CHAPTER 1 - INTRODUCTION TO THE PRODUCT SUPPORT BCA
1. Introduction and Purpose
1.1. Introduction
1.1.1. Product Support BCA Structure
Figure 1: Product Support BCA Elements
1.2. Guidebook Purpose
1. Introduction and Purpose
1.1. Introduction
A Business Case Analysis (BCA) is a structured methodology and document that aids decision making by identifying and comparing alternatives by examining the mission and business impacts (both financial and non financial), risks, and sensitivities. BCAs may be somewhat different from other decision support analyses through their emphasis of the enterprise wide perspective of stakeholders and decision makers and assessment of the holistic effects impacted by the decision. Other names for a BCA are Economic Analysis, Cost-Benefit Analysis, and Benefit-Cost Analysis. Broadly speaking, a BCA is any documented, objective, value analysis exploring costs, benefits, and risks.
Product Support Manager responsibilities relative to cost-benefit analyses are spelled out in 10 U.S.C. § 2337, DoDI 5000.02 and the Defense Acquisition Guide. Prior to each change in the Product Support Strategy or every five years, whichever occurs first, the program must revalidate any business-case analysis performed in support of the product support strategy.
A Product Support BCA should aid the decision maker (PM, PEO, SAE, or others as applicable) in making an informed the product support strategy decision. It should be tailored to inform the PM of costs, benefits and risk implications of the strategy alternatives being considered. It should reflect the appropriate level of analysis needed to provide a fair assessment of the proposed alternatives.
A Product Support BCA should aid the decision maker (PM, PEO, SAE, or others as applicable) in making an informed the product support strategy decision. It should be tailored to inform the PM of costs, benefits and risk implications of the strategy alternatives being considered. It should reflect the appropriate level of analysis needed to provide a fair assessment of the proposed alternatives.
A BCA concludes with a recommendation and associated specific actions and an implementation plan to achieve stated organizational objectives and desired outcomes. One principle application of this guidebook is to assist the Product Support Manager (PSM) in identifying the product support strategy that achieves the optimal balance between Warfighter capabilities and affordability.
A BCA does not replace the judgment of a decision maker. Rather, it provides an analytic, standardized, and objective foundation upon which credible decisions can be made. A Product Support BCA should be a comprehensive, fair, and accurate comparison when evaluating multiple alternatives. It should take into account broad Department wide impacts and context throughout the analysis. The PSM prepares a Product Support BCA for major product support decisions, especially those that result in new or changed resource requirements. A Product Support BCA helps leadership with significant investment and strategic decisions across all applications of Product Support. For example, Product Support BCAs may support decisions on whether or not to transform the product support strategy or business operations, develop a web-based training curriculum, or retire an asset.
1.1.1. Product Support BCA Structure
A BCA has three major elements: the purpose, process components, and quality foundation (see Figure 1). The BCA purpose identifies the problem statement, objectives, and metrics. The items of this element should clearly annotate what issue the BCA is attempting to solve and how success will be measured. The BCA process components are those subsections of the BCA that directly execute and report on analytical actions. The third major BCA element contains the supporting foundation of the BCA that directly affects the quality and completeness of the analysis. Background research, due diligence, governance, and data management and control underlie and prop up the entire process. Governance represents the oversight and enterprise wide context that helps to steer the analysis throughout the process. The three elements work together to ensure the BCA targets the relevant subject matter, credibly analyzes and reports the results, and integrates into the organization’s mission and leadership’s vision.
Figure 1: BCA Elements
1.2. Guidebook Purpose
The purpose of this guidebook is to provide a standardized process and methodology for writing, aiding decision making, and providing analytical decision support for a Product Support BCA. This guidebook is organized into two sections:
- Introduction to the Product Support BCA; providing the background, people, roles and responsibilities, and data management involved in creating a Product Support BCA
- The Product Support BCA Process; providing the method of preparing a Product Support BCA, including research, data analyses, and delivery of a Product Support BCA report
