MIDTERM REVIEWER IN SBA
fact observing the symptoms and hearing about
BUSINESS ANALYSIS AND FINANCIAL POLICY
BUSINESS ANALYSIS
Is a discipline approach for introducing and managing
change to organizations, whether they are for profit,
businesses, government or non-profit.
Is used to identify and articulate the need for change in
how organization work and to facilitate that change.
IS BUSINESS ANALYST RELATED TO FINANCE?
Business analyst is responsible for analyzing a
company’s technological system and business processes
as the relate to company’s operation.
The 12 Mindset of a Perfect Business Analysis
1. Focus on the business – calibrate solutions to
business goals- To excel at what you do, you
always need to start with the client and their
needs.
 Who is your client when you are a business
analyst? Is it the project manager, the developer,
the test lead, or the architect? Perhaps, a
business relationship manager, or your functional
manager?
 Your real clients are the business stakeholders
who have a problem you are helping to resolve.
Everything you do has to be done with business
needs in mind.
2. Solve the right problem - would cost more to
build or sell than its benefits
 If solving problems was easy, business analysts
would have nothing to do. In reality, when you see
an issue or your clients describe it to you, you are in
pain points.
 We cannot assume that the problem described to
us is the real issue. It may be a symptom of a more
complex problem or a pain point that has multiple
causes.
 Before forging ahead to solve a problem set in front
of you, make sure you understand it.
 Discovering the real issue may turn out to be
the hardest challenge you face when practicing
business analysis.
3. Question everything – perfectionist
 Discovery and analysis are built on the
foundation of asking questions. Ask questions
to learn, to get information, to investigate, and
to understand. Ask questions instead of making
assumptions.
 The questions you ask, and the questions you
don’t ask, have the power to influence the
success of the change.
 Your most important role as a business analyst
is not in finding answers. It’s in asking the right
questions.
4. Lead and facilitate
 As a business analyst, you have a special role.
You may not be managing people in a
traditional sense. But you are the link between
the groups of people that don’t always
understand each other.
 You are accountable for helping them
communicate, reach that understanding, and
work better together. You help manage the
relationships, explain, clarify and navigate
different opinions and agendas.
 A business analyst is a classic example of a
leader without authority, an influencer without
seniority.
 During a project, they will take on a variety of
leadership roles — planning and leading the
requirements analysis process, organizing
diverse groups, managing expectations,
helping technical and business people
communicate, training and preparing business
groups for upcoming changes.
  With a business analyst mindset, you have the
right foundation to become a true leader — a
leader who strives to do the right thing, leads
others to do the right thing, and knows what
the right thing is.
5. Analysis before synthesis; information before
requirements
 Business analysts don’t gather requirements —
that’s the biggest misconception of the
profession.
 They gather information about the current
state of business and investigate the root
causes of the problems.
 Quality business requirements are the result of
synthesis: applying business analysis
techniques to the gathered information to
create the vision of the future state.
7.
6. Uncover gaps
 Discovering gaps and inconvenient truths and is
an occupational hazard of business analysis.
Analysis activities may result in a discovery of
unexpected hidden problems that create risks
and become roadblocks to building better
solutions.
 These discoveries may be welcome or
unwelcome, depending on the timing. Early in
the project, we are more likely to acknowledge
and analyze every surprise.
 Late discoveries are unpleasant and sometimes
even shocking if they require changes to solution
design.
 It may be tempting to sweep the inconvenient
finding under the rug. The project may already
be late, or relationships already strained.
 This is the time when the business analyst
mindset plays a crucial role.
 The role of a business analyst is to analyze the
gap and help the client make an informed
decision.
 Finding a gap is a success, not a failure, as it
creates opportunities for improvement.
Simplify until nothing can be removed
 Many companies are obsessed with automation
projects as they are expected to help reduce
the cost of running business.
 As business analysts get involved in these
“automation initiatives”, they often struggle.
 Business processes tend to get more
complicated with every organizational change,
redistribution of accountabilities or new
business rules.
 These changes often go undocumented or live
on sticky notes or one-page printouts taped to
the walls.
8. Take responsibility of shared understanding the
business requirement. 

 Business analysts invest a lot of effort into

understanding the current state of business, all
its processes, terminology, and business rules.
They spend many hours with subject matter
experts, ask them questions, and produce
diagrams, user stories, documents, and tables.
 They add a lot of details, cross-reference, and tag
requirements with multi-level numbers and
identifiers.
 This work is important, and its outcomes help
clarify business requirements. But it is not
enough that a business analyst understands the 10. Be part of the solution
problem and the requirements for the future  What’s the role of a business analyst once
solution. business requirements have been analyzed and
 This understanding must be shared by all captured? Is that it? Can they move on to the
stakeholders involved in the business change, next project? While agile methodology explicitly
from executive sponsors to the development and expects everyone to work as part of the team
testing teams. through all sprint activities, in waterfall it’s not
 The communication is only as good as the always as clear.
message received. And business requirements  Even with waterfall approach, business analysts
are only as good as the understanding of play a key role in the development and roll-out
requirements by the intended audiences. of the product through the whole product life
cycle:

a) Clarify and explain requirements to everyone

9. Accept and embrace business change
involved in the development and
implementation
 Business analysts help organizations implement
changes. Requirements define what needs to b) Recognize, analyze and manage requirements
change to achieve a desired future state. changes
 Inevitably, as the analysis process results in
captured business requirements, and teams start c) Ensure that a solution design supports
working on the solution design and business needs
implementation, business systems will continue d) Oversee the design of non-technology
to change. components of the solution
 The external environment, competitive
landscape, legislative changes, and internal e) Support user acceptance testing, training, and
politics all create minor or major ripples that adoption efforts
require organizations to adjust. f) Capture and transfer the knowledge
 A business analyst can’t afford to get flustered by
change and should never take it personally.  The real measure of a business analyst’s
 Learn to expect change and master strategies for success comes from stakeholder satisfaction
handling it. with the implemented solution.
 12. Learn, adapt and thrive
 Business analysts have to learn all the time. It is
part of the job, part of the challenge, and a big
part of the attraction.
 Every project, every change, brings something
new and unique to the business. To be
successful, business analysts must be able to
enjoy and welcome the new and the unknown,
be ready to learn and adapt.
 Throughout their career, they will be able to
expand their professional knowledge in many
directions:
a) New industries
b) Business disciplines (finance, human
11. Expect human behavior from human being  resources, marketing, or operations
 While the business analysis profession is management)
closely associated with information c) Technologies and software products
technology, it is based on a lot of social d) Data management, analytics and business
activities and interactions. intelligence
 As a business analyst, you work with people e) Product development methodologies
to help solve problems created by people to f) Architecture frameworks and modelling
build solutions that will be used by people. g) Software design principles and quality
 People are not always predictable. Dealing assurance methods
with them will have an element of h) Leadership, negotiation, and conflict
uncertainty. They have fears, biases, and resolution
emotions. i) Business analysis tools & techniques
 They will have their good days and bad days, j) Project management, communications, and
and sometimes they will go back on their training skills
word or change their mind when it’s most k) The breadth of new skills and domain
inconvenient. expertise that a business analyst can acquire
 Business analysts may need to deal with on the job will generously open a wide
difficult situations and difficult people. It will selection of further career choices for them.
require perception, empathy, intuition, and And thus, the principles of the BA mindset
the ability to look beyond petty and trivial. It will support business analysts in their
will require a business analyst mindset. professional development and finding true
job satisfaction in this rewarding career.

Problem scenario A
Problem:
Stakeholders disagree on a vital point, and the side with
higher authority is winning even though it does not
have a solid argument.
Challenge:
Challenging authority is intimidating. Stepping in
between two parties that are disagreeing and taking on
a referee role can be emotionally taxing. A business
analyst is unwilling to arbitrate or wants the sides to
settle their differences themselves.
Constructive business analyst mindset:
 The opposing sides may not be willing or ready to
settle their differences on all points, but business
analyst should help facilitate consensus on the
particular questions relevant to the project.
 The consensus should be based on facts and
analysis, use real business data to validate
assumptions and an objective evaluation of pros
and cons to avoid subjective decisions. This will
require diplomacy, assertiveness, and objectivity
under pressure.
Problem scenario B
Problem
 An executive request that does not makes
sense, is eating up too much time or takes
business requirements in the wrong direction.
Challenge:
 Managing stakeholder relationships is tricky,
especially with the most powerful stakeholders.
Sometimes a business analyst does not have
access or a line of communication to these
stakeholders, and may not even have an
opportunity to challenge or question the
requirements.
Constructive business analyst mindset:
 Occasionally, such request may turn out to be a
misunderstanding, a case of a broken
telephone, or a question that is misinterpreted
as a request by an overzealous team member.
Asking for clarification and rationale works most
of the time if requested politely and
respectfully. A request for clarification may
need to be brokered or a line of communication
created. This is a case where rational
persistence pays off.
 A business analyst needs to know the “why”
behind the requirements, so that she can
facilitate shared understanding of these
requirements and support determining the best
solution. This should be a sufficient justification
for a conversation with the stakeholder who put
forward the requirements in question.
FINANCIAL POLICY
Financial policies refers to policies related to the
regulation, supervision, and oversight of the financial
and payment systems, including markets and
institutions, with the view to promoting financial
stability, market efficiency, and client-asset and
consumer protection.
WHAT FINANCIAL POLICIES SHOULD A COMPANY
HAVE?
Here is a list of financial policies and procedures you
should have in place.
 Division of Duties.
 Authorizations.
 Receipts/Disbursement Procedures.
 Payroll.
 New Vendors.
WORKING CAPITAL FINANCING POLICY
 Working capital financing policy basically deals
with the sources and the amount of working
capital that a company should maintain. A firm
is not only concerned about the amount of
current assets but also about the proportions of
short-term and long-term sources for financing
the current assets.
 The methods businesses use to raise money.
Maturity matching : Also known as “Hedging Policy” or WORKING CAPITAL FINANCING POLICY
“Moderate Approach”. This strategy ensures that the
 Aggressive matching : Involves the maximum risk,
current assets of a company are always in sync with
and thus, also bring the potential for multiplied
short-term liabilities.
growth. Companies ensure their current assets,
In essence, this working capital financing policy aims to such as the value of debtors, are minimized by
balance the two extreme strategies, both in terms of ensuring timely payments or minimum credit sales.
risk and growth potential. Matches the maturity of the
 At the same time, management also maintains that
assets with the maturity of the financing.
payments to creditors are delayed to the furthest.
Uses short term (temporary) capital to finance
some permanent assets.

 Conservative matching : An organization

undertakes this strategy only when it requires
minimizing risk to the furthest.

 Under this policy, the management regulates the

credit limits stringently to ensure low risk. Uses
long-term (permanent) capital to finance some
temporary assets.

  

Long-term financing= Non-current assets + Permanent

Working Capital

Short-term financing=Temporary Working Capital

WORKING CAPITAL REQUIREMENT

Under a conservative approach, the working capital you

need to maintain is substantial as it involves the
provision of idle capital for exigencies.  
Under an aggressive strategy, the working capital Long-term financing= Non-current assets + Permanent
requirement is notably low, which speaks to high risk, Working Capital
but the cost is saved. When considering the hedging
policy, this factor is neither too high, nor too low. Short-term financing=Temporary Working Capital
COMPARISON OF WORKING CAPITAL FINANCING
POLICIES

Liquidity

 While following an aggressive strategy, liquidity is

usually low since short-term funds are primarily
used to finance both fixed and fluctuating current
assets. A company is thus left with minimal idle
funds. 

 Conversely, in the case of a conservative strategy,

liquidity is usually high. It is because companies
mainly use long-term sources of finance, which
leaves them with sufficient idle funds to address
emergencies. 

 Hedging strategy involves moderate liquidity,

ensuring a balance between idle funds and their
cost.

Profitability

 In a conservative approach, interest cost is higher

compared to the other two working capital
policies.

 Thus, naturally, it lowers profits. In general,

aggressive policies offer the highest returns since
the cost involved is kept to a minimum.

 As you can guess, in observing the matching

strategy, profits generated are moderate.

WORKING CAPITAL REQUIREMENT

 Under a conservative approach, the working

capital you need to maintain is substantial as it
involves the provision of idle capital for
exigencies.

 Under an aggressive strategy, the working capital

requirement is notably low, which speaks to high
risk, but the cost is saved.

 When considering the hedging policy, this factor

is neither too high, nor too low.