It allows the author to create an entire universe tailored to their specifications -- but it can be a lot of work. The author needs to know the timeframe relative to the present day, whether the characters are human, alien, or a mix of both, and the planets/stars/universe they inhabit. Here are some questions to answer to help get you started:
Science versus magic:
Are you going to base your universe on some version of the laws of science, some kind of magic? Some combination thereof? Can you make your reader believe it? If you're creating a fantasy based on magic, you will need to establish the laws of magic and how they work.
Scope of your universe:
Stars and planets? If so, how many? Planes of reality? If so, what are they?
Describing the planet:
What is the geography? Climate? Plants and animals? Continents, oceans, etc. Do you need a map?
Culture? Level of technology? What is the history? Political organization? Cities?
Society and values? Arts? Economic organization? Laws? Language?
You need to describe both the physical features of your aliens and their culture.
What do they look like? What do they eat? What are their families like? What are their homes like? How do they govern themselves? How do they interact with humans? Can they interbreed with humans, and if so, can you make this believable?
Conventions of the genre:
Speaking of language, science fiction novels often include "futuristic" vocabulary, replacements for everyday words, perhaps FTL travel or other futuristic technology. You'll want to create words and explanations that will encourage your readers to believe the action takes place in the future but also be understandable to present-day readers.
If your action takes place in the future, you will also need to establish, at least to some extent, the arc of history between the present day and the era of your story. How much you need depends on what you write. What do you think is the hardest part of world building? Please feel free to share your thoughts in the comments section. Good luck, and most of all, have fun.