Modelling Framework Planning Measurement

Dimension
Flowcharting Benchmarking
Analysis (Again)

SIPOC DIAGRAMS Cycle Time Improvement

Reduction Priorities

RADAR Charts
Rhombus of
Change

6/28/2022 148
 PROBLEM PRIORITISATION

Value Analysis

Pareto Analysis

6/28/2022 149
 Problem Prioritisation

“It’s all knowing what to start with.

If you start in the right place and
follow the steps, you will get to the
right end.”
Elizabeth Moon

6/28/2022 150
 Problem Prioritisation
▪ Knowing where to start is key to problem-solving.
▪ Problems could be caused by many possibilities, and
knowing which one’s to solve first is essential.
▪ Techniques to help look at problems in different
ways are:
▪ Pareto Analysis
▪ Value Analysis
▪ Moscow (not covered)
▪ Carpenter & Carver / Prioritisation Matrix (not
covered)

6/28/2022 151
 Value Analysis
BUSINESS IMPROVEMENT TECHNIQUES
PROBLEM PRIORITISATION

6/28/2022 152
 Value Analysis
• A technique that can be used by BA’s to help identify
needed improvements in a product or process, based on
the functionality and value of each function.
• Developed during WWII because of shortage of materials
for buildings.
• Defined as a systematic and function-based approach to
improving the value of products, projects or processes.
• Also known as the value method, Value Engineering,
Value Methodology or Value Management.

6/28/2022 153
 What is Value Analysis Manufacturing
Systematic analysis that identifies and selects the best value
alternatives for designs, materials, processes, and systems.
It proceeds by repeatedly asking "can the cost of this item
or step be reduced or eliminated, without diminishing the
effectiveness, required quality, or customer satisfaction?"
Also called value engineering, its objectives are:
▪ to distinguish between the incurred costs (actual use of resources)
and the costs inherent (locked in) in a particular design (and which
determine the incurring costs), and
▪ to minimize the locked-in costs.

6/28/2022 154
 Purchasing - Example
Examination of each procurement item to
ascertain its total cost of acquisition,
maintenance, and usage over its useful life and,
wherever feasible, to replace it with a more cost
effective substitute.
Also called value-in-use analysis.
http://www.businessdictionary.com/definition/value-
analysis.html

6/28/2022 155
 What is a “Value”
• Value is a combination of benefits gained from
an activity & the cost of achieving these
benefits.
• A simple measure of value could be:
Value = Worth / Cost
• If Value is greater than 1 it is “good value”, if it is
less than 1, it is “poor value”.
• Value should be delivered at the lowest cost
6/28/2022 156
 How to do a Value Analysis
• Ask ; “What does an object do?”
• Determine the functions that have a high
cost associated with them.
• These functions will be the primary target
for redesign.
• Example: A pencil

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 Class Example
• Think of an object or a process and see whether
you can find a better way of doing it.
• Obviously the things that you want to look at
are the things you believe cost too much for
their functionality.
• These are the things that you should prioritise
as the first things to CHANGE when you are
improving a process.

6/28/2022 158
 PROBLEM PRIORITISATION

Value Analysis

Pareto Analysis

6/28/2022 159
 Pareto Analysis
IMPROVEMENT TECHNIQUES
PROBLEM PRIORITISATION

6/28/2022 160
 Pareto Analysis
• Pareto Analysis is based on the Pareto Principle
which states that, for many events 80 percent of the
effects come from 20 percent of the causes.
• Named after Vilfredo Pareto an Economics lecturer in
Lausanne in 1906.
• 20% of the people owned 80% of the wealth in Italy.
• Often called “rule of thumb”.
• Also called Pareto Chart, Pareto Principle, ABC
Analysis, 80-20 Analysis, Law of the vital few.

6/28/2022 161
 Pareto Analysis
• Examples:
– 20% of our inventory takes up 80% of your warehouse
space.
– 80% of you inventory comes from 20% of your suppliers.
– 80% of a company’s income is generated by 20% of it’s
customers.
– 80% of a company’s business will be generated by 20% of
the sales team

• Reminds you to focus on the 20% that matters.

6/28/2022 162
 When to use Pareto Analysis
• Before you attempt to solve a problem, you may
need to separate the critical few from the trivial
many causes of the problem.
• Business Analysts need to prioritise potential causes
of a problem, so it can be determined where to start.
• BA’s need to establish where the 20% cause is.
• Need data to help with this analysis – Check sheets
would be a good start.

6/28/2022 163
 Seven steps of Pareto Analysis
1. Create a table listing all the causes and their frequency
as a percentage.
2. Rank order the data in the decreasing order of
percentage of causes. (Highest first)
3. Add the cumulative percentage column to the table.
4. Plot the names of the causes of the x-axis and the
cumulative percentage on the y-axis of a graph (Put the
y-axis on the right side of the graph.
5. Join the above points to form a cumulative curve.

6/28/2022 164
 Seven steps of Pareto Analysis (Cont.)
6. Using the same graph, plot a bar chart with the same
causes on the x axis and the actual frequency on the y-
axis (on the left hand side of the graph)
7. Establish where the curve in step 5 reaches a value of
80% and draw a vertical line from this point down until
it intersects with the x-axis.

The important causes are on the left of the vertical line,

and the less important causes on the right side of the
vertical line.
6/28/2022 165
 Pareto Chart Steps

Number of To Create a Pareto

Cause
Queries chart:
Address Wrong 8 1. Total the raw data
on effect of each
Time Incorrect 20
contributor &
Rate Factor Incorrect 4 determine grand
Service Code Wrong 32 total of all effects.

Format Confusing 6
Payment Not Credited 3
TOTAL 73 Grand Total

6/28/2022 166
 Pareto Chart Steps

Number of To create a Pareto chart:

Cause
Queries 1. Total raw data on effect of
Service Code Wrong 32 each contributor and
Time Incorrect 20 determine grand total of all
Address Wrong 8 effects.
Format Confusing 6 2. Reorder the contributors of
Rate Factor Incorrect 4 the cause from largest to
smallest.
Payment Not Credited 3
TOTAL 73

Rank from largest to smallest.

6/28/2022 167
 Pareto Chart Steps

1. Total raw data on effect of each contributor and determine grand

total of all effects.
2. Reorder the contributors from largest to smallest.
3. Determine the percent of number of queries of the total
number of queries.

32 x 100 = 43.8% 4 x 100 = 5.5%

73 73
20 x 100 = 27.4% 3 x 100 = 4.1%
73 73
……… 10.9%
…… = 8.2%
6/28/2022 168
 Pareto Chart Steps

3. Determine the percent of number of queries of the total

number of queries. See calculation on previous page

Number of
Cause Percent
Queries
Service Code Wrong 32 43.8%
Time Incorrect 20 27.4%
Address Wrong 8 10.9%
Format Confusing 6 8.2%
Rate Factor Incorrect 4 5.5%
Payment Not Credited 3 4.1%
TOTAL 73 100%
6/28/2022 169
 Pareto Chart Steps

3b Determine the cumulative percent of total for

each contributor on the ranked list.
32
x 100 = 32/73 x 100 = 43.8%
73
32+20 x 100 = 52/73 x 100 = 71.2%
73
………………….. = 82%
…………………….. = 90%

32+20+8+6+4 x 100 = 70/73 x 100 = 96%

73

32+20+8+6+4+3 x 100 = 73/73 x 100 = 100%

73

6/28/2022 170
 Pareto Chart Steps

3b Determine the cumulative percent of total for each

contributor on the ranked list. See calculation on previous
slide
Number
Cause Percent Cumulative %
of Queries
Service Code Wrong 32 43.8% 44%
Time Incorrect 20 27.4% 71%
Address Wrong 8 10.9% 82%
Format Confusing 6 8.2% 90%
Rate Factor Incorrect 4 5.5% 96%
Payment Not Credited 3 4.1% 100%
TOTAL 73 100%

6/28/2022 171
 Pareto Chart Steps
Number
Cause of Percent Cumulative % To create a Pareto chart:
Queries
1. Total raw data on effect of each
Service Code Wrong 32 43.8% 44%
contributor and determine
Time Incorrect 20 27.4% 71%
grand total of all effects.
Address Wrong 8 10.9% 82%
Format Confusing 6 8.2% 90% 2. Reorder the contributors from
Rate Factor Incorrect 4 5.5% 96% largest to smallest.
Payment Not Credited 3 4.1% 100% 3. Determine the cumulative
TOTAL 73 100%
percent of total for each
Cumulative % of Total
contributor on the ranked list.
4. Draw & label the left
Number of Queries

vertical axis.
5. Draw & label the horizontal
axis.
6. Draw & label the right
vertical axis.
Reason for Customer Query
6/28/2022 172
 Pareto Chart Steps
Number
Cause of Percent Cumulative %
Queries To create a Pareto chart:
Service Code Wrong 32 43.8% 44% 1. Total raw data on effect of each
Time Incorrect 20 27.4% 71% contributor and determine grand
Address Wrong 8 10.9% 82% total of all effects.
Format Confusing 6 8.2% 90% 2. Reorder the contributors from
Rate Factor Incorrect 4 5.5% 96% largest to smallest.
Payment Not Credited 3 4.1% 100%
3. Determine the cumulative percent
TOTAL 73 100%
of total for each contributor on the
ranked list.
Cumulative % of Total 4. Draw and label the left vertical axis.
5. Draw and label the right horizontal
Number of Queries

axis.
6. Draw and label the right vertical
axis.
7. Draw the bars to represent
the effect on each
6/28/2022
Reason for Customer Query
173 contributor.
 Pareto Chart Steps

Draw the bars to represent the effect on each contributor.

35

Cumulative % of Total
30
25
20
Number of Queries

15
10
5
0
Service Time Address Format Rate Factor Payment
Code Confusing Not
Received

Reason for Customer Query

6/28/2022 174
 Pareto Chart Steps
Number
Cause of Percent Cumulative % To create a Pareto chart:
Queries
1. Total raw data on effect of each
Service Code Wrong 32 43.8% 44% contributor and determine grand total
Time Incorrect 20 27.4% 71% of all effects.
Address Wrong 8 10.9% 82% 2. Reorder the contributors from largest
Format Confusing 6 8.2% 90% to smallest.
Rate Factor Incorrect 4 5.5% 96% 3. Determine the cumulative percent of
Payment Not Credited 3 4.1% 100% total for each contributor on the
TOTAL 73 100% 100
ranked list.
90 4. Draw and label the left vertical axis.
80
5. Draw and label the right horizontal
70 Cumulative % of Total axis.
60
6. Draw and label the right vertical axis.
Number of Queries

50

40 7. Draw the bars to represent the effect

30 on each contributor.
20

10
8. Draw a line graph to
0 represent the cumulative
percent of total.
6/28/2022
Reason for Customer Query
175
 Pareto Chart Steps

100

35 90

30 80

Cumulative % of Total
25 70

20 60
Number of Queries

15 50

10 40

5 30

0 20
Service Time Address Format Rate Factor Payment
10
Code Confusing Not
Received 0

Reason for Customer Query

6/28/2022 176
 PRINTED FROM SIGMA
Pareto Chart
100%
70
90%
60 80%
50 70%
60%
Count

40
50%
30 40%

20 30%
20%
10
10%
0 0%

Category
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 Pareto Chart Steps
• Establish where the curve reaches a value
of 80% and draw a vertical line from this
point down until it intersects with the x-
axis.
• The important causes are on the left of the
vertical line, and the less important causes
on the right side of the vertical line.

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 PRINTED FROM SIGMA
Pareto Chart
100%
70
90%
60 80%
50 70%
60%
Count

40
50%
30 40%

20 30%
20%
10
10%
0 0%

Category
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 Combination of Value Analysis &
Pareto Analysis
• It might be wise to use the Value Analysis in
conjunction with Pareto Analysis, in order
to get the values for the Pareto Chart.
• These two techniques together will form a
much more reliable prioritisation of the
issues, than if they are used independently.

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 SYNDICATE WORK – PAGE 1

• Identify Several Issues from your

Assignment.
• Write these issues down as PROBLEM
STATEMENTS so that fully understand the
ISSUE. Remember that this is a SYMPTOM.
• Do a root Cause to see whether you have
identified the real causes as well.
– (Which will help you to understand the issues)
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 SYNDICATE WORK – PAGE 2

• Conduct a Value Analysis of the Issues

(Symptoms) to give them a “Numeric
Rating”
• Conduct a PARETO ANALYSIS of this.
• You can do this by hand or you can use a
SPREADSHEET to help you. (See next
page.)

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 SYNDICATE WORK – PAGE 3

• Get the trial version of Pareto Chart Excel

and use that to create the chart.
• https://sigmaxl.com/ParetoCharts.shtml?gclid=Cj0KCQjwpavp
BRDQARIsAPfTwiwb3CpWK4izcyUpLw8bSf2YJlkteSY7QRs0eDv
pC0R87OFIvL7V0zgaAshiEALw_wcB

• See Example on next page

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 Pareto Charts - Excel
• https://sigmaxl.com/ParetoCharts.shtml?gclid=Cj0KCQjwpavp
BRDQARIsAPfTwiwb3CpWK4izcyUpLw8bSf2YJlkteSY7QRs0eDv
pC0R87OFIvL7V0zgaAshiEALw_wcB

• https://www.systems2win.com/solutions/pareto.htm?gclid=Cj
0KCQjwpavpBRDQARIsAPfTwiwRyL8N9ICZjaW0A0HjT_4MH-
6gsPA4UKBZWK8Qye4LH5HxcoA1-ukaAptOEALw_wcB

6/28/2022 184
 Comments Regarding Pareto Analysis
• In the previous example, the Number of queries
must be related to the INDUSTRY.
• It could be multiplied by an IMPACT/ URGENCY /
PRIORITY Factor to get the real number.
• This should be done using your SME’s (Subject
Matter Experts) and stakeholders who know what
impact an incident will have on the organisation

6/28/2022 185
 WEBSITES
• https://managementstudyguide.com/strategic-
management.htm
• https://www.managementstudyguide.com/all-
subjects.htm
• https://www.managementstudyguide.com/business-
process-improvement-articles.htm
• https://www.managementstudyguide.com

6/28/2022 186
 Some Interesting Videos
https://www.youtube.com/watch?v=GI7lZCGTYsA (4 Mins)
Part 1: Agile, Lean, DevOps, Kanban, ATD, BDD, Cynefin – the New World for Business Analysts

https://www.youtube.com/watch?v=TRwwlrB23HU (13 Mins)

Part 2: Business Analysis Techniques Used by the Strategic Business Analyst

https://www.youtube.com/watch?v=6MINge6wQu4 (7.5 Mins)

Part 3: Business Analysis Techniques Used by the Tactical Business Analyst

https://www.youtube.com/watch?v=KeE5EaEgx7s (5.5 Mins)

Part 4: Business Analysis Techniques Used by the Operational Business Analyst

https://www.youtube.com/watch?v=hbVQ0q4k-jI (3.5 Mins)

Part 5: When Do You Do Business Analysis in Agile Projects

https://www.youtube.com/watch?v=P2KX6FSHoMA (7.5 Mins)

Part 6: The Now and Future Business Analyst Profession

6/28/2022 187
 8 lessons on building a company
people enjoy working for.
• https://www.ted.com/talks/patty_mccor
d_8_lessons_on_building_a_company_p
eople_enjoy_working_for#t-298204

(5 Minutes)

6/28/2022 188