In this article, I would like to introduce you to one such area where business analysis (BA) is tremendously helpful and have potential to save millions of dollars i.e. buying decisions in corporates. Let us first look into a typical purchasing process that happens in a company and then review the “BA way of Buying”.Typical Purchasing Process:
Purchasing Process using Business Analysis:
- Working with the stakeholders (users plus others affected by this new asset) to define the need as business and stakeholder requirements. At times, user departments think only their requirements and not the other departments. An asset acquired with these partial requirements can never be put to best use.
- Finding out what capability will be added to the organization by getting this asset and its alignment with the goals and objectives of the organization in short term and long term. A construction company is planning to buy about USD 25 MM worth of machineries which will last for the next 15 years. In this case, they have to think about their required capabilities that are needed for the next 15 years before making a decision.
- Check whether the capability under discussion is already available anywhere within the organization, so that the unused capacity can be used without buying a new one.
- Ensure whether the excess capacity requested is certainly not available in your organization. In one of our project for a medical equipment company, we advised them not to buy a new machine costing USD 500,000 as we found that the required capacity is available in the existing setup itself.
- Develop use cases detailing how the proposed system will be used to perform the required tasks to fulfill the need of the organization.
- Design acceptance and evaluation criteria to screen and rank the vendors respectively.
- Prepare the business case to present the argument towards why such an asset is required or not required for the organization to enable the management to make a decision.
Though the BA way of buying involves elaborate work before the buying decision is made, the time spent is worth rather than buying an asset,
If your proposed asset qualifies under any of the above criteria, please use the “BA Way of Buying”.
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