Over the last few years, the generic job title of business analyst has become popular in multiple industries. Although job duties can vary immensely, in the most general terms, business analysts work within a business or organization to identify and implement improvements to help a business achieve its goals. The title of business analyst can describe both entry-level workers and tenured professionals and compensation varies accordingly. This article discusses the work, compensation, and outlook for business analysts.
The Basics of Business Analysis
Business analysis is a disciplined, structured, and formal approach to analyzing a business process, identifying improvements, and implementing changes so that the business can better achieve its goals. It is based on facts, figures, and observations.
The International Institute of Business Analysis provides this job description, “A business analyst works as a liaison among stakeholders to elicit, analyze, communicate and validate requirements for changes to business processes, policies and information systems. The business analyst understands business problems and opportunities in the context of the requirements, and recommends solutions that enable the organization to achieve its goals.”
Business analysts can serve in many functions in almost any industry. For example, a systems analyst is a business analyst that focuses on how to best use technology to solve problems and improve outcomes. Other job titles where an employee perform business analysis include data analyst, solutions provider, change agent, requirements manager, specifications writer, researcher, product owner, product manager, or management consultant.
Business analysts may perform quality assurance, requirements gathering, documentation, or client support. They may also specialize in improving sales, by focusing on pre-sales, customer service, client relationship, and account management. Business analysts may also be very internally focused on process improvements within an organization and coordination across multiple departments and stakeholders.
Some qualities of a good business analyst include the following:
• Good listening skills
• Openness to change
• Adept in multitasking
• Expertise in prioritization, based on needs of multiple stakeholders
• Good negotiation skills, to seek timely buy-in on important decisions and prioritization from all stakeholders
• Identifying process improvement opportunities which can lead to efficiency and output improvements
Education and Career Path of Business Analysts
A bachelor’s degree or higher is required. Possible majors include finance, technology, management, and accounting. Because of the number of skills required, most business analyst positions are not open to new college graduates. Most business analysts attain their first position after a few years in a related position such as data analyst, functional analyst, systems analyst, business requirements analyst, or financial analyst.
The career path of a business analyst can include becoming a senior business analyst, a business analyst specialist in specific areas (such as SAP, Agile, or ScrumMaster), a business manager, a business architect, an enterprise architect, and finally a director or VP-level position. Other experienced business analysts become independent consultants, taking assignments on contract.
Almost any industry can employ business analysts, but most jobs are in information technology or management consulting firms. Other industries include accounting, investment banking, finance, and market research.
Salary and Compensation for Business Analysts
Compensation varies widely and is determined by the factors like location, experience level, and industry. For example, a business analyst working in a large New York-based investment bank will earn more than a business analyst performing market research for an automobile company in Michigan. Candidates who specialize in a specific technology (like SAP) may command higher premiums. Below are the average salary ranges and bonus percentages for business analysts.
- Entry Level: $40,000 to $70,000 with up to an 8 percent bonus
- Mid Career: $55,000 to $95,000 with up to a 10 percent bonus
- Senior Level: $70,000 - $150,000 with up to a 10 percent bonus
- Overall U.S. Average: $45,000-$110,000 with up to a 10 percent bonus
The Bottom Line
Business analyst is a general title for many different job functions in almost any industry. A good candidate should have an undergraduate degree and several years of work experience in the area of business analysis that he or she is interested in. Candidates can also take business analysis certifications courses like those from the International Institute of Business Analysis.