Business Needs Analysis

Business Needs Analysis

A business needs analysis (BNA) is an analysis method that assists a firm in determining the major drivers for change and the best alternatives or solutions to fix issues or increase productivity or performance. Business needs analysis assists in determining what the customer’s demands, requirements, and standards are business needs analysis assists you in determining which modifications will help you achieve your objectives.

Capability needs (statements about providing specific services, supplying a range of goods, supporting people in need, or guaranteeing the organization’s own operational performance) and improvement needs are examples of high-level business needs (suggestions meant to increase efficiencies or decrease costs, effort, or time-to-market).

Business Analysis to Determine Needs

A firm, whether public, private, or nonprofit, serves a market, performs a purpose, and, if everything goes well, meets the vision that its management has established for it.

Business leaders define goals and objectives for their enterprises over the course of operations, and they mobilize teams to work hard and deliver on them. These aims and objectives are business requirements; they are the things that the company must have or attain in order to run, be profitable, serve effectively, and execute its mission successfully.

Identifying and comprehending the business’s goals; communicating its strategic direction; and recording any major issues relative to the business’s accomplishments, difficulties, risks, or problems are all part of the enterprise analysis process.

Identifying business requirements successfully necessitates critical thinking, analysis, and insight. A company’s business leaders may not expressly state what they require, but they will almost certainly suggest solutions they desire, complain about capabilities they lack that would be beneficial, and wax lyrical about opportunities they could pursue if they only had the most cutting-edge new technologies. As a result, you’ll have to perform a lot of interpreting.

Investigating the root of leaders’ wishful thinking might provide insight into their company ambitions and targets. When you strive to determine why they require those items, you uncover the business’s essential operations or drivers. IRAQIS, which stands for “raise revenue, avoid expenses, improve service,” is a common business analysis acronym. Typically, the demands of the firm are tied to one of these aims.

Business analysts must be able to describe these needs in order to be effectively satisfied:

  • What aims or goals are serviced or tried in a particular business area? (s)
  • What goals or results are desired?
  • What concerns or problems are impeding progress?
  • What solutions have been proposed or are being evaluated for implementation or adoption in order to meet the business needs?

Some Different Types of Business Needs Analysis

The process of finding useful improvements to a firm is known as a business needs analysis. This has multiple separate variants that may be combined:

SWOT (Strengths, Weaknesses, Opportunity, Threats)

Determine your advantages, disadvantages, opportunities, and dangers. This is simply a brainstorming exercise that is frequently used as a jumping-off point to involve stakeholders.

Analysis of Gaps

Identifying the gaps between your strategy and your reality.


Comparing your outcomes to rivals, best practices, or ideal performance. Calculating a theoretical minimum for a manufacturing cost, for example, and comparing it to your actual outcomes. A technique for detecting inefficiencies, defects, and poor performance. This might alternatively be worded as “improvement chances.”

Analysis of Capabilities

Identifying business capabilities and assessing your degree of maturity in each. This may be done at many degrees of granularity. For example, an initial analysis may score a capability like information security, followed by a more extensive analysis that scores the components of information security like data loss prevention or network security.

Analysis of Variance

Variances between forecasted or desired performance and actual performance are examined. For example, a schedule variance analysis to identify why a procedure is frequently late.

Analyze the problematic issue of business needs analysis

Failures are analyzed to establish the root cause and to identify adjustments that will prevent future failures.

How to Conduct a Business Needs Analysis

So, how does one go about conducting a company requirements analysis? The first stage, of course, is to ask a lot of questions. In general, project teams will create a list of questions they need to answer in order to understand the company and the problem.

Using our prior example, the Baxter Industries churn team must respond to any inquiries. Their mission is to understand everything they can about their company and the situation at hand.

The following are some critical questions to ask:

  • How many clients cancel per month on average?
  • Is there a typical amount of cancellations in the industry?
  • How much has that figure risen in the last several months?
  • Why do people cancel their orders?

Following that, the team should develop system reports informing them of the reasons why clients terminate service. They should look into if there was something specific that happened in the past few months that caused the increase in cancellations. This may raise further questions, such as: 

  • Who manages customer cancellations?
  • Is there a procedure in place to allow such personnel to save the customer?
  • What do such reps have the authority to do in order to save the customers?
  • Is it possible for the system to provide a report that shows the number of service cancellations made by an employee?

The goal of the business needs analysis is to have a thorough understanding of the company and its requirements. A BNA may be completed by a corporation after determining that it wants to execute a new strategy. In this example, the organization would perform a business needs analysis to assess the present condition, identify the primary drivers for change, and then offer suggestions or plans for implementing the new strategy.

A business needs analysis may also be employed when a corporation concludes that it needs a new business system and hires an outside contractor to create such a system for them. In this situation, the vendor would do a business needs analysis to understand the business, its needs, the major system specs, and a summary of how the new system will address present business difficulties.

Let’s look at a real-world scenario to discover how a business needs analysis works. Baxter Industries finds that their churn rates, or the number of customers that discontinue service each month, are too high. The corporation can form a task group to look into this matter. The task force should begin by doing a business needs analysis.

The goal of completing the business requirements analysis in this example is to properly understand the business and the present situation. The firm may be able to deduce what is generating the churn problem. The corporation may also implement a few easy improvements to decrease attrition. However, if the organization is serious about resolving the fundamental cause of this problem, it must first do a thorough study of the business needs analysis and the problem.