BUSINESS CASE ANALYSIS Esther Morse, Director Weapon Systems Support Directorate OFFICE OF THE ASSISTANT SECRETARY OF THE ARMY (ACQUISITION, LOGISTICS & TECHNOLOGY)

DEFINITION Business Case Analysis (BCA): A structured and systematic methodology for analyzing the alternatives involved in a business decision Can be tailored to particular circumstances Considers processes, resources, and feasible alternatives Emphasizes financial consequences

BACKGROUND BCA Usage: Industry Information Technology Arena Among Program/Project Managers Companies contemplating mergers and acquisitions

BACKGROUND (Cont’d) Department of Defense Usage Increasing Due to: Budgetary Constraints Personnel Shortages Need to Develop Effective Acquisition Strategies Reach Sound Business Decisions Reduce Operating and Life Cycle Costs Maintain Robust Warfighting Force Structure

ARMY APPROACH EFFORTS TO ENCOURAGE USE Assistant Secretary (ALT) Item of Emphasis Deputies Staff Meetings Article in AL&T Magazine Handbook Publication

ARMY APPROACH (Cont’d) Assistant Secretary, FM&C (Deputy for Cost and Economics) Highlighting AL&T Magazine Article Revising Cost Analysis Manual Including Chapter on BCAs Combining Economic Analysis and Cost Analysis Concepts

FOCUS Applicability: Major Defense Acquisition Programs Weapon Systems Information Technology Programs Acquisition Categories I – III Non-Major Systems

COMMON ELEMENTS OF BCA Problem Definition Objectives Assumptions Alternative Solutions

COMMON ELEMTNTS (CONT’D) Data Collection Identification of Data Required Classification of Data (cost, performance, schedule, etc)

COMMON ELEMENTS (Cont’d) Evaluation Analyze Data to Address Objective Develop Findings

COMMON ELEMENTS (CONT’D) DUE OUT Report Conclusions Recommendations (Basis for Acquisition Strategy or Business Decision)