Business Needs Analysis

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  • 0:02 What Is a Business…
  • 0:26 Why Analyze Business Needs?
  • 1:45 How to Complete a…
  • 4:52 Lesson Summary
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Lesson Transcript
Instructor: Sean Kennedy

Sean has 8 years experience as a supervisor and has an MBA with a concentration in marketing.

Business needs analysis is a valuable analysis tool companies use to determine the needs of the business. A needs analysis is often used to understand an issue or opportunity and begin to formulate resolution ideas.

What Is a Business Needs Analysis?

A business needs analysis (BNA) is an analysis tool that helps a company identify the key drivers for change and determine the best options or solutions to resolve issues or improve productivity or performance. BNA helps determine what the customer needs are, their requirements, and what their specifications are. BNA helps you determine what changes can help you reach your goals.

Why Analyze Business Needs?

The purpose of the business needs analysis is to clearly understand the business and its needs. A BNA might be completed by a company after identifying they would like to implement a new strategy. In this case, the company would conduct a BNA to understand the current state, identify the key drivers for change, and then make recommendations or plans for how to implement the new strategy.

Another way you might see a BNA used is when a company determines they need a new business system, and they hire an outside contractor to design that system for them. In this case, the vendor would conduct the business needs analysis to understand the business, its needs, the key specifications for the system, and a list of the ways the new system would solve current business issues.

Let's use a real-world example so you can see a business needs analysis in action. Baxter Industries determines their churn numbers, or the number of customers canceling service each month, are too high. The company can create a task force to consider this issue. The first thing the task force should do is complete a business needs analysis.

In this example, the purpose of completing the business needs analysis is to thoroughly understand the business and the current problem. The company could guess about what is causing churn issues. The company could also put a couple of quick fixes in place to reduce churn. However, if the company really wants to solve the root cause of this issue, a thorough analysis of the business and problem should be completed first.

How to Complete a Business Needs Analysis

So how can a business needs analysis be completed? Well, the first step is about asking a lot of questions. Project teams will generally brainstorm lists of questions they need to answer in order to understand the business and the problem.

Using our previous example, the Baxter Industries churn team needs to answer many questions. Their task is to learn as much as they can about their business and the issue itself.

Some vital questions should include the following:

  • How many customers usually cancel each month?
  • Is there an industry standard number of cancellations that is expected?
  • How much has that number increased in the past few months?
  • Why do customers cancel?

Next, the team should generate reports from the system to inform them of the reasons the customers cancel service. They should determine if there was something particular happening in the last few months that led to the spike in cancellations. This might lead to another set of questions, such as:

  • Who handles customer cancellations?
  • Is there a process in place for those representatives to save the customer?
  • What are those representatives empowered to do in order to save the customers?
  • Can the system generate a report that indicates the number of service cancellations by an employee?

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