Variance Analysis
Variance Analysis is a powerful tool in business analysis for identifying discrepancies between planned performance and actual results. It quantifies the deviation from a known baseline or expected value. This technique is leveraged to discern the root cause and degree of divergence from what was planned, thereby aiding in making informed decisions for corrective actions.
Variance in Different Life Cycles
Adaptive Life Cycle: In agile or adaptive environments, the focus is usually on delivering small, production-ready segments for demonstration and feedback. Due to this, variance analysis is not commonly used in isolation for evaluating business analysis efforts. However, some teams might use it to analyze burndown charts and assess if the observed results significantly diverge from expectations. Essentially, the designation of "done" or "not done" replaces the tracking of percent completion of product backlog items or tasks within them.
Predictive Life Cycle: In more traditional, predictive life cycles, business analysis efforts are often tracked separately. In these cases, variance analysis can provide valuable insights into discrepancies in the business analysis schedule or degree of completion. These insights might affect the selection and extent of business analysis techniques deployed, as well as stakeholder participation.
Use in Verifying Requirements
Variance analysis also plays a role in verifying requirements. If a significant difference exists between the expected format and content of a business analysis work product and the actual outcome, this technique can be employed to investigate the causes.
Use in Performance Metrics
It's important to note that while metrics related to business analysis performance can be useful, they can seldom attribute poor business analysis practices as the sole cause for project or product issues. Other factors involved in product development might equally or more significantly contribute to the observed variances.
Warnings
Caution is advised when interpreting metrics associated with business analysis. These metrics are seldom able to single out poor business analysis practices as the only contributing factor to discrepancies in project and product development.
In summary, Variance Analysis serves as a critical tool for both identifying and understanding the causes and extent of deviations in business analysis and broader project efforts, thereby facilitating the implementation of corrective measures.