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Supplying Principles and Practices > USPS Supplying Practices Process Step 1: Identify Needs > Prepare Preliminary Business Justification for the Need
Prepare Preliminary Business Justification for the
Need
A preliminary business justification is created to assess the likely costs and
potential benefits associated with an identified need. Preparing a preliminary
business justification at the beginning of the supply process is essential to
project success.
The purpose of a business justification is to:
• Provide a framework for informed decision making, from planning
through managing the supply decision to recognition of
subsequent benefits
• Obtain management commitment and approval
The decision for the need is justified against the following factors:
• Strategic fit
• Achievability
• Affordability
• Business Options
• Commercial availability
This aspect of the business justification explains how the scope of the
proposed project fits within the existing business strategies of the Client
organization, as well as those of the Postal Service as a whole. The need
must support Postal Service objectives and current priorities. The strategic fit
discussion includes:
• Description of the business need (including the need[s]) that will
be met by the project and why it is needed now)
• Key benefits to be realized
• Key risks associated with the project/decision
• Critical success factors (how success will be constituted and
measured)
• Key stakeholder analysis (stakeholders and their contribution to
the project)
A detailed discussion of risks can be found in the Manage Risks topic of the
Decide on Make vs. Buy task of Process Step 1: Identify Needs.
The Client must determine that the project can be achieved within the current
capability and capacity of the organization and the Postal Service. Clients
and Supply Management (SM) (when applicable) should demonstrate that
they fully understand the implications of such supplying activity and can
support the activity with appropriate risk management and quality plans. It is
also important to ensure that sufficient resources and funding exist to achieve
the need, which is discussed in detail in the Assess Resources topic of the
Conceptualize Need task of Process Step 1: Identify Needs.
Sufficient funding must be available to fulfill the identified requirement. Cost
estimates must consider not only all relevant costs at the preliminary stage,
but should also consider possible cost changes over the life of the project.
The Develop Preliminary Total Cost of Ownership (TCO) Estimate activity of
the Conceptualize Need task of Process Step 1: Identify Needs will provide
the methodology for calculating these estimates. There should also be
continuing confirmation from within the organization that funds are available,
which is discussed in detail in the Assess Resources topic of the
Conceptualize Need task of Process Step 1: Identify Needs.
This component of the business justification identifies a wide range of
potential options for meeting the need with the highest ratio of benefits to
cost.
Clients and SM (when applicable) must begin the process of analyzing
whether a certain product or service can be obtained from current suppliers
or whether new suppliers need to be identified.
Assess Resources topic, Conceptualize Need task, Process Step 1: Identify
Needs
Develop Preliminary Total Cost of Ownership (TCO) Estimate topic,
Conceptualize Need task, Process Step 1: Identify Needs
Manage Risks topic, Decide on Make vs. Buy task, Process Step 1: Identify
Needs
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