Business Cases

Business Cases is ProBeya's module for building, evaluating, and approving investment proposals. It combines structured business case documentation with a financial modeling engine that computes NPV, IRR, ROI, payback period, profitability index, and benefit-cost ratio. Multiple financial scenarios can be modeled and compared side by side, and a built-in approval workflow manages the decision process.

This module integrates with PPM projects, BSC initiatives, and strategy analyses for end-to-end traceability from strategic intent to investment decision to project execution.

Overview

Every transformation initiative, capital investment, or product launch requires a business case to justify the expenditure and set expectations for return. Without structured business case management, organizations suffer from:

• Inconsistent evaluation criteria across proposals.
• Missing financial analysis or unrealistic assumptions.
• Opaque approval processes with no audit trail.
• Inability to compare alternative investment options.

ProBeya's Business Cases module solves these problems by providing:

• Structured documentation for problem statements, proposed solutions, alternatives, assumptions, risks, and recommendations.
• Financial scenario modeling with itemized costs, benefits, cash flow projections, and discount rate configuration.
• Automated financial metric computation (NPV, IRR, ROI, payback period, profitability index, BCR) via a pure financial engine.
• Multi-scenario comparison to evaluate optimistic, baseline, and pessimistic assumptions side by side.
• Approval workflows with sequential approver chains and decision recording.
• Cross-module linking to PPM projects, BSC initiatives, and strategy analyses.

Getting Started

1. Navigate to the Business Cases section from your workspace menu.
2. Click New Business Case and provide:
   • A Title (e.g., "MES Upgrade for Line 3").
   • The Type of investment (see types below).
   • A Problem Statement describing what needs to change.
   • A Proposed Solution describing the recommended approach.
   • Alternatives considered and why they were not selected.
   • Assumptions and Risks underlying the proposal.
3. Add a Financial Scenario (e.g., "Baseline") with a discount rate and time horizon.
4. Within the scenario, add Cost Items (CAPEX, OPEX) and Benefits (revenue increases, cost savings).
5. Click Compute Financials to trigger the financial engine and generate NPV, IRR, ROI, and other metrics.
6. Optionally create additional scenarios ("Optimistic", "Pessimistic") and compare them.
7. Submit for Approval when the business case is ready for review.
8. Approvers review and record their decisions (approve, reject, or request changes).

Key Concepts

Term	Definition
Business Case	The top-level entity containing the investment justification narrative, financial scenarios, and approval chain.
Type	The category of investment. Determines the evaluation framework and required documentation.
Financial Scenario	A set of cost and benefit assumptions under a named scenario (e.g., "Baseline", "Best Case"). Each business case can have multiple scenarios.
Baseline Scenario	The primary scenario used for decision-making. Only one scenario per business case can be marked as baseline.
Cost Item	A line item in a scenario representing an expenditure, categorized as CAPEX, OPEX, one-time, or recurring.
Benefit	A line item representing a positive return, either revenue increase or cost saving, with an optional probability weighting.
Cash Flow	The year-by-year net difference between benefits and costs, used as input to the financial engine.
Computed Metrics	The financial indicators calculated by the engine: NPV, IRR, ROI, payback period, profitability index, and BCR.
Approval	A sequential decision point in the approval chain, with an approver, decision, and rationale.

Investment Types

ProBeya supports seven business case types:

Type	Key	Use Case
Initiative Justification	initiative_justification	General-purpose business case for any initiative.
Investment Appraisal	investment_appraisal	Formal appraisal of a capital investment with detailed financial modeling.
Cost Reduction	cost_reduction	Business case focused on reducing operational costs.
Transformation Program	transformation_program	Large-scale organizational or digital transformation.
Product Launch	product_launch	New product introduction with revenue projections.
Make vs. Buy	make_vs_buy	Comparison of building internally versus purchasing externally.
Custom	custom	Freeform business case for scenarios not covered above.

How It Works

Business Case Lifecycle

Business cases progress through a managed lifecycle:

Status	Description
Draft	Initial creation and editing. Financial scenarios can be added and modified freely.
Under Review	The business case has been submitted for approval. Edits may be restricted during review.
Approved	All approvers have approved the business case. Execution can begin.
Rejected	One or more approvers have rejected the business case. Revisions are needed.
Archived	The business case has been superseded or is no longer active.

Financial Scenario Modeling

Each financial scenario contains:

• Scenario Name: A descriptive label (e.g., "Conservative", "Baseline", "Aggressive").
• Currency: The currency for all monetary values (default: EUR).
• Discount Rate: The rate used for NPV and discounted payback calculations (default: 10%).
• Time Horizon: The number of years to model (default: 5 years).
• Cost Items: Itemized expenditures by year, category, and frequency.
• Benefits: Itemized returns by year, type, and probability.
• Cash Flows: Computed year-by-year breakdown of CAPEX, OPEX, revenue, savings, and net cash flow.

Cost Item Categories

Category	Description
capex	Capital expenditure (equipment, infrastructure, one-time investments).
opex	Operating expenditure (ongoing costs, licenses, salaries).
one_time	One-time costs not classified as CAPEX.
recurring	Costs that repeat on a defined frequency.

Cost items can have a growth rate for modeling cost escalation over the time horizon.

Benefit Types and Probability Weighting

Benefits can be typed as revenue increases or cost savings. Each benefit has an optional probability field (0.0 to 1.0) that weights the expected return. For example, a benefit of 500,000 EUR with a probability of 0.7 contributes 350,000 EUR to the cash flow.

Benefits with isQuantifiable: false are documented but excluded from financial calculations. These capture qualitative benefits (e.g., "improved employee morale") that support the narrative but cannot be monetized.

Financial Engine

The computeFinancials procedure triggers the financial engine, which:

1. Aggregates cost items by year to build a cost-by-year array.
2. Aggregates benefits by year (weighted by probability) to build a benefits-by-year array.
3. Computes year-by-year cash flows (net cash flow = benefits minus costs).
4. Calculates all financial metrics from the cash flow stream.

The engine computes six metrics:

Metric	Formula	Interpretation
NPV (Net Present Value)	Sum of discounted cash flows	Positive NPV means the investment creates value. Higher is better.
IRR (Internal Rate of Return)	Discount rate where NPV = 0	If IRR exceeds the hurdle rate, the investment is attractive.
ROI (Return on Investment)	(Total Benefits - Total Costs) / Total Costs	Percentage return on the total investment.
Payback Period	Years until cumulative cash flow turns positive	Shorter payback means faster capital recovery. Can be simple or discounted.
Profitability Index (PI)	(NPV + Initial Investment) / Initial Investment	PI > 1.0 means the investment creates value per dollar invested.
BCR (Benefit-Cost Ratio)	PV(Benefits) / PV(Costs)	BCR > 1.0 means present-value benefits exceed present-value costs.

Computed metrics are persisted on the scenario record with a computedAt timestamp. The UI can detect stale metrics and prompt for recomputation when cost or benefit data changes.

Scenario Comparison

The compareScenarios procedure runs the financial engine on multiple scenarios and returns the metrics side by side. This enables structured what-if analysis:

• "What if implementation costs are 30% higher than estimated?"
• "What if benefits are delayed by one year?"
• "What if the discount rate increases to 12%?"

Only one scenario per business case can be marked as baseline -- this is the primary scenario used for the go/no-go decision. Other scenarios document sensitivity and risk.

Approval Workflow

The approval workflow supports sequential multi-level approvals:

1. Submit for Approval: Moves the business case from Draft to Under Review and creates the approval chain.
2. Record Decision: Each approver records their decision: approved, rejected, or changes_requested, with a rationale.
3. Status Resolution: When all approvers have approved, the business case status moves to Approved. If any approver rejects, the status moves to Rejected.

Each approval record includes the approver identity, decision, rationale, decision timestamp, and sort order (for sequential processing).

Cross-Module Linking

Business cases can be linked to:

• PPM Project (linkedProjectId): The project that will deliver the investment. Enables traceability from financial justification to execution.
• BSC Initiative (linkedInitiativeId): The BSC initiative this business case justifies. Links strategic intent to financial analysis.
• Strategy Analysis (linkedAnalysisId): The strategic analysis that identified the opportunity. Provides analytical context for the investment.

These links are bidirectional -- the PPM, BSC, and Strategy modules can filter business cases by their linked entities.

Business Case Duplication

The duplicate procedure creates a deep clone of a business case including all financial scenarios, cost items, and benefits. The clone:

• Gets a "(Copy)" suffix on the title.
• Starts in Draft status.
• Preserves all cross-module links.
• Does NOT copy approvals (those are specific to the original submission).
• Resets computed metrics (they should be recomputed from the cloned data).

Configuration

Setting	Type	Default	Description
Type	Enum	initiative_justification	The investment type (7 options).
Currency	String	EUR	Currency for all monetary values in the scenario.
Discount Rate	Decimal	10% (0.10)	The rate used for NPV and discounted payback.
Time Horizon	Integer	5 years	The number of years to model.
Is Baseline	Boolean	false	Whether this is the primary scenario for decision-making.

Permissions

• Workspace Admins and Finance Leads can create, edit, and delete business cases and scenarios.
• Approvers can review submitted business cases and record decisions.
• Project Managers can view business cases linked to their projects.
• Team Members with workspace read access can view business cases and their financial summaries.
• All business case data is scoped to the organization via organizationId.

Tips & Best Practices

Always model at least three scenarios

A single financial scenario provides a point estimate that creates false confidence. Model at least Baseline, Optimistic, and Pessimistic scenarios to show decision-makers the range of possible outcomes.

Use probability weighting for uncertain benefits

If a benefit has only a 60% chance of materializing, set its probability to 0.6. This produces more realistic NPV calculations than assuming all benefits are certain.

Recompute financials after every change

The financial engine does not auto-recompute when cost or benefit data changes. After modifying any line item, click Compute Financials to refresh the metrics. The computedAt timestamp shows when metrics were last calculated.

Link every approved business case to a PPM project

An approved business case without a linked project is a decision without execution. Linking ensures the financial commitments flow into project budgets and can be tracked through delivery.

Use duplication for sensitivity analysis

Duplicate a business case, modify one assumption in the clone, and compare the financial metrics. This is faster than creating scenarios from scratch and preserves the full business case context.

Troubleshooting

Issue	Cause	Solution
NPV is NaN or undefined	No cost items or benefits entered, resulting in empty cash flows.	Add at least one cost item and one benefit before computing financials.
IRR shows as undefined	The cash flow stream does not cross zero (all positive or all negative).	IRR requires at least one sign change in the cash flow stream. Ensure there is an initial investment (negative cash flow) followed by positive returns.
Payback period is null	Cumulative cash flows never turn positive within the time horizon.	Extend the time horizon or review whether the investment is viable.
"Scenario not found" when computing	The scenario belongs to a different organization.	Verify you are working in the correct organizational context.
Approval chain not progressing	Previous approver has not recorded their decision.	Approvals are sequential. Each approver must record a decision before the next can act.

Related Features

• Portfolio Management -- Evaluate and prioritize business cases across the project portfolio.
• Balanced Scorecard -- Link business cases to BSC initiatives for strategic investment alignment.
• Strategy Analysis -- Reference strategic analyses that identified the investment opportunity.
• Programs -- Group related business cases under a program for coordinated investment management.
• Monte Carlo Simulations -- Use probabilistic analysis to stress-test business case assumptions.