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BUSINESS CASE ANALYSIS

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

  2. 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

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

  4. 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

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

  6. 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

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

  8. COMMON ELEMENTS OF BCA • Problem Definition • Objectives • Assumptions • Alternative Solutions

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

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

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