In today’s highly competitive marketplace, companies cannot merely offer up goods and services and leave it at that. To keep up with the litany of hungry upstarts and handful of established giants found in most industries, businesses must continually seek out ways to streamline their processes, trim waste and increase profitability.
While doing this probably seems like a no-brainer, this type of analysis isn’t often what entrepreneurs or managers necessarily know how to do—or have the time to do while in the thick of handling the day-to-day operations. For this reason, companies often keep professionals on staff or hire outside consultants to spot problem areas and propose solutions. While their specific job titles may vary from organization to organization, these analytical problem-solvers fall under the umbrella term of “business analyst” and can play a critical role in helping organizations save time and money.
If this sounds like the type of work that you could really thrive in, you’re probably wondering what it takes to become a business analyst. In this article we’ll dive into what this broad role typically entails as well as the skills and training needed to be effective.
What is a business analyst?
Simply put, a business analyst is a person who thinks about how a company works by analyzing any number of factors that impact profit and loss. Business analysts can look at costs and expenditures at any level of the company and look for patterns and trends that might help save the company money. Similarly, they can monitor processes and examine data to see areas where workflow could be improved to increase productivity.
As you might imagine, business analysts can prove themselves useful in a wide variety of industries and settings.
“Any industry can technically employ a business analyst, but most of the jobs are in consulting firms as well as IT companies,” explains Avner Brodsky, CEO and founder of Superwatches. “Companies that deal with accounting, market research and financing would also likely hire a business analyst.”
What do business analysts do?
Business analyst roles vary from company to company, depending on what the organization’s needs and goals are.
Data is big for business analysts. They must have strong analytical skills as they interpret information to identify trends or patterns. For example, is an outdated inventory management system causing shipping delays and harming customer retention? Being able to spot where things may be going wrong and the potential downstream effects is a big piece of the puzzle. These trends and insights are then used to tell a story in the reports produced and presented by business analysts to key stakeholders.
“Sometimes they use qualitative analysis techniques, such a forecasting, to forecast future events and trends for a company,” says Jenna Lofton, the owner of StockHitter, who employs a business analyst on her team. “This type of analysis can help managers decide whether a proposed course of action is likely to be successful or not.”
Keep in mind, though, that the title of “business analyst” is broad and an analyst’s specific duties will depend on an employer’s definition. Some business analysts’ work focuses more on conducting research and producing reports, while others specialize in interpreting the data and crafting solutions and recommendations based on their findings. Others may be tasked with projecting the viability of a new product offering or determining financial risk.
“In banks, for example, business analysts study loan applications and credit card applications to determine whether a borrower or credit card applicant is likely to pay back a loan,” explains Lofton.
Similarly, a business analyst working for a retail company might analyze consumer habits, tracking where people are most like to shop and what kinds of promotions bring them into the store.
Information technology departments are another area where tech-savvy business analysts can put their skills to work. This too can take on a lot of forms, but typically revolves around finding ways to use (and implement) technology systems to improve efficiency, profitability or other key business metrics.
“They serve as the liaison between the business and the technology department,” says Jessie Lee Perez, business analyst and founder of Joy Empowered Life.
What types of skills and education do business analysts need?
“The best skill a person can have in the role as a business analyst is the ability to actively listen,” says Perez. “You deal with a lot of different people in this role. Knowing when to listen and when to ask questions is crucial.”
Successful business analysts are also typically good with numbers and enjoy taking information and translating it for others so they can see the potential value in a decision. Being detail-oriented and accurate is essential.
“A successful analyst is equipped with the ability to see the big picture and offer solutions that are feasible for the stakeholders of the company,” says Brodsky.
Communicating the analysis is another key aspect of the job. Not all managers or stakeholders are going to be numbers-oriented people, so it’s essential that a business analyst can write clear reports and explain and interpret what the data show.
“It’s important to have a broad knowledge of the business world and how different parts of an organization interact,” says Lofton, adding that she believes business analysts cannot be effective if their perspective is trained on spreadsheets and databases—there’s a human element to account for.
“Business analysts who spend all their time working at computers may miss out on all the interesting aspects of business life,” explains Lofton. “Dealing with people face-to-face, analyzing data from physical documents rather than electronic files, understanding office politics.”
Because of the wide range of businesses requiring these advanced analytical and problem-solving skills, there’s no one defined route to becoming a business analyst. That said, aspiring analysts will likely need a college education to qualify for these roles. We used job posting analysis software to examine over 254,000 business analyst job postings from the past year and found that over 90 percent were seeking candidates with a Bachelor’s degree at minimum, and just over 24 percent preferred candidates with a Master’s degree.1
How do I become a business analyst?
Now that you have a better idea of what the job entails and what it takes to be successful—let’s get down to the process of becoming a business analyst.
Unfortunately for those who like clear, step-by-step processes, there’s no one true path to working in this role. To analyze and solve some of the big-picture problems facing a business, you’ll certainly benefit from having practical experience—a solid understanding of how businesses operate across departments never hurts.
As for education at the undergraduate level, starting with a balanced, all-around business degree like a Business Management degree can also help lay a solid foundation to build upon. For those who’d like to pursue a tech-focused business analyst role, a bachelor’s degree in Information Technology Management could also provide a great jumping-off point. At the graduate-degree level, a Master in Business Administration can be a great way to round out senior business, leadership and communication competencies.
What’s your next step?
If you’ve got a mind for analysis and a talent for problem-solving, a business analyst career could be a good path to investigate. If you’re ready to become a business analyst, your next step will vary with where you’re at in your education and career.
The good news is that no matter where you’re at in this journey, Rasmussen University has a program that can help position you for success. If you’re just getting started in your education, check out the Business Management program page to learn more about your undergraduate options. For those looking to expand their leadership expertise, learning more about the Rasmussen University Master of Business Administration (MBA) degree program may be the perfect next step.
1Burning-Glass.com (analysis of 254,298 business analyst job postings from August 1, 2020 – July 31, 2021.)
