Sensitivity Analysis

A sensitivity analysis shows what the ROI looks like if projected benefits materialize at 50%, 75%, and 100% of the estimate. Executives who see a sensitivity analysis trust the business case more than executives who see a single projection. The single projection invites the question: what if you are wrong? The sensitivity analysis answers that question before it is asked.

The 50% case is not a failure scenario. It is the conservative scenario — what the initiative delivers if everything takes longer, costs more, and performs below expectation. If the 50% case still produces positive ROI, the initiative is robust. If the 50% case produces negative ROI, the risk profile of the initiative is fundamentally different and should be reflected in how you present the ask.

For most AI business cases, the sensitivity analysis should show three rows: the projected benefit at 50% realization (conservative), 75% realization (base case), and 100% realization (optimistic). Each row should include: total benefit, net benefit after costs, payback period, and 3-year NPV. The base case is the number you lead with. The sensitivity analysis is the evidence that supports it.

# Sensitivity Analysis — [Initiative Name]

## Assumptions
- Total investment (fixed regardless of benefit realization): $[Amount]
- Benefit realization scenarios based on: [pilot data / industry benchmarks / conservative modeling]

## Scenario Results

| Scenario | Benefit Realization | Annual Benefit | Net Annual Benefit | Payback Period | 3-Year NPV |
|----------|--------------------|-----------------|--------------------|----------------|------------|
| Conservative | 50% | $[Amount] | $[Amount] | Month [X] | $[Amount] |
| **Base Case** | **75%** | **$[Amount]** | **$[Amount]** | **Month [X]** | **$[Amount]** |
| Optimistic | 100% | $[Amount] | $[Amount] | Month [X] | $[Amount] |

## Key Observation
Even at 50% benefit realization, the initiative produces positive net value within [X] months.
The initiative becomes financially unattractive only if benefit realization falls below [X]% —
a scenario we consider [unlikely / possible but mitigatable because...].

## What Would Change the Scenario
- Factors that would push toward conservative: [list 2–3]
- Factors that would push toward optimistic: [list 2–3]
- Early indicators we will monitor: [list 2–3 KPIs to track in first 90 days]