COMPEL Glossary / business-case
Business Case
A business case is a structured document or analysis that provides the financial and strategic justification for an AI investment by quantifying expected costs, benefits, risks, timelines, and alternative options.
What this means in practice
It serves as the basis for securing executive approval and funding, and later as the benchmark against which actual results are measured. For AI transformation, business cases are uniquely challenging because benefits are often indirect, uncertain, and delayed, requiring sophisticated attribution methodologies and conservative estimation practices. In COMPEL, business case development is covered in Module 3.1, Article 7 on strategic investment and business case architecture, where the AITGP learns to construct multi-horizon business cases that account for capability compounding, option value, and the J-curve effect common in transformation investments.
Why it matters
AI transformation business cases are uniquely challenging because benefits are often indirect, uncertain, and delayed, requiring sophisticated attribution methodologies and conservative estimation practices. Organizations that apply traditional business case approaches to AI investments either overstate benefits (leading to eventual disillusionment) or understate the case by missing capability compounding and option value. Rigorous business case development is essential for securing and sustaining executive support.
How COMPEL uses it
Business case development is covered during the Model stage where multi-horizon investment architecture is designed. The Calibrate stage provides the baseline data that business cases are built upon. During Produce, actual costs are tracked against projections. The Evaluate stage compares realized benefits to business case projections, and the Learn stage captures lessons about estimation accuracy to improve business case methodology in future COMPEL cycles.
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Related Terms
Other glossary terms mentioned in this entry's definition and context.