A useful business case makes the economics easy to challenge.
Start with the baseline
Record the current state before modelling the future:
- annual transaction or case volume;
- current time per case;
- error or rework rate;
- delay or queue time;
- loaded labour cost;
- current software or supplier cost;
- current conversion, churn or service metrics where relevant.
For every important input, record its source and confidence level.
Model the expected change
Translate the intervention into operational assumptions such as:
- minutes saved per case;
- percentage of cases affected;
- adoption rate;
- reduction in rework;
- increase in throughput;
- reduction in cycle time;
- improvement in conversion.
Do not jump straight from “AI is introduced” to a financial number. Explain the mechanism that creates value.
Separate value types
Capacity value
Useful time becomes available for other work. This is not automatically a cash saving.
Cost avoided
The change prevents a future cost, such as an additional hire or external service.
Cash saving
A cost genuinely leaves the P&L.
Revenue value
The change creates more sales, conversion or retention through a defensible causal mechanism.
Include the full cost
Model:
- implementation;
- integration;
- licences and infrastructure;
- testing;
- training and change;
- ongoing support;
- internal client effort where material.
Build scenarios
Use conservative, base and upside cases. Vary only the assumptions that materially drive the result.
Avoid adding multiple benefit categories that describe the same underlying improvement. Capacity, avoided hiring and cash saving can easily be double-counted.
