# 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.

<!--
Guidance: How to use this template
- Write the strategic case (section 2) first. If you cannot state the
  case for change and the investment objectives clearly, the numbers
  later will not rescue the business case.
- Always keep a "do nothing" or "business as usual" option as the
  baseline. Every other option is measured against it.
- Keep each figure traceable to an assumption in section 4.6 so reviewers
  can challenge inputs rather than conclusions.
- Scale the depth to the investment: a strategic outline case can leave
  sections 5 and 7 brief; a full business case completes every section.
-->

## Document control

<!-- Guidance: Record the stage of the business case (outline, full) and who must approve it. Approval without a named decision maker is not approval. -->

| Field | Value |
|---|---|
| Document ID | [BC-YYYY-001] |
| Initiative | [Initiative name] |
| Stage | [Strategic outline / Outline business case / Full business case] |
| Version | [0.1] |
| Status | [Draft / In review / Approved / Rejected / Deferred] |
| Senior responsible owner | [@sponsor] |
| Author(s) | [@author] |
| Finance reviewer | [@finance] |
| Investment requested | [currency amount, capital and operating] |
| Decision forum | [Investment committee / Board / Steering group] |
| Last updated | YYYY-MM-DD |

### Approvals

| Role | Name | Decision | Date | Conditions |
|---|---|---|---|---|
| Senior responsible owner | [@name] | [Endorsed / Not endorsed] | YYYY-MM-DD | [Any conditions] |
| Chief financial officer | [@name] | [Approved / Changes requested] | YYYY-MM-DD | [Conditions] |
| Investment committee chair | [@name] | [Approved / Rejected / Deferred] | YYYY-MM-DD | [Conditions] |
| Head of procurement | [@name] | [Commercial route agreed] | YYYY-MM-DD | [Conditions] |

## Revision history

<!-- Guidance: Summarise what changed in the case, especially changes to the preferred option, costs or benefits. -->

| Version | Date | Author | Change summary |
|---|---|---|---|
| 0.1 | YYYY-MM-DD | [@name] | First draft of strategic case and long list |
| 0.2 | YYYY-MM-DD | [@name] | *Example:* Added economic appraisal for three short-listed options |
| 1.0 | YYYY-MM-DD | [@name] | *Example:* Approved by investment committee with conditions |

## Contents

<!-- Guidance: Keep the list aligned with the headings below. -->

1. [Executive summary](#1-executive-summary)
2. [Strategic case](#2-strategic-case)
3. [Options appraisal](#3-options-appraisal)
4. [Economic case](#4-economic-case)
5. [Commercial case](#5-commercial-case)
6. [Financial case](#6-financial-case)
7. [Management case](#7-management-case)
8. [Risks](#8-risks)
9. [Recommendation](#9-recommendation)
10. [Appendices](#10-appendices)

## 1. Executive summary

<!-- Guidance: One page a decision maker can read alone. State the problem, the preferred option, its cost, its value, the main risk and the decision requested. Write it last. -->

[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.

| Item | Summary |
|---|---|
| Decision requested | [Approve funding of amount for phase 1 / proceed to full business case] |
| Preferred option | [Option name and one-line description] |
| Total cost (whole life) | [amount over N years, undiscounted] |
| Net present value | [amount at r% discount rate] |
| Internal rate of return | [N%] |
| Payback period | [N years, N months] |
| Key benefits | [Top three benefits with measures] |
| Key risks | [Top two risks and their mitigation] |
| Delivery timeline | [Start date to completion date] |

*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

<!-- Guidance: Show that the investment fits the organisation's strategy and that there is a compelling case for change. Avoid describing a solution here; describe the need. -->

### 2.1 Organisational overview and strategic context

<!-- Guidance: Which strategy, plan or policy does this support? Quote objectives by name and reference, not by paraphrase. -->

[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

<!-- Guidance: Describe the current state, its problems, and what happens if nothing changes. Quantify wherever you can. -->

| Aspect | Current state | Problem or constraint | Evidence |
|---|---|---|---|
| *Example:* Process | Orders keyed manually from email into two systems | 11 minutes average handling time; 4.2% rekey error rate | Process audit, March YYYY |
| *Example:* Technology | Order platform out of vendor support since YYYY | No security patches; outage risk | Vendor notice, IT risk register R-014 |
| [Aspect] | [Current state] | [Problem] | [Source] |

### 2.3 Investment objectives

<!-- Guidance: Objectives should be SMART and outcome-focused. They become the criteria for appraising options. -->

| ID | Objective | Measure | Baseline | Target | By when |
|---|---|---|---|---|---|
| IO-01 | *Example:* Reduce order handling cost | Cost per order | 6.40 | 4.35 | Q4 YYYY |
| IO-02 | *Example:* Remove unsupported platform risk | Critical systems out of support | 1 | 0 | Q2 YYYY |
| IO-03 | [Objective] | [Measure] | [Baseline] | [Target] | [Date] |

### 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

<!-- Guidance: Show a fair, wide search for options before narrowing. Decision makers distrust a case that only ever had one real option. -->

### 3.1 Long list

<!-- Guidance: Generate options across dimensions: scope, solution, delivery, implementation timing and funding. Assess each against the investment objectives and critical success factors. -->

| ID | Option | Description | Meets objectives? | Result |
|---|---|---|---|---|
| OP-0 | Do nothing | Continue current arrangements | No | Baseline (carried forward) |
| OP-1 | *Example:* Do minimum | Extend vendor support, patch critical issues | Partially | Carried forward |
| OP-2 | *Example:* Build in house | Develop a new platform internally | Yes | Discounted: skills gap, 30-month timeline |
| OP-3 | *Example:* SaaS with phased migration | Subscribe to a SaaS platform; migrate by region | Yes | Carried forward (preferred) |
| OP-4 | *Example:* SaaS big-bang migration | Same platform, single cut-over | Yes | Carried forward |

### 3.2 Critical success factors

| ID | Critical success factor | How it is assessed |
|---|---|---|
| CSF-1 | Strategic fit | Contribution to IO-01 to IO-03 |
| CSF-2 | Value for money | NPV and benefit-cost ratio |
| CSF-3 | Achievability | Skills, timeline and supplier capacity |
| CSF-4 | Affordability | Fits within capital and operating budgets |

### 3.3 Short list

<!-- Guidance: The short list always includes the do-nothing baseline, a do-minimum option and the preferred option. -->

| Option | CSF-1 | CSF-2 | CSF-3 | CSF-4 | Overall |
|---|---|---|---|---|---|
| OP-0 Do nothing | Low | n/a (baseline) | High | High | Baseline |
| OP-1 Do minimum | Low | Low | High | High | Not preferred |
| OP-3 SaaS phased | High | High | Medium | Medium | **Preferred** |
| OP-4 SaaS big-bang | High | Medium | Low | Medium | Possible |

## 4. Economic case

<!-- Guidance: Compare whole-life costs and benefits of each short-listed option against the baseline. Show your formulas and assumptions. -->

### 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
$C_0$:

$$
NPV = \sum_{t=1}^{T} \frac{CF_t}{(1+r)^t} - C_0
$$

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

| Cost line | OP-1 Do minimum | OP-3 SaaS phased | OP-4 SaaS big-bang |
|---|---|---|---|
| *Example:* Initial investment $C_0$ | 150,000 | 900,000 | 780,000 |
| *Example:* Annual licences and support | 210,000 | 260,000 | 260,000 |
| *Example:* Internal staff (annual) | 340,000 | 180,000 | 180,000 |
| [Cost line] | [amount] | [amount] | [amount] |
| **Whole-life cost (5 years, undiscounted)** | [total] | [total] | [total] |

### 4.3 Benefits by option

<!-- Guidance: Classify each benefit: cash-releasing, non-cash-releasing (time saved), or qualitative. Do not count the same saving twice. -->

| ID | Benefit | Type | Measure | Annual value (OP-3) | Owner |
|---|---|---|---|---|---|
| BN-01 | *Example:* Lower order handling effort | Cash-releasing | Cost per order 6.40 to 4.35 | 615,000 | @ops-director |
| BN-02 | *Example:* Avoided outage cost | Risk reduction | Expected loss avoided | 90,000 | @cio |
| BN-03 | *Example:* Faster quote turnaround | Qualitative | Days from request to quote | Not monetised | @sales-director |

### 4.4 Results

| Measure | OP-1 | OP-3 | OP-4 |
|---|---|---|---|
| NPV at [r%] | [amount] | [amount] | [amount] |
| IRR | [N%] | [N%] | [N%] |
| Payback | [N years] | [N years] | [N years] |
| Benefit-cost ratio | [N.N] | [N.N] | [N.N] |

*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.]

| Assumption | Base value | Tested range | NPV at worst case | Switching value |
|---|---|---|---|---|
| *Example:* Benefit realisation | 100% | 60% to 110% | 230,000 | Benefits fall below 54% |
| *Example:* Migration duration | 9 months | 9 to 15 months | 870,000 | Over 26 months |

### 4.6 Assumptions register

| ID | Assumption | Source | Confidence |
|---|---|---|---|
| AS-01 | *Example:* Order volume grows 4% a year | Sales forecast FY YYYY | Medium |
| AS-02 | [Assumption] | [Source] | [High / Medium / Low] |

## 5. Commercial case

<!-- Guidance: Show that a viable deal can be struck: what will be bought, from whom, on what terms, and who carries which risk. -->

### 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

| Requirement | Specification summary | Contract type |
|---|---|---|
| *Example:* SaaS order platform | Multi-region, 99.9% availability, EDI support | Subscription, 3 years plus 2 |
| *Example:* Migration services | Data migration and integration build | Fixed price with milestones |

### 5.3 Risk allocation

| Risk | Client | Supplier | Shared |
|---|---|---|---|
| *Example:* Platform availability | | X | |
| *Example:* Data quality before migration | X | | |
| *Example:* Integration delays | | | X |

### 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

<!-- Guidance: Shift from value to affordability. Show cash, budget lines and funding sources, including what happens if funding is short. -->

### 6.1 Capital and revenue requirements

| Line | FY1 | FY2 | FY3 | FY4 | FY5 | Total |
|---|---|---|---|---|---|---|
| Capital | [amount] | [amount] | [amount] | [amount] | [amount] | [total] |
| Operating | [amount] | [amount] | [amount] | [amount] | [amount] | [total] |
| Savings released | [amount] | [amount] | [amount] | [amount] | [amount] | [total] |
| **Net impact** | [amount] | [amount] | [amount] | [amount] | [amount] | [total] |

### 6.2 Funding sources

| Source | Amount | Status | Conditions |
|---|---|---|---|
| *Example:* Capital programme FY YYYY | 900,000 | Allocated | Release on approval of full case |
| *Example:* Operating budget, IT | 260,000 per year | Requested | Offset by decommissioning legacy licences |

### 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

<!-- Guidance: Prove the organisation can deliver the option and realise the benefits. Name people, not departments. -->

### 7.1 Delivery plan

| Phase | Key deliverables | Start | End | Gate |
|---|---|---|---|---|
| *Example:* Mobilise | Supplier contract signed, team in place | YYYY-MM-DD | YYYY-MM-DD | Gate 1 |
| *Example:* Region 1 migration | First region live, legacy read-only | YYYY-MM-DD | YYYY-MM-DD | Gate 2 |
| *Example:* Full roll-out and decommission | All regions live, legacy switched off | YYYY-MM-DD | YYYY-MM-DD | Gate 3 |

### 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.]

| Role | Name | Responsibility |
|---|---|---|
| Senior responsible owner | [@name] | Accountable for benefits and the case |
| Project manager | [@name] | Day-to-day delivery within tolerances |
| Benefits owner | [@name] | Tracks and reports benefits after go-live |

### 7.3 Benefits realisation

| Benefit ID | Measure | Baseline | Target | Measurement date | Owner |
|---|---|---|---|---|---|
| BN-01 | Cost per order | 6.40 | 4.35 | YYYY-MM-DD | [@name] |
| BN-02 | Critical systems out of support | 1 | 0 | YYYY-MM-DD | [@name] |

### 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

<!-- Guidance: List the risks to delivery and to the benefits. Score them consistently and name an owner for each. -->

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

| ID | Risk | L | I | Score | Mitigation | Owner |
|---|---|---|---|---|---|---|
| RK-01 | *Example:* Legacy data quality delays migration | 4 | 4 | 16 | Data cleansing sprint before Gate 2 | @data-lead |
| RK-02 | *Example:* Staff adoption lower than planned | 3 | 4 | 12 | Super-user network, phased training | @ops-director |
| RK-03 | [Risk] | [1-5] | [1-5] | [L x I] | [Mitigation] | [@owner] |

## 9. Recommendation

<!-- Guidance: State the decision requested precisely, including amount, scope, conditions and the next gate. -->

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

<!-- Guidance: Put detailed models and evidence here so the body stays readable. -->

- 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.