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Supplying Principles and Practices > USPS Supplying Practices Process Step 1: Identify Needs > Update Business Justification
Update Business Justification
A preliminary business justification was developed during the Prepare
Preliminary Business Justification for the Need topic of the Conceptualize
Need task of Process Step 1: Identify Needs. It is updated during the Decide
on Make vs. Buy task. This phase focuses on assessing whether the
preliminary business justification was realistic. The updated business
justification should be accurate and complete and must provide all the
information required for senior management to make an informed investment
decision.
The aims of updating a business justification are to:
• Establish that the preferred option (make vs. buy) meets the
business need
• Justify the need for investment
• Produce an effective supplying strategy
• Demonstrate that the preferred solution represents value
• Confirm that the planned investment is affordable
When updating a business justification, it is necessary to build on the factors
of strategic fit, achievability, affordability, business options, and commercial
availability.
Strategic fit explains not only how the scope of the proposed project fits
within the existing business strategies of the Client organization but also the
compelling case for change in terms of the existing and future operational
needs of the organization. Contents within the strategic fit category help
answer the questions of "why must this be done?" and "what are the
objectives that this project will support?" The following should be analyzed
during this stage:
• Business need - reexamine the business need that will be met
by the project and further explain why the project is needed at the
present time.
• Key benefits to be realized - should be realistic and align to the
Client organization's strategic objectives.
• Key risks - outline the main business risks such as continuing
need for the project and changes in the business direction;
service risks such as the lack of internal skills to implement the
required projects; and external risks such as changes in the
supplier market.
• Critical success factors - determine what will constitute success
for the project.
• Key stakeholders - reexamine the key stakeholders and their
contribution to the project. Identify any potential conflicts between
different stakeholders and their concerns.
Detailed assessments should include reviews to ensure that objectives are
specific, measurable, achievable, and realistic.
A detailed discussion of Manage Risks can be found in the Decide on Make
vs. Buy task of Process Step 1: Identify Needs.
Achievability is concerned with the capability of both the Client and other
Postal Service organizations to manage a successful business project. This
section presents the actions that will be taken to support the achievement of
intended outcomes mentioned in the preliminary business justification
document. Detailed assessment within this aspect should include project
planning, risk management, benefit realization, purchase strategy, and
training strategy.
Affordability confirms whether the planned investment is affordable. Revision
of estimates is based on information provided during the Decide on
Make-vs.-Buy task, taking into account any changes in requirements for
internal costs in light of different solutions.
Estimates of the projected total cost of ownership (TCO) should be
considered when analyzing the topic of affordability, including:
• What are the expected costs
• When costs will be incurred
• How costs will be monitored
• Who will be responsible for each cost
This component of the business case investigates business options for
meeting the need with the highest ratio of benefits to cost, combined with
appraisal of risk. Key selection criteria for a particular option include:
• Meeting the investment objectives
• Aligning with the business strategy
• Achieving a return on investment in terms of economy, efficiency,
and effectiveness
• Making best use of both Client and Postal Service organizational
capabilities and capacities
• Matching resource and funding capabilities
Commercial availability carefully reexamines options for sources to meet the
business need (i.e., partnerships, existing supplier arrangement, or recruiting
new suppliers).
Prepare Preliminary Business Justification for the Need 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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