Do you know the very best technique to gain firsthand business experience?

It’s very natural for ambitious business analysts to want to learn more about business. Because only when we understand companies better, we can help them be better. There is a technique to do that, and we will learn that technique in this blog called Observation.

And before we get into this particular technique by the name Observation, let’s take a look at our project Context video so we can see how this technique was applied to our project context. And you, of course, can also apply this technique to your work environment.

Observation technique elicits information by observing activities and their contexts. This is extremely helpful when developing solutions which involve physical operations such as a factory, or a warehouse.

There are 2 types of observations:

Active/Noticeable observation– Ask questions during process. Interrupts workflow but helps in gaining a quick understanding.

Passive/Unnoticeable observation – Ask questions at end. Do not interrupt work.

Possible variations of observations are:

  • Ask actor to perform specific task.
  • Do actual work to get a hands-on feel – Limit this to activities appropriate for a non-expert to perform and whose results would not negatively impact business.
  • Becoming temporary apprentice.
  • Recording video and viewing it with observed person to get further details. check out business analyst and business analyst interview questions articles

Steps for observation

  • Have a clear and specific objective.

Prepare for observation

  • Determine activities to observe.
  • Identify sample users (e.g. Experts and novices or just experts) to observe.
  • Prepare observation questions.

Conduct observation session

  • Explain reason for observation. Assure participants that the sole purpose is to gather requirements and only to study the processes.
  • Inform users to stop observation process if it interferes with their work.
  • Attentively watch activity.
  • Record what you see, time taken, quality of work, process anomalies etc.
  • Ask questions while work is being performed or after observation session.

Confirm observation results

  • Review notes and recorded data.
  • Follow up to obtain further clarification.
  • Share notes and data with participants to ease any concerns that they may have.
  • Validated notes and data are collated with other related observations.
  • Findings are summarized, analyzed and opportunities for improvement are communicated with stakeholders.

Strengths

  • Documenting details about current processes.
  • When project’s objective is to enhance or change a current process.
  • When stakeholders are unable to express requirements well.
  • Provides realistic and practical insight into business processes.
  • Productivity can be directly viewed and compared with standards or performance metrics.
  • Identify non-documented informal tasks or work-around.
  • Recommendations for improvement are based on evidence.

Limitations

  • Possible for existing processes only.
  • Time-consuming and can be disruptive.
  • Participants may alter work practices when observed.
  • Can’t evaluate knowledge-based activities.

Example:

Observation -IT Asset Reconciliation Process

Governance, Risk and Compliance (GRC) management system is developed for the IT and ITES domain. The primary objective of GRC management system is to help companies implement Governance, Quality, and Information Security Management Systems in an integrated manner. It has various features, one of which is to plan and track projects and programs using standards such as CMMI, ISO 9001, ISO 27001 etc.

As part of the compliance requirements, organizations need to take stock of their IT assets. The narration provided here is an observation of the IT Asset Reconciliation process that the BA had along with the inventory team. The objective of this process is to periodically conduct a complete count of the inventory. This is usually carried out at the end of a month, quarter, or year, to coincide with the end of a reporting period. Considering the effort spent on counting and obtaining accurate data of the assets, the number of times this process is carried out is limited in a year.

On 1st of May, 10:00 am, James, the stock control auditor provided me a brief explanation of the objective of the process and some of the activities which are typically carried out prior to the actual day of counting. He told me that the whole process would take 4 days to complete with few days gap in between.

Around 10:30 am, James ordered sufficient number of two-part count tags for the amount of inventory expected to be counted and numbered them sequentially in order to track them individually as part of the counting process.

On 8th May, 10 am, James and his assistant Robert reviewed the inventory prior to the scheduled inventory count date. James asked the warehouse staff to make necessary corrections for those items for which the parts were missing and were not properly boxed/ bagged.

Around 2 pm, James and Robert started pre-counting the inventory. They counted the items which could be placed in sealed containers, after which they sealed them in the containers and marked the quantity on the sealing tape.

James informed me that this activity made the counting task much easier during the actual count. If a seal was broken, then they would know that they had to re-count the contents of the container.

This task got over around 4 pm.

On 9th May, 10 am, James completed pending data entry transactions. This included transactions for issuances from the warehouse, returns to the warehouse, and transfers between bin locations within the warehouse.

Around 12 pm, James notified the outside storage locations holding the company inventory on consignment to count their inventory on hand as of the official count date which would be 12th May. He also told them to forward this information to the warehouse manager.

Around 4 pm, James instructed the warehouse to freeze their activities. He informed the warehouse manager to stop all deliveries from the warehouse, and also segregate all newly-received goods where they will not be counted.

When I asked him why the warehouse activities were frozen, he informed me that if this activity was not done, the inventory records would be in a state of flux during the inventory count and would not be entirely reliable.

On 12th May, 10 am – the day of inventory counting, James formed two-person counting teams and instructed them on their counting duties. These duties involved having one person count inventory while the other person mark down the information on a count tag. One copy of the tag was affixed to the inventory, while the team retained the other copy.

Around 10:15 am, James issued blocks of count tags to the count teams. Each team was responsible for returning a specific numeric range of count tags, whether or not the tags were used.

James told me that maintaining control over all count tags would ensure that lost tags would be investigated promptly.

After this, each count team were assigned a specific range of bins and James highlighted those locations on a map of the warehouse. He also maintained a master list of which areas of the warehouse have been counted, and which teams have been assigned to each area.

I also observed that one person on each team counted a specific item within a bin location, and the other person marked the bin location, item description, part number, quantity, and unit of measure on a count tag. The team then affixed the original copy of the tag to the inventory item and retained the copy.

Upon completion of a count area, each count team returned to James, who verified that all tags were returned. He also checked the map to see whether there were other areas of the warehouse which had to be counted and assigned the teams to the new areas and issued them new blocks of count tags as necessary.

James then entered the tag information into an online data entry form. Upon completing the data entry, he printed a report showing all tag numbers entered, sorted by tag number, and looked for any gaps in the numbers. He investigated any numbering gaps that he came across and ensured that all count tags issued were included in the file.

The day came to a close at 6 pm. James informed me that he would investigate a few unusual results that he came across the following day.

I thanked James for taking me through the entire process of counting inventory. I was glad that observing the entire process had given me a good idea of how the asset management module of the Governance, Risk and Compliance (GRC) management system should be developed.

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