How can you use needs analysis to reduce costs and risks in business analysis?

In the realm of data analysis, needs analysis is a pivotal step in any project. For instance, consider a data analyst tasked with optimizing an e-commerce platform. Needs analysis would involve engaging stakeholders, like marketing teams and website users, to discern what data they require to enhance customer experiences and drive sales. By thoroughly understanding the data needs and objectives, the data analyst can tailor their analysis to generate actionable insights that align with the stakeholders' goals. This process ensures that data-driven decisions are not only relevant but also valuable in achieving the desired outcomes, be it improving user engagement or increasing revenue

Looking deep into the definition and real use of a business analysis, it brings us close to what a need analysis is, which defines problems and identifies causes to this problems with the main aim to find solutions. So how do we identify this gaps?by identifying what is happening in the organisation to what should be happening and to really see what's preventing it, business analysis looks at the organisation at large, and to conduct the need analysis within a business analysis it involves stakeholders, which are the customers, investors, competitors, regulators etc. So the need analysis reduces costs and risks in the business analysis by looking and going straight forward on what is needed by stakeholders in the means of WHY HOW AND WHAT..

When embarking on a needs analysis, remember that stakeholders include anyone who touches or is impacted by the project in any way. Given the diverse backgrounds and roles of stakeholders, they'll inevitably bring different needs and perspectives.

The best need analysis I came across in the book, “Good to Great”. In my words, it says - expense should get incurred only if it passes 3 criteria 1. It’s for ‘What we are deeply passionate about’ 2. It’s for ‘What drives your economic engine’ 3. It’s for ‘What you can be the best in the world at’ Rest of the expenses that doesn’t meet above criteria should get thoroughly reviewed and discontinued without further delay. Value of expenses should not be the criteria for exclusion. It should be treated same even if values is small. The reason is it’s not about saving costs, It’s more about sending the message to stakeholders including employees that organizations is committed to spend money ONLY if it fulfills the purpose.

Need analysis eliminates the non productive cost and ensures that resources are allocated that contributes directly to purpose. It also ensures that entire organization appreciates growth mindset and continues improvement to maximize value for shareholders. Need analysis is not an one time activity. It’s a continuous thinking on the relevance of cost getting incurred. However it shouldn’t be just limited to the senior management as every expense doesn’t go through them. The whole team should get educated on the purpose and need to perform analysis while incurring expenses.

Efficient resources allocation based on the needs analysis ensures that the right resources are used in the right places, reducing waste and redundancy. Needs analysis is an iterative process. Regularly assessing and adapting to evolving needs can help a business stay agile, minimize costly inefficiencies, and keep risks in check. Data-driven decision-making reduces the risk of making costly errors based on assumptions or guesswork. Prioritise requirements based on business objectives and stakeholder needs, focusing resources where they matter most. Needs analysis enables you to perform cost-benefit analyses for different requirements.