Agile Business Analysis Strategy Horizon Analysis Questions and Answers — Questions and Answers
Question 1: An Agile Business Analyst is working with senior leadership to allocate resources for the upcoming year. The leadership team wants to balance maintaining current revenue streams with investing in future growth. Which concept should the analyst primarily use to frame this strategic conversation?
- The 70/20/10 Rule for resource allocation across different types of initiatives.
- The Three Horizons framework to categorize initiatives by time-to-impact and uncertainty. (Correct answer)
- User Story Mapping to visualize the entire customer journey and identify new opportunities.
- SWOT Analysis to identify internal strengths and weaknesses against external opportunities and threats.
Correct answer: The Three Horizons framework to categorize initiatives by time-to-impact and uncertainty.
The Three Horizons framework, originally from McKinsey, is specifically designed to help organizations balance managing their current business (Horizon 1) with exploring emerging opportunities (Horizon 2) and creating new ventures for the future (Horizon 3). This directly addresses the leadership's goal of balancing current revenue with future growth.
Question 2: A financial services company is planning an initiative to explore using blockchain for a completely new, decentralized financial product. This initiative is characterized by high uncertainty and the potential for market disruption, though any significant revenue is likely several years away. Within the Three Horizons model, where would this initiative be classified?
- Horizon 1, as it involves improving core financial services.
- Horizon 2, as it is an extension of their existing product lines into a new market.
- Horizon 3, as it represents a highly uncertain, potentially transformative new venture. (Correct answer)
- This would fall outside the Three Horizons model as it is purely experimental.
Correct answer: Horizon 3, as it represents a highly uncertain, potentially transformative new venture.
Horizon 3 is dedicated to creating genuinely new business ventures and exploring disruptive innovations. These initiatives are characterized by high uncertainty and a long-term potential for significant returns, which perfectly describes the blockchain venture.
Question 3: What is the primary focus of an Agile Business Analyst's work at the Strategy Horizon?
- Breaking down features into user stories for the development team.
- Defining the scope and requirements for a specific, approved project.
- Ensuring the delivery team has a refined backlog for the current iteration.
- Providing decision-makers with information to align initiatives with organizational goals. (Correct answer)
Correct answer: Providing decision-makers with information to align initiatives with organizational goals.
At the Strategy Horizon, the business analyst's role is to support high-level decision-making. This involves providing analysis on the business context, risks, and opportunities to ensure that the initiatives selected for investment are the ones that will deliver the most value towards the organization's strategic goals.
Question 4: Which of the following activities is MOST characteristic of work done within Horizon 1 of the Strategy Horizons model?
- Launching a pilot program for a new service in an adjacent market.
- Conducting research and development for a groundbreaking technology that could redefine the industry.
- Optimizing the checkout process of an existing e-commerce platform to increase conversion rates. (Correct answer)
- Forming a strategic partnership to co-develop an entirely new business model.
Correct answer: Optimizing the checkout process of an existing e-commerce platform to increase conversion rates.
Horizon 1 focuses on maintaining and defending the core business. Activities in this horizon are typically incremental improvements and optimizations to existing products, services, and processes to maximize current profitability and efficiency. Optimizing a current checkout process is a classic Horizon 1 activity.
Question 5: A product team is assessing a list of potential initiatives. One initiative involves expanding their successful software product into the Latin American market, which would require significant localization and some new features. How would an Agile BA categorize this using the Three Horizons model?
- Horizon 2, because it involves extending an existing business into an emerging or adjacent market. (Correct answer)
- Horizon 1, because it is based on an existing, successful product.
- Horizon 3, because entering a new geographical market is a form of disruptive innovation.
- A blend of Horizon 1 and 2, as it leverages a core product for new growth.
Correct answer: Horizon 2, because it involves extending an existing business into an emerging or adjacent market.
Horizon 2 involves nurturing and building emerging businesses by extending current capabilities into new areas, such as new markets or product lines. Since this initiative takes a successful existing product and expands it to a new geographic market, it fits squarely within the definition of Horizon 2.
Question 6: When applying Agile Business Analysis principles at the Strategy Horizon, which principle is demonstrated by helping decision-makers understand the organization's current capabilities and the external market context before committing to new initiatives?
- Get Real Using Examples
- Think as a Customer
- Avoid Waste
- See the Whole (Correct answer)
Correct answer: See the Whole
The 'See the Whole' principle in Agile Business Analysis is about taking a holistic view. At the Strategy Horizon, this means helping decision-makers understand the entire context, including the organization's internal strengths and weaknesses and the external market landscape, to make well-informed strategic choices.
Agile Business Analysis Strategy Horizon Analysis Questions and Answers
An Agile Business Analyst is working with senior leadership to allocate resources for the upcoming year.
The leadership team wants to balance maintaining current revenue streams with investing in future growth.
Which concept should the analyst primarily use to frame this strategic conversation?