What is a business need and where does it come from?

Business needs are problems and opportunities of strategic importance experienced by the organization.

They can come from different levels within the organization. Here, we consider the different perspectives or directions these needs can come from within the organization:

From the top down: These are strategic goals that have been identified and need to be achieved. 

In our motor vehicle manufacturer example, the board members of the motor vehicle manufacturer have identified a need to reduce operational costs within the dealerships.

From the bottom up: This is when a problem is identified with the current state of a process, function, or system. 

Using our example, the current dealer management system vendor is not addressing the issues or problems identified and raised by staff members using the system. This is causing ongoing operational issues and increased inefficiencies. 

From middle management: This is when a manager or a group of managers need further information to make sound decisions or have to perform additional functions to meet business goals and objectives.

Using our example to explore this further, the management at the dealership level is reviewing budgets for the future year. The expenses presented for the next year have brought to light that the dealer management system costs need to be addressed. 

From external drivers: When we say a business need came from external drivers, we mean that the business need was identified as a result of a challenge that came from outside the organization. These types of external drivers could be described as things such as a change in customer demand or a change in business competition.

Using our example, the current dealer management system vendor is an external organization that has doubled its annual maintenance charges to the dealerships. This has a direct impact on the dealership's profitability ratios, which is driving the need for change.

Business needs are always expressed from the perspective of the organization, and not from the perspective of any individual stakeholder. 

Business needs are often identified or expressed along with a suggested solution.

It is the business analyst's role to question the assumptions and constraints that might be disguised in the statement of the issue to make sure that the correct problem is being addressed and that the most optimal range of alternative solutions is being considered as part of the change.