Define Business Need - Business Analyst


Identify and define why a change to organizational systems or capabilities is required.


The definition of the business need is frequently the most critical step in any business analysis effort. The business need defines the problem that the business analyst is trying to find a solution for. The way the business need is defined determines which alternative solutions will be considered, which stakeholders will be consulted, and which solution approaches will be evaluated.

An issue encountered in the organization, such as a customer complaint, a loss of revenue, or a new market opportunity, usually triggers the evaluation of a business need. It is common for organizations to act to resolve the issue without investigating the underlying business need. The business analyst should question the assumptions and constraints that are generally buried in the statement of the issue to ensure that the correct problem is being solved and the widest possible range of alternative solutions are considered.

New business needs can be generated in several different ways:

  • From the top down − the need to achieve a strategic goal
  • From the bottom up − a problem with the current state of a process, function or system
  • From middle management − a manager needs additional information to make sound decisions or must perform additional functions to meet business objectives
  • From external drivers − driven by customer demand or business competition in the marketplace


Business Goals and Objectives: Business goals and objectives usually have to be refined in order to define the business need. In some cases the goal or objective may be exploratory - the business need may be to understand if a methodology or business model can work.

Requirements [Stated]: Elicitation must be performed in order to assist stakeholders in defining their perceived needs. Ensure that they reflect actual business requirements, as opposed to describing solutions.


1.Business Goals and Objectives

Business goals and objectives describe the ends that the organization is seeking to achieve. Goals and objectives can relate to changes that the organization wants to accomplish, or current conditions that it wants to maintain.

Goals are longer - term, ongoing, and qualitative statements of a state or condition that the organization is seeking to establish and maintain. High - level goals can be decomposed to break down the general strategy into distinct focus areas that may lead to desired results, such as increased customer satisfaction, operational excellence and / or business growth. Focus areas are usually described in brief statements. For example, a goal may be to “increase high - revenue customers” and then further refined into a goal to “increase high - revenue customers through mergers and acquisitions”.

As goals are analyzed they are converted into more descriptive, granular and specific objectives, and linked to measures that make it possible to objectively assess if the objective has been achieved. A common test for assessing objectives is to ensure that they are SMART:

  • Specific – describing something that has an observable outcome
  • Measurable – tracking and measuring the outcome
  • Achievable – testing the feasibility of the effort
  • Relevant – in alignment with the organization’s key vision, mission, goals
  • Time-bounded – the objective has a defined timeframe that is consistent with the business need

2. Business Problem or Opportunity

In order to define a business need, an issue must be investigated to ensure that there is in fact an opportunity for improvement if the issue is resolved. Factors the business analyst may consider include:

Adverse impacts the problem is causing within the organization and quantify those impacts (e.g.potential lost revenue, inefficiencies, dissatisfied customers, low employee morale).

Expected benefits from any potential solution (e.g., increased revenue, reduced costs, increased market share).

How quickly the problem could potentially be resolved or the opportunity could be taken, and the cost of doing nothing.

The underlying source of the problem.

3. Desired Outcome

A desired outcome is not a solution. It describes the business benefits that will result from meeting the business need and the end state desired by stakeholders. Proposed solutions must be evaluated against desired outcomes to ensure that they can deliver those outcomes. Examples include:

  • Create a new capability such as a new product or service, addressing a competitive disadvantage, or creating a new competitive advantage;
  • Improve revenue, by increasing sales or reducing cost;
  • Increase customer satisfaction;
  • Increase employee satisfaction;
  • Comply with new regulations;
  • Improve safety;
  • Reduce time to deliver a product or service.
  • Desired outcomes should address a problem or opportunity and support the business goals and objectives.


Benchmarking : Understanding what competing organizations and peers are doing allows the organization to remain at a comparable level of service or identify opportunities to increase efficiency.

Brainstorming : Generate insights and options.

Business Rules Analysis : Identify changes in the policies that guide the organization towards achieving its goals and objectives.

Focus Groups : To identify and discuss problems.

Functional Decomposition : Convert business goals into achievable objectives and measures.

Root Cause Analysis : Determine the underlying source of a problem.


Customer or Supplier: A business need may arise from actions taken by, or needs of, a customer or supplier. New opportunities often arise as an unmet customer need is identified.

Domain SME and End User: Likely to have the most direct awareness of problems or limitations that exist in current systems and the effects those have.

Implementation SME: May be aware of capabilities currently present in or easily added to existing systems that may provide new opportunities.

Regulator: May impose new regulatory or governance requirements on the organization.

Sponsor: A sponsor must be identified within the organization who is responsible for making sure that the business need is met and who can authorize action to meet it.


Business Need: A business need describes a problem that the organization is (or is likely to) face or an opportunity that it has not taken, and the desired outcome. The business need will guide the identification and definition of possible solutions.

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