An in-house business analyst isn’t just a luxury afforded to successful Fortune 500 companies. These knowledgeable experts can help even the smallest enterprises become more efficient and successful.
But how do you know whether you need an analyst? There are pros and cons of hiring these experts full-time. We’ll explain some of the benefits and downsides of having a business analyst on staff and help you decide which business strategy is best for your company.
What Does a Business Analyst Do?
Business analysts help enterprises incorporate new technologies into existing systems and ensure that everything operates smoothly. They are essentially specialized project managers who have a deep knowledge of technical systems and data analysis best practices. Some analysts manage projects themselves, whereas others oversee the project manager’s tasks and focus on the bigger picture.
In-house business analysts are salaried employees who work on projects full-time. This differs from outsourced business analysts who work for third-party IT firms. If you hire a third-party analyst, you pay the firm a monthly or annual fee (not a salary) to use the analyst’s services.
Whether you hire someone in-house or use a third-party service, good business analysts are important. They not only understand how technology works but can also decide whether that technology is an appropriate fit for your business. Additionally, hands-on analysts may handle operational details like infrastructure, IT staffing needs, and internal communications. It’s a complex job that only a limited supply of qualified people can do well.
A business analyst’s job may include many roles and responsibilities, such as:
- Assessing the efficacy of the company’s existing technology
- Creating a detailed business strategy to drive the company forward
- Finding new technologies or systems that improve efficiency
- Using data analysis and models to predict how new systems will impact the company
- Setting clear operational goals
- Overseeing staff training
- Hiring new IT staff or negotiating contracts with IT staffing firms
- Deciding which software and hardware to purchase
- Integrating new technologies
- Documenting and tracking changes
- Communicating with stakeholders and upper management
- Constantly reassessing systems and making improvements
This is why many enterprises find business analysts so valuable. They take ownership of complicated technical projects and lead teams to success. However, deciding between an in-house or third-party business analyst can be a challenge. There are pros and cons of having an in-house analyst on staff. This guide will help you decide whether you need a full-time business analyst on your team.
The Pros of Hiring an In-House Business Analyst
In-house business analysts can add a ton of value to a company. Some of the most notable benefits of hiring an in-house business analyst are:
- Lower operational costs. The main reason why enterprises hire in-house business analysts is because they can save the company money. Part of their job is to find places to cut costs and maintain a lean budget. They also reduce costs by ensuring that projects are done correctly the first time, so you won’t waste money on repairs, last-minute changes, or relaunches. Additionally, analysts are experienced with managing IT departments, so they keep your IT staff on task. You’ll get higher-quality work out of your salaried employees for the same cost.
- Faster and higher returns on investment (ROI). Your profit margins will likely increase with help from a business analyst. They accomplish this by improving operational efficiency and speed, only choosing to work on projects that they know will be profitable, and finding the most cost-effective tools to complete the project. You’ll see results faster.
- Greater employee satisfaction. Unorganized office spaces are stressful environments. Without a clear leader, IT departments can feel isolated from the rest of the company. It’s hard to stay on task and feel motivated when workers aren’t sure what they’re supposed to be doing or why their work matters. Business analysts solve this problem by stepping in as leaders and holding workers accountable. Effective business analysts communicate why certain tasks are important and help employees feel part of the process.
- Improved communication between IT and upper management. Many managers don’t understand how technology works and, as a result, they’ll accidentally cut important IT resources from the budget. This puts strain on the relationship between IT and management. The IT department won’t have the tools they need to do their jobs and management will feel frustrated that the IT department isn’t working fast enough. Business analysts speak the IT department’s language, so they’re less likely to make this mistake. They understand how the technology works and which tools are essential to keep. Analysts are also savvy business leaders. They can talk about sales funnels and ROI with stakeholders just as effectively as they talk about cloud computing and predictive modeling with IT staff. They make sure everyone’s on the same page.
- Easier scalability. With help from a business analyst, you can pivot to a new strategy as quickly as possible. Great analysts won’t hesitate to change direction if they think it will lead to greater profits or efficiency. Your business will evolve with the times and stay on top of important tech trends.
Almost all of these benefits also apply to third-party business analysts. The only difference is that third-party analysts usually don’t perform their tasks onsite. They manage teams remotely or assign tasks to their own IT experts. It comes down to personal preference. Some business owners prefer to work with analysts onsite throughout the work day, whereas others simply want to see results. Both types of analysts provide the same level of care and attention to detail.
The Cons of Hiring an In-House Business Analyst
Hiring an in-house business analyst isn’t necessarily the best choice for every company. Not only do some analysts lack the experience and leadership skills required, but a full-time analyst may not be in the budget for smaller enterprises.
Hiring an in-house business analyst isn’t as beneficial if:
- Your company doesn’t have any IT infrastructure. An in-house analyst can help you create an IT department from scratch or outsource your IT staff, but this is difficult. It may take longer to complete projects.
- The analyst doesn’t have a clear strategy. Before you hire an in-house analyst, make sure that they have a detailed methodology or plan. They should have qualification measures, training tools or templates, quantifiable ways of tracking results, and defined goals for everyone they will supervise. You should never have to supply these systems or tools for the analyst—it’s their responsibility to handle these details.
- The analyst doesn’t understand your industry. The insurance and banking industries in particular are quite complex. These types of businesses don’t just provide products to customers. They also have to assess risk and comply with strict data security guidelines. If you hire an in-house business analyst, check that the analyst has worked in your industry before or clearly understands the challenges that are specific to your field.
- You have a very limited budget. A skilled business analyst may expect a competitive salary and benefits package. Top analysts earn $80,000 per year and up. However, the average salary is about $59,000 per year. This is well worth the investment for most companies, as the analyst can save you more money than you’ll spend on their salary. Still, this is a steep price for some smaller enterprises, especially those with very few people on staff full-time.
- You change direction infrequently. Some industries are slower to change than others. While all businesses benefit from routine business analysis and business intelligence (BI) audits, you may only have to do this once every year or so. Hiring a full-time in-house analyst may not be the best choice in this situation because the analyst won’t have enough to do. In this case, it’s wiser to hire a third-party consultant for one-off projects or occasional audits as needed.
Not every company needs a full-time business analyst on staff. The good news is that you have a lot of options, even if you choose not to hire a salaried analyst. IT consultant firms that specialize in business analysis and BI strategies can help you achieve the same results as a full-time analyst, often at a lower cost.
Do You Need an In-House Business Analyst?
Whether to hire an in-house business analyst depends on a number of factors, including your industry, budget, short-term goals, and long-term goals. In general, if you have a large in-house IT department and want to manage multiple projects at the same time, then an in-house business analyst can be very beneficial. The analyst will help you get your IT department organized and keep all of your projects on track. The analyst can also work closely with a third-party IT firm to complete projects quickly and efficiently.
However, if you prefer to focus on just one project at a time, or you don’t have a large IT infrastructure in place, outsourcing your business analysis is a better option. You can hire a third-party business analyst that provides managed or professional services. Some analysts offer their professional services for one-off projects that you pay for per project or by the hour. Another option is to hire a third-party IT firm that has business analysts on staff. The firm’s business analysts communicate with you and direct their IT teams to complete tasks. You get all of the benefits of a large IT department without having to manage it or hire full-time employees
Regardless of which option you choose, thorough business analysis is essential for every company. When you assess your technology strategy and find ways to make your system more efficient, you’ll reap some fantastic rewards.
To learn more about the business analysis services we provide, contact Tek Leaders today. We offer multiple options, including business strategy consultations, full business intelligence audits, and managed IT services. If you have more questions about our team’s expertise, you can reach us by email directly.
Shashank Reddy Tummala.