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2 TITLE AND SUBTITLE DOD Product Support Business Case Analysis Guidebook 5a. CONTRACT NUMBER 5b. GRANT NUMBER 5c. PROGRAM ELEMENT NUMBER 6. AUTHOR(S) 5d. PROJECT NUMBER 5e. TASK NUMBER 5f. WORK UNIT NUMBER 7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES) Office of the assistant Secretary of Defense for Logistics,and materialReadiness (ASD(L&MR)),Washington,DC,20301 8. PERFORMING ORGANIZATIONREPORT NUMBER 9. SPONSORING/MONITORING AGENCY NAME(S) AND ADDRESS(ES) 10. SPONSOR/MONITOR S ACRONYM(S) 11. SPONSOR/MONITOR S Report NUMBER(S) 12. DISTRIBUTION/AVAILABILITY STATEMENT Approved for public release; distribution unlimited 13. SUPPLEMENTARY NOTES 14. ABSTRACT 15. SUBJECT TERMS 16. SECURITY CLASSIFICATION OF: 17. LIMITATION OF ABSTRACT Same asReport (SAR) 18. NUMBEROF pages 112 19a. NAME OFRESPONSIBLE PERSON a. Report unclassified b. ABSTRACT unclassified c. THIS PAGE unclassified Standard Form 298 (Rev. 8-98) Prescribed by ANSI Std Z39-18 DoD Product Support BCA Guidebook April 2011 Page 3 Table of Contents INTRODUCTION TO THE PRODUCT SUPPORT BCA.

3 5 1. Introduction and Purpose .. 5 Introduction .. 5 Guidebook Purpose .. 6 2. People .. 6 Audience .. 7 Sponsor .. 7 Owner .. 7 Functions, Roles, and Responsibilities .. 7 3. Data Management .. 10 Data Management Introduction .. 10 Recommended Authoritative Data Sources .. 11 PRODUCT SUPPORT BCA PROCESS .. 13 4. Product Support BCA Outline .. 13 Executive Summary (Product Support BCA) .. 13 Introduction (Product Support BCA Main Body) .. 14 Desired Outcomes and Requirements .. 16 Assumptions and Methods .. 17 Alternatives .. 20 Mission and Business Impacts .. 24 Risk Analysis and Mitigation Plans .. 30 Sensitivity Analysis .. 32 Conclusion .. 33 Recommendations .. 33 5. Governance, Validation, and Approval .. 35 Governance .. 36 Validation and Approval .. 36 6. Documentation .. 36 Lessons Learned and Best Practices .. 36 Documentation .. 36 Revalidation Analysis of Product Support Strategy BCAs.

4 37 DoD Product Support BCA Guidebook April 2011 Page 4 Appendix A Product Support BCA Checklist and Phases .. 38 Product Support BCA Checklist .. 38 Product Support BCA Process Flow .. 42 Appendix B Guidelines for Capturing Cost .. 43 Appendix C Product Support BCA Timeline and Life Cycle .. 44 Appendix D Analytical Tools .. 47 Appendix E Glossary of Terms .. 104 Appendix F Acronyms .. 107 Appendix G Product Support BCA Policies, Statutes, and References .. 110 DoD Product Support BCA Guidebook April 2011 Page 5 INTRODUCTION TO THE PRODUCT SUPPORT BCA 1. Introduction and Purpose Introduction The Product Support Business Case Analysis (BCA) is a structured methodology and document that aids decision making by identifying and comparing alternatives by examining the mission and business impacts (both financial and non financial), risks, and sensitivities. BCAs may be somewhat different from other decision support analyses through their emphasis of the enterprise wide perspective of stakeholders and decision makers and assessment of the holistic effects impacted by the decision.

5 Other names for a BCA are Economic Analysis, Cost-Benefit Analysis, and Benefit-Cost Analysis. Broadly speaking, a BCA is any documented, objective, value analysis exploring costs, benefits, and risks. The Product Support BCA concludes with a recommendation and associated specific actions and an implementation plan to achieve stated organizational objectives and desired outcomes. One principle application of the Product Support BCA guidebook is to assist the Product Support Manager (PSM) in identifying the product support strategy that achieves the optimal balance between Warfighter capabilities and affordability. The Product Support BCA does not replace the judgment of a decision maker. Rather, it provides an analytic, standardized, and objective foundation upon which credible decisions can be made. The Product Support BCA should be a comprehensive, fair, and accurate comparison when evaluating multiple alternatives.

6 It should take into account broad Department wide impacts and context throughout the analysis. The PSM prepares a Product Support BCA for major product support decisions, especially those that result in new or changed resource requirements. The Product Support BCA helps leadership with significant investment and strategic decisions across all applications of Product Support. For example, Product Support BCAs may support decisions on whether or not to transform business operations, develop a web-based training curriculum, develop solutions to any of the Integrated Product Support Elements (IPS Elements), or retire an asset. Product Support BCA Structure The Product Support BCA has three major elements: the purpose, process components, and quality foundation (see Figure 1). The BCA purpose identifies the problem statement, objectives, and metrics. The items of this element should clearly annotate what issue the BCA is attempting to solve and how success will be measured.

7 The BCA process components are those subsections of the BCA that directly execute and Report on analytical actions. The third major BCA element contains the supporting foundation of the BCA that directly affects the quality and completeness of the analysis. Background research, due diligence, governance, and data management and control underlie and prop up the entire process. Governance represents the oversight and enterprise wide context that helps to steer the analysis throughout the process. The three elements work together to ensure the Product Support BCA targets the relevant subject matter, credibly analyzes and reports the results, and integrates into the organization s mission and leadership s vision. DoD Product Support BCA Guidebook April 2011 Page 6 Figure 1: Product Support BCA Elements Guidebook Purpose The purpose of this guidebook is to provide a standardized process and methodology for writing, aiding decision making, and providing analytical decision support for a Product Support BCA.

8 This guidebook is organized into two sections: Introduction to the Product Support BCA; providing the background, people, roles and responsibilities, and data management involved in creating a Product Support BCA The Product Support BCA Process; providing the method of preparing the Product Support BCA, including research, data analyses, and delivery of a Product Support BCA Report 2. People The People section provides guidance on assembling a Product Support BCA team. It addresses involving the right stakeholders at the kickoff meeting and assembling the Governance structure and board. While the PSM is statutorily responsible for the BCA, the conducting of a Product Support BCA is a team effort undertaken by experienced participants across a wide range of specialties (See Table 1). Many BCAs have an expert analyst as the team lead specific to the BCA effort. This does not relieve the PSM of his/her statutory Each position identified 1 Reference Appendix G, National Defense Authorization Act (NDAA) 2010 Section 805 DoD Product Support BCA Guidebook April 2011 Page 7 in this section should be filled by highly competent and dedicated personnel who are given the resources, time, and money to fully and properly perform the tasks required.

9 From the initial stages of accomplishing the background research and gathering the data, through the final stages of staffing the Product Support BCA for senior Department decision makers, it must be expected that conducting the Product Support BCA requires significant effort by all those involved. Audience This guide was designed for the Product Support Manager (PSM) as the primary user while also providing valuable insight to budget and business managers, senior decision makers, approval authorities, and stakeholders. Sponsor The sponsor is the primary decision maker. Depending on the size, scope, and sensitivity of the decision, it may be the Milestone Decision Authority (MDA), Program Executive Office (PEO), etc. The sponsor assigns the owner and uses Product Support BCA recommendations and findings to assist in decision making. The sponsor may help identify and agree to the uses of assumptions, constraints, and other metrics, most notably the weighting of factors importance.

10 Owner The owner of the Product Support BCA is most often the program office. The program office employee responsible for the Product Support Strategy BCAs of major defense acquisition programs is the PSM. The Program Manager (PM) is the primary executer of the actions and recommendations derived out of the BCA. Within the program office, the PSM has the responsibility to plan, develop, implement, and execute the Product Support Strategy, informed by the Product Support BCA. The PM estimates the cost of conducting and obtains resources necessary for accomplishing the Product Support BCA. By statute, the PSM, while reporting to the PM, owns and is responsible for the Product Support BCA. To avoid a biased analysis to the maximum extent possible, the PSM should employ an objective, independent team to execute the analysis and provide the BCA recommendations. If an independent third party resource is not possible, the PSM should ensure objective analysis through maximizing structured analysis in a transparent manner.