AI projects compete for resources with every other initiative in your organization. Without a compelling business case:
The operators who can translate AI capabilities into business outcomes lead the transformation.
Basic ROI formula:
ROI = (Value Generated - Total Cost) / Total Cost × 100
AI-specific considerations:
| Value Component | How to Measure |
|---|---|
| Time saved | Hours × hourly rate |
| Quality improvement | Error rate reduction × cost per error |
| Speed improvement | Faster cycle × value of time |
| Scale achieved | Volume increase × marginal value |
| Innovation | New capability value (harder to quantify) |
| Cost Component | What to Include |
|---|---|
| AI costs | API fees, subscriptions, compute |
| Development | Build time, integration work |
| Training | User education, change management |
| Maintenance | Ongoing monitoring, updates |
| Risk buffer | Unexpected issues (15-25% typical) |
Structure:
1. EXECUTIVE SUMMARY
└─> One-page overview: problem, solution, ROI, ask
2. CURRENT STATE ANALYSIS
├─> Process description
├─> Pain points and costs
├─> Performance metrics
└─> Competitive context
3. PROPOSED SOLUTION
├─> AI approach
├─> How it works
├─> Technical requirements
└─> Implementation plan
4. VALUE ANALYSIS
├─> Quantified benefits
├─> Qualitative benefits
├─> ROI calculation
└─> Payback period
5. RISKS AND MITIGATION
├─> Technical risks
├─> Operational risks
├─> Financial risks
└─> Mitigation strategies
6. RECOMMENDATION
├─> Investment request
├─> Timeline
├─> Success metrics
└─> Decision points
Don't just compare AI to doing nothing. Compare to alternatives:
| Alternative | Fair Comparison |
|---|---|
| Do nothing | Value of status quo problems |
| Hire more people | Full cost (salary, benefits, training, management) |
| Outsource | Vendor costs + coordination overhead |
| Different technology | Full implementation and maintenance cost |
| Process improvement | Realistic improvement potential |
AI creates value through multiple channels:
Cost reduction:
Revenue enhancement:
Risk mitigation:
Strategic positioning:
Value drivers are the specific mechanisms through which AI creates business value. Identify and quantify each:
Efficiency drivers:
Quality drivers:
Scale drivers:
AI BUSINESS CASE: [Initiative Name]
EXECUTIVE SUMMARY
Investment: $[X]
Annual Value: $[Y]
ROI: [Z]%
Payback: [N] months
THE OPPORTUNITY
- Current process: [Description]
- Problem: [Pain points]
- Impact: [Cost/scale of problem]
THE SOLUTION
- Approach: [AI implementation]
- How it works: [Brief description]
- Implementation: [Timeline]
VALUE ANALYSIS
| Benefit | Annual Value | Calculation |
|---------|-------------|-------------|
| [Benefit 1] | $[X] | [How calculated] |
| [Benefit 2] | $[Y] | [How calculated] |
| Total | $[Z] | |
| Cost | Investment | Ongoing/Year |
|------|------------|--------------|
| [Cost 1] | $[X] | $[Y] |
| [Cost 2] | $[X] | $[Y] |
| Total | $[X] | $[Y] |
RISK ASSESSMENT
| Risk | Probability | Impact | Mitigation |
|------|-------------|--------|------------|
| [Risk 1] | H/M/L | H/M/L | [Approach] |
RECOMMENDATION
[Clear ask with decision criteria]
| Mistake | Problem | Correction |
|---|---|---|
| Only counting savings | Misses revenue and strategic value | Include all value types |
| Ignoring hidden costs | Underestimates investment | Include training, maintenance |
| Over-promising | Destroys credibility | Be conservative, then exceed |
| No comparison baseline | Can't prove value | Measure before implementing |
| Vague benefits | Not actionable | Quantify everything possible |
You want to implement an AI assistant to help your customer service team handle initial customer inquiries.
Current state:
AI solution proposal:
Build the business case:
Calculate current costs:
Project future state:
Quantify benefits:
Calculate ROI:
Identify risks:
In Module 4.2: Organizational Change, you'll learn how to navigate the human side of AI adoption—getting buy-in, managing transitions, and building AI-ready culture.
You've reached the end of this module. Review the checklist below to ensure you've understood the key concepts.