A clear, compelling problem statement is the foundation of any successful AI procurement initiative. This document helps you articulate the business challenge you’re trying to solve, quantify its impact, and align stakeholders around your objectives.

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Why Create a Problem Statement?

Before evaluating AI vendors or exploring technical solutions, you need to clearly define what problem you’re trying to solve. A well-crafted problem statement:

  • Builds internal alignment among diverse stakeholders
  • Provides focus for vendor evaluations and requirements gathering
  • Enables objective decision-making by establishing concrete success metrics
  • Strengthens business cases with quantified impact and clear objectives
  • Prevents scope creep during vendor selection and implementation

Problem statements should focus on business outcomes, not technical specifications. The “what” and “why” should come before the “how.”

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Template Structure

The Kowalah Problem Statement template is designed to capture all essential information in a concise, one-page format:

# [Draft] Problem Statement: [AI Technology/Service Category] Purchase

## Problem
[Company name] is experiencing [brief description of challenge]. This affects [key stakeholders] and impacts [key metrics/outcomes].

## Background
Currently, we handle this by [current approach]. This leads to [limitations/issues].

## Relevance
Addressing this problem would help us achieve [business objectives/goals]. Key impacts include:
- [Impact 1]
- [Impact 2]
- [Impact 3]

## Objectives
### Primary Objective:
To implement [solution type] that will [specific outcome] by [timeframe], resulting in [measurable impact].

### Business Impact Objectives:
- [Specific cost/revenue/efficiency target]
- [Risk reduction or compliance goal]
- [Strategic alignment outcome]

### Implementation Objectives:
- [Timeline and milestone targets]
- [Adoption rate goal]
- [Integration requirement]

### Stakeholder Objectives:
- [User satisfaction metric]
- [Process improvement target]
- [Productivity enhancement goal]

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Section Breakdown

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Problem Section

This section succinctly describes the challenge your organization faces. It should:

  • Name your organization
  • Explain the challenge in non-technical terms
  • Identify affected stakeholders (at least 3 different groups)
  • Highlight key metrics or KPIs impacted

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Background Section

This section provides context about the current situation:

  • How is this challenge currently being addressed?
  • What are the limitations of the current approach?
  • How long has this been an issue?
  • What previous solutions have been attempted?

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Relevance Section

This section connects the problem to your organization’s strategic priorities:

  • Which business objectives would be supported by addressing this challenge?
  • What impact would solving this problem have on the organization?
  • Why should this be prioritized now?

The relevance section is crucial for gaining executive buy-in. It should directly connect to your organization’s strategic goals or KPIs.

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Objectives Section

This comprehensive section defines what success looks like across different dimensions:

Primary Objective The overarching goal of the initiative, including specific outcomes, timeframes, and measurable impacts.

Business Impact Objectives Concrete targets related to:

  • Cost savings or revenue growth
  • Risk reduction or compliance requirements
  • Strategic benefits or competitive advantages

Implementation Objectives Practical goals for the solution rollout:

  • Timeline expectations
  • Adoption metrics
  • Integration requirements with existing systems

Stakeholder Objectives Goals specific to different user groups:

  • User experience improvements
  • Process efficiency gains
  • Productivity enhancements

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Best Practices

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Be Specific and Measurable

Vague statements like “improve efficiency” are less effective than specific goals like “reduce report generation time from 3 hours to 15 minutes.”

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Include Multiple Stakeholder Perspectives

A strong problem statement should consider at least three different stakeholder groups affected by the problem (e.g., end users, IT support, executive leadership).

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Quantify the Impact

Use concrete metrics where possible:

  • Current time spent on manual processes
  • Error rates or quality issues
  • Financial implications of the current situation
  • Opportunity costs of the status quo

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Focus on Outcomes, Not Solutions

Describe what needs to be accomplished rather than prescribing specific technologies or approaches.

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Keep It Concise

Aim for a one-page document that executives can quickly understand and approve.

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Example Problem Statement

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Next Steps

After creating your problem statement:

  1. Validate with stakeholders to ensure the problem is accurately represented
  2. Quantify impact with additional data collection if needed
  3. Secure stakeholder approval before proceeding to solution exploration
  4. Share with your procurement team to guide vendor selection criteria
  5. Reference throughout the buying process to maintain focus on your original objectives

Business Case Template

Ready to kick off your buying project? Use our Business Case template to build alignment around your idea.

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