Business Case: [Initiative name]

Full business case for an investment decision, structured around the five-case model concepts: strategic, economic, commercial, financial and management. It sets out why change is needed, which option offers the best value, whether it can be bought and afforded, and how it will be delivered. Replace every [bracketed] value and every row marked Example. This is a document format, not financial advice: have your finance team validate every figure and discount rate.

Document control

Approvals

Revision history

Contents

1. Executive summary
2. Strategic case
3. Options appraisal
4. Economic case
5. Commercial case
6. Financial case
7. Management case
8. Risks
9. Recommendation
10. Appendices

1. Executive summary

[Initiative name] addresses [problem in one sentence]. We assessed [N] options against a do-nothing baseline. The preferred option is [option name], which costs [amount] over [N] years and delivers a net present value of [amount] with a payback period of [N] years.

Example: "Replacing the legacy order management system reduces order handling cost by 32% and removes an unsupported platform that carries an estimated 18% annual probability of a major outage. Option 3 (SaaS platform with phased migration) costs 2.4M over five years and returns an NPV of 1.1M at an 8% discount rate."

2. Strategic case

2.1 Organisational overview and strategic context

[Describe the organisation or business unit, its strategy, and the objectives this initiative supports. Reference the plan by name and year, for example "Operations Strategy 2026-2029, objective 3: reduce cost to serve".]

2.2 Case for change

2.3 Investment objectives

2.4 Scope, constraints and dependencies

[State the minimum, intermediate and maximum scope considered. List constraints such as budget ceilings, regulatory deadlines or freeze periods, and dependencies on other programmes.]

• Constraints: [for example, capital budget capped at amount in FY YYYY]
• Dependencies: [for example, identity platform upgrade completes by YYYY-MM-DD]
• Stakeholders: [who is affected and who must agree]

3. Options appraisal

3.1 Long list

3.2 Critical success factors

3.3 Short list

4. Economic case

4.1 Appraisal method

Each option is appraised over [N] years at a discount rate of [r%] agreed with finance. Net present value (NPV) discounts each year's net cash flow $CF_t$ back to today and subtracts the initial investment $C_0$:

The internal rate of return (IRR) is the discount rate at which NPV is zero. Payback is the time until cumulative net cash flow turns positive. The benefit-cost ratio is the present value of benefits divided by the present value of costs.

4.2 Costs by option

4.3 Benefits by option

4.4 Results

Example: With $C_0 = 900{,}000$, net annual cash flows of 525,000 for five years and $r = 8\%$, the present value of inflows is about 2,096,000, so NPV is about 1,196,000 and payback falls in year 2.

4.5 Sensitivity and switching values

[Show how the result changes when key assumptions move. A switching value is the change in one input that would make the preferred option no longer best.]

4.6 Assumptions register

5. Commercial case

5.1 Procurement strategy

[Describe the route to market: framework call-off, open tender, competitive negotiation, direct award with justification. State the evaluation approach and timeline.]

5.2 Required services and outputs

5.3 Risk allocation

5.4 Payment mechanism and key terms

[Summarise payment milestones, service credits, exit and data return provisions, and any personnel or asset transfer implications. Have the final terms reviewed by legal counsel.]

6. Financial case

6.1 Capital and revenue requirements

6.2 Funding sources

6.3 Affordability gap and impact on accounts

[State any gap between required and available funding and how it will be closed. Describe the expected effect on the income statement and balance sheet, such as capitalised implementation costs and depreciation, as confirmed by finance.]

7. Management case

7.1 Delivery plan

7.2 Governance

[Describe the governance structure: senior responsible owner, steering group, project board, design authority, reporting frequency and tolerances that trigger escalation, such as a cost overrun over 10% or a delay over four weeks.]

7.3 Benefits realisation

7.4 Change management, assurance and post-implementation review

[Explain the training, communication and process-change plan. Describe independent assurance points and when a post-implementation review will compare actual costs and benefits with this case.]

8. Risks

Score each risk as likelihood times impact on a 1 to 5 scale, so $Score = L \times I$ ranges from 1 to 25.

9. Recommendation

It is recommended that [decision forum] approves [option] at a total cost of [amount], with phase 1 funding of [amount] released now and the remainder subject to Gate [N] review on YYYY-MM-DD.

• Conditions: [for example, supplier contract signed within budget]
• Next steps: [for example, issue tender by YYYY-MM-DD]

10. Appendices

• Appendix A: Economic model workbook [link]
• Appendix B: Long-list assessment detail [link]
• Appendix C: Stakeholder consultation summary [link]
• Appendix D: Glossary of terms such as NPV, IRR, payback and switching value

Standard and licence note

Based on common business case practice using the publicly described five-case model concepts (strategic, economic, commercial, financial and management). This template is original text written for this collection and reproduces no text from any official guidance; consult your organisation's investment appraisal rules for mandatory content. This is a document format, not financial advice. Template licence: MIT.