A Business Case is a methodology to assess the efficiency, effectiveness, and accountability of a new initiative, project, or product within an organization. The case is the product of a business review process which is used to assess the long-term viability of acquiring a capital asset or assets (in present day dollars). The case balances the need for prudence regarding cost with the projected effectiveness of the expenditure(s).

A business case differs from a business plan, in that the business plan typically applies to the entire business of the organizational entity, while the case is specific to one or a few aspects of the business.

The business case assesses, estimates and assigns quantifiable factors to business variables (e.g., options, financial, risk, stakeholder involvement) within a specific business environment in order to make a decision. Business case development is a complex undertaking, normally requiring advanced study in the areas of: finance, risk analysis, statistics and other social science and mathematical disciplines. It may also require significant industry or sectoral knowledge.

Depending on asset cost, opportunity cost, risk and other quantifiable factors; the business case recommends a course of action that best meets your organization's specific needs at a specified time.

A net present value (NPV) and internal rate of return (IRR) analysis is normally used to asses the reasonableness of aquiring an asset that provides a steady stream of cashflow. The goal is to have the asset pay back the initial debt required to purchase it within a specific period of time or to enter into an arrangement wherein the risk of a given project is allocated to the parties that best manage it; such as occurs in pubic-private-partnership (P3) style arrangements (e.g., http://www.fhwa.dot.gov/PPP/options.htm).

Business cases are complex documents which attempt to quantity and describe factors which may or may not be readily quantifiable. In this sense, business case recommendations should always be viewed as reasonable estimates or courses of action, rather than as definitive. A sample business case template and titles is as follows:

Sample Business Case Template:

• Executive Summary
• Background
• Problem/Opportunity Statement
• Current Situation
• Program Description 
• Project Description  
• Strategic Alignment
• Objectives
• Scope
• Out of Scope
• Anticipated Outcomes
• Stakeholders
• Environmental Analysis
• Alternatives
• Business & Operational Impacts
• Project Risk Assessment
• Risk of Project and each Alternative (Not including Status Quo)
• Risk of Not Proceeding with Project (Status Quo)
• Quantitative Analysis – Financial Benefits & Costs
• Qualitative Analysis – Non-Financial Benefits & Costs
• Implementation Strategy
• Assumptions
• Conclusions
• Recommendations
• Project Responsibility & Accountability
• Review Process
• Approval Process
• Business Case Signoff