How to Create a Problem Statement in Business Analysis

By Kupe Kupersmith, Paul Mulvey, Kate McGoey

After the business has decided a problem is worth pursuing in its analysis, you should create a problem statement. A problem statement is the conglomeration of four key elements into one expression to convey the issue at hand:

  • Root cause problem

  • Impacted stakeholders/product users

  • Impacts of the issues

  • Effects a successful solution must include

The problem statement is a critical component of a project’s statement of purpose or charter. The reason to write a problem statement is so that all members on the project team are absolutely clear on what they’re working on solving. If different team members understand the problem differently, you may end up having to address conflicts while creating and prioritizing requirements for the solution.

A problem statement generally follows the format of “The problem of W affects X, the impact of which is Y, so a successful solution would be to Z.” Here’s how to figure out how to put it all together:

  • “The problem of [statement of problem] . . .”: What’s the goal or need of the audience; what’s the root cause problem your target market is trying to solve? What do stakeholders struggle with; what concerns do they have? Which detailed or lower-level problems are buried under bigger problems? Are the important issues called out?

  • “. . . affects [users and/or stakeholders] . . .” Who specifically is impacted? This list isn’t limited to just the problem-sufferer; it includes others also affected directly or indirectly.

  • “. . . the impact of which is [statement of issues, costs, or other impacts].” Lacking a solution (preferably yours), what are the impacts and outcomes suffered as a result of the business problem? (In other words, what’s the business driver; why may the company be compelled to solve the problem?)

  • “A successful solution would be to [important benefits that would successfully solve the problem].” What characteristics and qualities does an acceptable and/or compelling solution include? What would a (generic) solution do or have that addresses or resolves key issues and needs? A solution providing these benefits or capabilities would be just what the users need, with post-solution results or outcomes adding value.

A good example of a problem statement may be

The problem of customers smoking in our rooms affects other customers, who don’t appreciate the smoke and smell, and our housekeeping staff, who spend significantly more time cleaning smoking rooms versus nonsmoking ones, the impact of which is low customer satisfaction, reduced occupancy rates, and increased cleaning costs. A successful solution would be to eliminate smoking and smoking effects from our hotel rooms and readdress those impacts.

Focus on features or functions most valuable to the business strategy and to the customer. Articulate customer-focused problem statements, not business-focused problem statements. For example, the problem statement in the hotel-based example relates to the customers, not the hotel occupancy decline.