Figure 1: Product Support BCA Elements
Figure 2: Product Support BCA Schedule throughout the Life Cycle
OSD has issued guidance emphasizing the use of the DoD Product Support Business Case Analysis (BCA) as a fundamental tool to support product support strategy decisions. The intent of the BCA 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 is a structured process that assesses the capabilities, effectiveness, cost, competencies, and process efficiencies to identify the optimum best value product support solution. A Product Support BCA concludes with a recommendation and associated specific actions and an implementation plan to achieve stated organizational objectives and desired outcomes.
A Product Support BCA provides a best value analysis, considering not only cost, but also other quantifiable and non-quantifiable factors supporting the product support strategy implementation and related investment decisions. This can include, but is not limited to, performance, producibility, reliability, maintainability, and supportability enhancements. In outcome based product support strategies, it is important and frequently necessary to make up-front investments in Reliability and Maintainability (R&M) improvements and proactive obsolescence/DMSMS mitigation that result in short-term increases in system costs to generate the requisite LCC savings later. To provide this justification, it is critical that the process, scope, and objectives of the BCA be clearly understood and communicated. A BCA should be developed in an unbiased manner, without prejudice, and not constructed to justify a preordained decision.
The Product Support BCA does not replace the judgment of a decision maker. Rather, it provides an analytic, standardized, and objective foundation for credible decisions. The 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. The 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 business operations, develop a web-based training curriculum, develop solutions to any of the Integrated Product Support Elements (IPS Elements), or retire an asset.
The DoD Product Support Business Case Analysis Guidebook provides a structured methodology and document that aids decision making by identifying and comparing alternatives and 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. The intent of a Product Support is the determination of a best value solution. The BCA assesses each alternative and weighs total cost against total benefits to arrive at the optimum solution. The Product Support BCA process goes beyond cost/benefit or traditional economic analyses by documenting how each alternative fulfills the strategic objectives of the program; how it complies with product support performance measures; and the resulting impact on stakeholders. A Product Support BCA is a tailored process driven by the dynamics of the pending investment (PBL) decision. The BCA identifies which alternative support options provide optimum mission performance given cost and other constraints, including qualitative or subjective factors. Developing the Product Support BCA should determine:
- The relative cost vs. benefits of different support strategies.
- The methods and rationale used to quantify benefits and costs.
- The impact and value of Performance/Cost/Schedule/Sustainment tradeoffs.
- Data required to support and justify the PBL strategy.
- Sensitivity of the data to change.
- Analysis and classification of risks.
- A recommendation and summary of the implementation plan for proceeding with the best value alternative.
The Product Support BCA has three major elements: the purpose, process components, and quality foundation (see Figure 1).
- 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 to measure success.
- BCA Process Components are those subsections of the BCA that directly execute and report on analytical actions.
- BCA Quality Foundation 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 Product Support 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: Product Support BCA Elements
Source: DoD Product Support Business Case Analysis Guidebook
The Product Support BCA becomes an iterative process, conducted and updated as needed throughout the life cycle as program plans evolve and react to changes in the business and mission environment.
Figure 2: Product Support BCA Schedule throughout the Life Cycle
Source: DoD Product Support Business Case Analysis Guidebook
Details of this execution are documented in the DoD Product Support Business Case Analysis (BCA) Guidebook. As a program matures, the BCA must be updated and it evolves as learning takes place and data is captured. BCA’s are living documents.
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