Problem statement as a method to accurately describe a problem and develop effective solutions to it

The traditional role of a business analyst is to support the change process at a company. One of their main tasks is to identify problems and develop solutions to solve them. The gap between where the company is and where it wants to be could be seen as a good starting point when they begin their work. Despite how they may view the situation from a subjective perspective, the goal of an analyst is to describe the target state as closely as possible in order to then develop the best possible solution for the given problem. Over the years, a number of methods and approaches have been developed to detect and solve issues like this at companies.

I would like to present the problem statement as a method that I believe is the ideal way to get a good overview in a short amount of time. In our day-to-day lives, it is important in many cases that we find a solution to a problem quickly.

Problem statement – what is it?

Describing a problem can prove difficult for many stakeholders, since in most cases the real issue has not been properly identified, which can make the task of developing a good solution even harder. Even if the ‘perfect’ solution is developed to a poorly and/or incorrectly defined problem, the outcome may be unsatisfactory. This is one of the criteria that determines the quality of the problem solvers’ work, which is why it is very important to understand the problem as best as possible.

The problem statement addresses this specific issue. It consists of a series of questions that must be answered both with regard to the actual state and the target state.

• 1. What happened?
• 2. How often does it happen?
• 3. How bad is it? (this includes the impact on process times, costs, turnover, quality, reputation, productivity as well as from a regulatory perspective)
• 4. Who is affected?
• 5. When does it happen? Since when does it happen?
• 6. By when does it have to be resolved?
• 7. How does it manifest itself?

Here is a practical example for you. Imagine that we are working on a project at a bank and are asked to analyse a conversion problem during the account opening process. The questions would then be as follows:

The current state: identifying the situation as it now stands

• What is happening? Customers often break off the account opening process, especially when they reach a certain step in the process.
• How often does it happen? In around 30 per cent of cases, customers do not complete the account opening process.
• How bad is it? High abandonment rates have a negative impact on conversion rates, result in a loss of sales and have the potential to harm the company’s reputation.
• Who is affected? Potential customers who decide against opening an account and the company that is deprived of potential revenue.
• When does it happen? When did this problem arise? The problem has existed for some time and abandonment rates have not fallen significantly in recent months.
• How does it manifest itself? An assessment of the analysis data shows that it is possible to identify the step at which the most customers abandon the account opening process. Customers also complain about difficulties they experience at this point.

The target state: higher conversion rates in the account opening process

• What needs to happen? Customers should be able to complete the account opening process without unnecessary disruptions, especially in the step identified as problematic.
• How often should it happen? The aim is to reduce the abandonment rate by at least 20 per cent and improve the conversion rate.
• How bad is it, or rather: how big are the potential gains? If improvements are made, this could lead to a significant increase in conversion rates and a potential rise in sales amounting to several hundred thousand euros per year.
• Who is affected? The entire company benefits from higher conversion rates. The account opening process is smoother for customers.
• When does it happen? Since when does it happen? By when does it have to be resolved or should it be resolved? The solution should be implemented as soon as possible so that the effects of the changes can be felt immediately.
• How do we know that we are done? Abandonment rates should drop sharply, especially during the identified phase. Customer complaints should also decrease and conversion rates should increase.

The standard approach to business analysis consists of three phases: identify problems, develop solutions and lastly implement the best possible solution or support its implementation. The first two steps in particular can be challenging if it proves difficult to develop the solution because not enough time has been spent defining the problem beforehand.

In situations like this, best practices can be of great use as a general guide. In view of this, the problem statement as an aid in the operational/tactical field of activity of a business analyst is also a welcome addition that has proven its value in my view.

However, it is important not to underestimate the amount of time and work involved in searching for and preparing the information in order to document the actual and target states, which may vary depending on the structure of the organisation and quality of the existing documents and/or knowledge management platforms.

With this in mind, the problem statement method can help deliver better results. When both states (i.e., the actual and target states) have been defined, they provide a clear context for the situation as it should be and as it currently stands, which can help better understand the gap.

The gap that is then revealed can serve as the starting point for developing a solution or solutions. It makes sense to gather up various solutions from different stakeholders who are affected in order to then weigh up the different opinions when developing a solution. Here it is vital that you take into account the amount of influence that the various stakeholders have based on their relevant position in order to turn ‘adversaries’ into ‘allies’ before the process begins.

It is also recommended that you learn about the procedures outlined in the IREB standard, as these can be quite helpful when developing solutions in this step.

Please note that this is not a formula that you have to follow to the letter. That means it can be adapted in order to achieve the desired outcome in any given situation.

Conclusion

It is important to consider that the business analyst serves in many different roles, be that as product owner or as requirements engineer. This really comes into play in situations where they have to work closely with other stakeholders or to solve complex problems. In this context, the problem statement is a key tool that is not limited to the specific role of the business analyst. Rather, it can be a great option in a wide variety of professional scenarios when it comes to defining the exact challenges and developing solutions that effectively solve them.

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• Requirements Engineering @ adesso