The average salary of a business analyst in the USA is around $74,018 per year.

Now, if you are just starting your journey as a business analyst or a seasoned business analyst looking to get another job, you need to face an interview, where you will be asked questions about various business analysis topics.

In this highly competitive market, multiple candidates with similar work experience apply for a similar position. And to find the best among them, interviews are the only way.

It will help distinguish between candidates based on their skills and expertise.

Hence, it’s an essential part of the job-hunting process, and you should give yourself enough time to prepare for the business analyst interview questions.

It’s better to prepare for specific questions depending on the job and industry you are applying for, such as:

  • Business analyst interview questions and answers for insurance domain
  • Senior business analyst interview questions and answers,
  • Agile business analyst interview questions and answers,
  • Healthcare business analyst interview questions and answers, etc.

This blog has compiled a list of business analyst interview questions and categorized them based on industry and experience to help you prepare for the interview.

Basic Business Analyst Interview Questions and Answers

1. Who is a Business Analyst?

Ans: A business analyst analyzes business processes and collaborates with stakeholders to understand and suggest process improvement initiatives. They help technical teams in validating and planning product ideas. Business analysts must have in-depth knowledge of the industry and effectively communicate business needs among stakeholders and low-level works.

Here are some of the responsibilities of a business analyst:

  • Understanding business requirements
  • Creating detailed analysis
  • Communicating with all levels of employees, including top stakeholders and workers
  • Managing projects

2. What Are Some Tools Business Analysts Use Daily?

Ans: There are many tools business analysts use daily.

Following are a few of them:

  • Use cases
  • System Requirement Specification
  • Functional Requirement Specification (FRS)
  • Requirement Traceability Matrix (RTM)
  • Test cases

3. What is SRS or System Requirement Specification?

Ans: A system requirement specification or SRS is a compilation of documents containing all the system or application features. It also has all the functions defined for the stakeholders and developers to develop the system on it.

Key elements of an SRS are:

  • Scope of Work
  • Functional Requirements
  • Non-Functional Requirements
  • Dependencies
  • Data Models
  • Assumptions
  • Constrains
  • Acceptance Criteria

4. What Do You Mean by Use Case?

Ans: Use cases are diagrammatic representations of the functions of a system. It clearly represents how a user can use the system to achieve their goal. It’s mostly involved with the software engineers who define and build the targeted features and resolve issues to improve performance.

5. What Is the Full Form of INVEST?

Ans: INVEST is a business term, which stands for:

  • Independent
  • Negotiable
  • Valuable
  • Estimable
  • Sized-Appropriately
  • Testable

These are the main criteria that are used to build and assess quality user stories.

6. What Is the Difference Between a Data Analyst and a Business Analyst?

Ans:

Data Analyst Business Analyst
This role requires data analysis skills This requires more Data visualization skills
This role is more operational This is more of a strategic role
It needs deep knowledge of SQL, Data Mining, statistics It requires deep business and domain knowledge, data warehousing and analytics

7. What are the documents Business Analysts use to maintain their works?

Ans.: Here are some of the documents business analysts use to maintain their work:

  • Use Case Documents
  • Requirement Management Plan
  • Project Vision Report
  • Requirement Traceability Matrix
  • System Requirement Document
  • Test case
  • Functional Specification Document

8. How to design a use case?

Ans.: Here are the steps to design and use case:

  • Identify the users for the systems
  • Create user profiles for each user categories
  • Identify user goals
  • Create usecases for each goal
  • Structure usecases
  • Review and validate users

9 What is CaaS?

Ans: CaaS stands for communication as a service. It is an outsourced communication solution.

Behavioural Interview Questions and Answers for Business Analyst

10. How Do You Handle Difficult Stakeholders?

Ans: This question is to understand how you handle difficult situations. Talk about how you will handle the situation by controlling your emotions and understanding the stakeholder’s viewpoint to reach a middle ground.

11. How Do You Pitch Your Idea to Stakeholders?

Ans: This question is to test your communication skills. Follow the STAR format to explain how you prepare for the pitch if you have never pitched an idea before. Explain to stakeholders how you will do it given a chance.

12. When You Have to Learn a New Skill, How Do You Go About It?

Ans: You need to elaborate your approach with an example by following the STAR method.

S - Why did you decide to learn the skill?
T - What action did you take to learn?
A - How did you implement your knowledge in your workplace
R - What was the outcome?

Business Analyst Interview Questions and Answers for Freshers

13. What Are the Key Phases of Business Development?

Ans: Here are the key phases of business development:

  • Forming
  • Storming
  • Norming
  • Performing

14. What Are the Steps of Project Development?

Ans: Here are the basic steps of project development:

  • Market Analysis
  • SWOT Analysis
  • Customer Persona Analysis
  • Competition Analysis
  • Strategy Development

15. What Is Requirement Elicitation?

Ans: Requirement elicitation is a process of collecting information from stakeholders, users, customers by conducting personal interviews, preparing questionnaires to collect information, brainstorming and designing prototypes, etc.

16. What Is the Difference Between Need and Requirement in Business Analysis?

Ans: Needs represent the future goals of a business. In contrast, the requirements elaborate on the business needs in detail.

17. What Are the Basic Business Analysis Skills One Must Possess?

Ans: Business analysts should have excellent problem-solving and communication skills. Since they constantly have to communicate with people from every level.

Apart from that, they should be well versed with technology and IT skills such as Microsoft Office Suite, programming languages such as SQL, HTML, R, Java. They also should understand the software development life cycle, databases, and technical documentation.

18. How Do You Capture Non-functional Requirements?

Ans: Two types of documents are used to capture non-functional requirements.

These are :

  • System Design Documents
  • Functional Requirement Documents

19. What Is an Alternative Flow in Use Case Diagram?

Ans. It’s a conditional flow. If there is a failure in the system, the users can follow an alternative solution to achieve their goals.

20. What are Personas?

Ans: Personas can be described as fictional characters representing a target demographic.
Business analysts define these personas to understand demographic-specific behavior to design systems.

21. What is Gap Analysis?

Ans. This technique business analysts use to identify gaps between different business systems and operations. These gaps are opportunities. If the organization can successfully fill the gaps, they have a higher chance of succeeding.

Senior Business Analyst Interview Questions and Answers

22. What Is Risk Management?

Ans: Risk is defined as an event or a series of events that threaten an existing business function and its profitability.

And risk analysis is a technique that identifies and mitigates the risks. There are various types of risk management practices such as:

  • Risk Avoidance
  • Risk Reduction
  • Risk Transfer
  • Risk Acceptance

Risk management starts with identifying the risk, then analyzing its gravity.

After the risk is deeply understood, then we can move to risk mitigation planning and execution.

Here is a visual representation of the risk management process:

Business-Analyst-Resume-Summary

23. What Is the Difference Between Software Development Lifecycle and Project Lifecycle?

Ans:

Software Development Lifecycle Project LifeCycle
It’s for developing software It’s for executing a new project
It mainly involves around a single software development A project can contain multiple software
SDLC includes requirement gathering, software design, coding, testing, and maintenance PLC includes ideation, researching, testing, and analysis

24. What is a Requirement Traceability Matrix (TM)?

Ans: Recruitment traceability matrix record all the clients’ requirements so that developers can efficiently work through the document and work on the requirements.

It’s also used to ensure that all the requirements are met on time.

25. What is UML?

Ans: The full form of UML is “Unified Modeling Language.” It’s a developmental modeling language that is used to visualize a system in a standardized way.

Here are some usabilities of UML:

  • It is used to identify and mitigate system errors
  • Understand system behavior and prepare design plans

26. What Is Scope Creep?

Ans: Scope creep can be defined as sudden changes in project scope without adding more resources to the projects. It happens due to miscommunication and mismanagement of projects.

27. What Are the Differences Between BRD and SRS?

Ans:

Business Requirements Document System Requirements Specification
These are functional specifications of a software It’s the technical specifications of a software
Created after clients’ interaction with business analysts Created after clients’ engagement with development team

28. What Is the Difference Between Business Analysis and Business Analytics?

Ans:

Business Analysis Business Analytics
Business analysis is functional analysis Business analytics is data-driven analysis
It recognizes issues and mitigates problems It analyzes data and derives meaningful insights
Tools used are - SWOT, PESTEL, MOST, FIVE WHY, etc. Tools used are - Big Data, Business Intelligence, Predictive Analysis

29. What are the common gaps a business analyst may find in a business?

Ans. Here are the gaps you can find as a business analyst:

  • Performance Gap: It is the gap of performance between your product and competitor’s products
  • Sales Gap: This is the gap between sales target and actual sales quarter on quarter
  • Profit Gap: This is the gap between the targeted profit vs. actual profit
  • Manpower Gap: This is the gap between required manpower and actual manpower

30. What are the problems business analysts face?

Ans. Here are the following problems business analysts face:

  • Issues with employees
  • Problems with Technology
  • Issues with access
  • Issues with business policies
  • Problems with Business model

31. What are MoSCoW and SWOT?

Ans. MosCow stands for Must or Sould and Could or Would.

This process should be implemented to prioritize framework requirements. For example, When business analyzes prioritize a requirement, they need to ask: "Is the requirement a must-have or should have?"

SWOT stands for: Strengths, Weaknesses, Opportunities, and Threats Analysis.

It is most common type of framework to prioritize resource allocation. A business analysts should be able to figure out the strengths and weaknesses of a system and allocate resources according to it.

Agile Business Analyst Interview Questions and Answers

32. What Are the Differences Between Agile and Waterfall Models?

Ans:

Agile Model Waterfall Model
Agile is more flexible It’s structured
Focuses more on customer satisfaction Internal processes do not require customer participation
Easy to implement changes Difficult to implement new changes after requirements are defined
It follows an incremental approach It follows a sequential process
The product is tested on every phase Testing can only be done at the final phase

33. What Is Called as Agile Manifesto?

Ans: An agile manifesto is a documented Agile guide that helps professionals learn and follow agile principles to manage a project.

34. What Should Be the Qualities of an Agile Business Analyst?

Ans: An agile business analyst must be able to:

  • Collaborate with stakeholders and clients to gather requirements
  • Create requirement specifications, and defile business rules
  • Understand how the technical systems works
  • Understand and follow agile methodologies as he’s the POC between clients and project team
  • Ensure the project is delivered on time and within budget

35. What Are the Essential Agile Metrics?

Ans: Here are some of the essential agile matrics:

  • Velocity - To track the speed of the project
  • Sprint Burndown Matric - To track the compilation of work in the sprint
  • Work Category Allocation - It tracks the priority order of any work
  • Defect Removal Awareness - To minimize error and improve product quality
  • Time Coverage - It tracks the time invested in coding during project testing
  • Defect Resolution Time - This tracks the turnaround time of resolving issues and bugs

36. What are the differences between scrum and extreme programming?

Ans.: Scrum and extreme programming both are processes of sprits.

Scrum Extreme Programming
Sprints in scrum stays for two weeks to a month Extreme programming stays for one-two week
Scrum is not very flexible Extreme Programming is more flexible

Key Takeaways

If you want to get your dream business analyst job, you need to have a stellar business analyst resume, along with practicing business analyst interview questions and answers.

A business analyst resume will make the job interview process much easier.

Business Analyst jobs vary from company to company, and you need to be well-versed in business analyst skills and functions to be able to answer the interview questions effectively.

However, here are some last-minute tips for your business analyst interview:

  • Get yourself familiarized with the essential terms, their abbreviations, or full forms
  • FIrst listen to the interviewers’ questions, then answer
  • Always try to find a real-life example from your experience when describing something to a recruiter

If you have any more questions regarding business analyst interview questions, feel free to reach out to us at team@hiration.com, and we will get back to you.