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Choice · Choose, Plan

Cost-benefit with second-order effects

The financial case, plus the consequences that normally get left out because they are somebody else's line. Those are usually where the case actually breaks.

The printable canvas and the handoff into Claude Code are part of a paid plan. See what a plan includes. It needs the Claude desktop app on this machine, and your team and the prompt library already installed in that project — we cannot see your disk, so open it there.

Stage
03 Choose, 04 Plan
Works at
All levels
Maturity
Scaling → Large organisation
Time
A day, more if the model needs building

What it is

A financial case extended to include the consequences that fall outside the sponsoring function's own numbers. Standard cost-benefit analysis reliably understates cost, because the costs it misses land on people who were not in the room.

Direct costs
What the decision visibly consumes — capital, licences, people, implementation. The part every business case contains.
Direct benefits
The revenue, saving or risk reduction claimed, with its timing. Benefits arriving in year three are worth materially less than the business case usually implies.
Second-order costs
What changes elsewhere: other teams' workload, support volume, complexity, training, management attention, cannibalised revenue.
Second-order benefits
Advantages that accrue outside the sponsoring function — capability built, optionality created, a constraint removed for someone else.
The counterfactual
What happens if you do nothing. Omitting it biases every case toward action, since the alternative appears costless.
Load-bearing assumptions
The two or three numbers the case actually depends on, sensitivity-tested and carried into monitoring.
The mistake people makeAlmost every business case is optimistic in the same two ways: benefits arrive earlier than they do, and costs landing on other functions never appear at all. Ask those functions directly rather than estimating on their behalf.
What it’s forYou need the financial case, including the consequences people usually leave out.
What it’s not forThe benefits are genuinely unquantifiable. Forcing numbers onto them produces false confidence.

How you run it

  1. Build the direct case firstCosts, benefits, timing, payback. Straightforward, and the part everyone does.
  2. Ask what else changesWho else's cost, workload, risk or revenue moves as a result? Ask the functions themselves rather than estimating on their behalf.
  3. Size what you can and name what you cannotAn unquantified second-order effect that is named still changes decisions. One that is omitted does not.
  4. Include the cost of not doing itDoing nothing is an option with consequences, and leaving it out biases every case toward action.
  5. Name the two load-bearing assumptionsEvery case rests on two or three numbers. Identify them, sensitivity-test them, and put them in the monitoring plan.

The prompt

Two ways to run it

Run this tool in your own Claude

The short prompt starts your partner against the library on your disk. The long one carries everything with it and needs nothing installed.

🔒 Prompt locked

Everything above is free — what this tool is, what it is for, what it is not for, and how to run it as a workshop. Three tool prompts a month are free with an account; beyond three, and for the printable canvas, it is the paid part.

See plans — from £19 a month

Your playbook

It lands in the earliest stage this tool suits. Move it on the Playbook page.

You’ll need

  • The direct costs and benefits, quantified
  • People from the functions the decision touches indirectly
  • Willingness to include costs that fall outside the sponsor's budget

You’ll end up with

  • Direct case with payback and sensitivity
  • Second-order effects named and, where possible, sized
  • The two assumptions the case rests on

Runs well with

Acquisition screen and synergy thesisAI operating model optionsAI opportunity mapAI risk classification and governance