The Mythical Business Case -- Part 1: The Limits of Rational Decisions

by Borys Stokalski

Building a business case is a necessary prerequisite in supporting any major investment decision. Building the business model, calculating costs and quantifying benefits, analyzing cash flow over time, and calculating financial indicators, such as net present value, internal rate of return, return on investment (ROI), or whatever else is required for getting the management approval, are essential parts of "investment engineering." This is the kind of discipline that creates informed and responsible spending decisions, right?