© 2013 eXegy Partners LLC – All Rights Reserved 

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Business RequirementsA Hints and Tips sheet on how to develop high quality Business Requirements

Interviewer : Why do you need to keep supplier A?Stakeholder : They are on the preferred supplier list!Interviewer : Why are they on the preferred supplier list?Stakeholder : Because my manager put them on there!Interviewer : Why did your manager place them on there?Stakeholder : Because he sees them as a good supplier!Interviewer : Why does he see them as a good supplier?Stakeholder : Because they do what we need them to!Interviewer : Why, what exactly do they do?Stakeholder : Well they……….

Actual Business Requirements Can support locations 1,2 & 3 Can provide us with skills A,B & C They are industry accredited They resolve problems in a

structured and effective manner They are contactable 7 days a week

and 24hrs a day They regularly approach us with

ideas on how to improve the working relationship

Assurance of Supply/Regulatory/Ethical Are you ever without the product/service when

required? Why is that? What are the greatest risks associated with the

continued availability of the product? Why? Are there any goods or services your suppliers

cannot provide which you need? Is any legal or regulatory compliance required? Are there any ethical considerations we must

observe? What are the Safety needs?

Quality Who defines the quality standards you work to? Which standards do you agree and disagree

with? Why? Which standards do suppliers find it hardest to

deliver consistently? Why?

Service What supplier information would enable you to

work effectively? Why? What frustrates you about the way your suppliers

service the account? How would you rate your supplier’s personnel?

Cost What cost pressures are you under with regards

this sector? What cost targets do you have? How have suppliers helped you to drive out

costs?

Innovation How much of your supplier’s goods or service

capabilities are you using? What could the team do to help create

competitive advantage in this area?

Regulatory What industry, customer or company standards

exist? How do they affect you and your suppliers? What restrictions or guidelines do your suppliers

place on you for operating with them?

General questions which will help ‘unlock’ key Business Requirements What are the factors which stop you from doing your job effectively? Who are your best and worst suppliers and why? Are the best available suppliers in the market being used? How can we be sure? Does your department miss, meet or exceed it’s targets? How and why? What influence if any does this sector have on your department’s targets performance? If you had the power to change anything about the sector, what would it be and why? How do other organisations manage this sector?

Business Requirements are fundamental to the strategic sourcing and supplier management processes.

They are requirements drafted by the team and edited, confirmed, and weighted by the business. They provide a way to define what the supplier needs to do/provide.

Needs vs. Wants / The 5 ‘Whys’ Most stakeholders will feel threatened by change. They will try to convince

the team that there is strong justification for every supplier used and supply chain activity undertaken. Your role is to distinguish between what they ‘want’ and what it is that stakeholders actually ‘need’ to do their jobs effectively.

One interviewing technique that can assist the project team in distinguishing between needs and wants, is by asking why questions until the discussion reaches a point of content.

Usually by the 5th why, stakeholders have begun to describe the reasoning behind their wants and helped the interviewer substantiate exactly what it is that they actually need. An example is this is shown below.

Stakeholder Interview QuestionsAn example of potential questions you may consider using when interviewing stakeholders is shown below.

Note: The stakeholder ‘wants’ to retain the services of Supplier A. What they actually ‘need’ are supply solutions that can deliver their actual business requirements.

© 2013 eXegy Partners LLC – All Rights Reserved 

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Business RequirementsThese criteria and definitions, form a framework for identifying Business Requirements.

Scope of Business Requirements

Assurance of Supply/ Regulatory / Ethical Right to Use

‘Factors directly associated with the availability and accessibility of goods or services when required, legal compliance and compliance with stated business ethical policies.’

Guaranteed availability of regulatory compliant goods/services when needed.

These include:

•Available capacity•Ability to ramp up and ramp down capacity•Quantities required, when and where•Legal and regulatory compliance•Environmental and similar ethical needs•Safety

Quality

‘Key features which ensure the performance of goods or services to a consistent, specified standard.’

Quality parameters include:

•Quality in design of goods or processes•Quality in meeting specifications•Quality in meeting the functional specifications•Reliability

Service

‘Factors which facilitate both company and the suppliers in the delivery of shared objectives.’

Service deliverables include:

•Lead-times and order flexibility horizon•On-time, In-Full Delivery•Electronic Data Interchange/web based access to information•Vendor scheduling•Inventory holding and staging•Co-location of production•Response times•Help Desk/Call Centre•Dedicated Account Manager•Continuous improvement

Scope of Business Requirements

Cost

‘All cost factors associated with the purchase, utilisation and management of the sector, sub-sector or category.’

Cost expectations include:

• Current and future cost requirements• Cost reduction/avoidance• Continuous improvement

Innovation

‘Continuous improvement of all parts of customer experience intended to reduce costs or creative competitive advantage.’

Innovation needs include:

•Preferred access for competitive advantage•New product plans•Use of leading-edge technology•Market-driven innovation

SMART Examples 1srt Pass – Not ‘SMART’ 2nd Pass – ‘SMARTer’

S – Specific • (Quality) “Meet specs’ • Meets Quality spec #xxx.xx dated yy/yy/yy

M- Measurable • (Service) “High-level of customer service’

• Response time within 2 hours, 24/7, 365 days

A- Attainable • (Assurance) ‘100% server uptime’

• No more than 1 hour in 1000 of downtime; none during business-critical time periods

R – Results-Oriented • (Cost) ‘Committed to continuous improvement’

• Tangible plans in place and committed to taking costs down 4% per year and passing through savings.

T – Time bound • (Innovation) ‘Need access to innovation for materials’

• Host quarterly innovation roundtables to share new products in development