A strong NGS business case is not a longer version of the vendor quote. It is a different document written for a different reader. The vendor quote answers "what does this instrument cost." The finance committee is asking something the quote never addresses: "what are we committing to for the next five years, how confident are you in the demand that justifies it, and what happens if you are wrong." A capital request that answers only the first question and treats the purchase as a one-time event is the one that comes back rejected, not because the number was too big, but because the document did not acknowledge that the number was the smallest of several the program will incur.

This article gives you a template that answers the questions finance actually asks, and a worked cost-recovery calculation you can adapt to your own figures. It builds on the cost model in the guide to building an NGS program and the real per-genome figures in the breakdown of what NGS actually costs. If you have not yet confirmed your lab is ready to own an instrument well, work through the readiness assessment first, because a business case written before readiness is confirmed will not survive the questions in its own risk section.

What Finance Actually Reviews

A finance reviewer reads a capital request looking for reasons it might go wrong, not reasons it might go right. That is their job, and understanding it changes how you write. The enthusiastic case for the science is necessary but not where the document is won or lost. It is won or lost in the sections that anticipate the reviewer’s own objections before they raise them.

Four things get scrutinized hardest. Demand credibility: is the projected volume real, or aspirational. Total cost of ownership: does the request acknowledge reagents, service, staff, storage, and repeat runs, or only the capital line. Alternatives: was outsourcing seriously evaluated, or dismissed. And downside: what happens to the institution’s money if the demand does not materialize. A request that addresses all four directly, including the uncomfortable ones, reads as trustworthy. A request that addresses only the capital cost and the scientific upside reads as a sales pitch, and reviewers discount sales pitches.

Modeling Demand Credibly

Demand is the section reviewers probe first, because everything else in the document depends on it. The discipline that makes it credible is separating what you have committed from what you hope for. Committed demand is funded, named projects with samples you can count. Pipeline demand is grants submitted but not awarded, which should be included only with a stated conversion rate rather than at face value. Aspirational demand is everyone who says they would use the instrument if it existed, and it belongs in a future-phase paragraph, not in the volume figure the business case rests on.

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The instinct to lead with the largest defensible number is exactly wrong here. A reviewer who sees a modest committed figure presented honestly, with pipeline and aspirational demand clearly labeled as upside, trusts the entire rest of the document more. A reviewer who sees a large figure that turns out to blend all three tiers stops trusting every other number on the page. Build the case on committed demand, and let the upside be upside.

Cost Recovery and Chargeback

If the instrument will recover its costs through per-sample charges, the chargeback rate is where most business cases quietly break, and it breaks in a way that is easy to miss until it is a budget problem. The full cost-recovery rate is your variable cost per sample plus your fixed cost divided by your projected volume. Using the standard figures of $910.50 variable cost per genome and $257,000 annual fixed cost, at a projected 600 genomes a year, the full-recovery rate is about $1,339 per genome.

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The trap is that this rate only recovers the fixed cost if 600 genomes actually materialize. The per-sample charge carries a fixed-cost component of about $428, and every genome that does not arrive is $428 of fixed cost that goes unrecovered. The shortfall is not hypothetical; it is arithmetic.

Table 1. What a full cost-recovery rate of $1,339 per genome, set at a projected 600 genomes per year, actually recovers when real volume differs. The shortfall at low volume equals the fixed cost carried by the genomes that never arrived. Based on $910.50 variable cost and $257,000 annual fixed cost.

Naming the subsidy explicitly, when there is one, is far stronger than hiding it in an optimistic rate. A committee that is asked to fund half the fixed cost as a deliberate investment in institutional capability can say yes to that. A committee that discovers it funded the same amount by accident, because the volume projection was inflated, remembers it at the next request.

Presenting Alternatives

Every capital request implicitly claims that buying is better than not buying. A strong one makes that claim explicit by evaluating the alternatives seriously and showing its work. The main alternative to owning is outsourcing, whether to an institutional core facility or a commercial provider, and the comparison turns on volume, turnaround, and control rather than on cost alone. Presenting this comparison honestly, including the conditions under which outsourcing would be the better choice, does not weaken the case for buying. It strengthens it, because it demonstrates that the recommendation survived a real test.

The failure mode here is the strawman alternative: an outsourcing option described just poorly enough to make the purchase look inevitable. Reviewers see this constantly and discount it immediately. If outsourcing genuinely loses on your numbers, show the numbers. If it wins on cost but loses on turnaround or control, say so, and make the case that turnaround or control is worth the premium. A business case that concedes what the alternative does well is far more persuasive than one that pretends the alternative has no merits.

Risk and Contingency

The risk section is where a business case either earns trust or loses it, because it is where the reviewer’s own worries live. Address them directly. The three that matter most: demand risk, what happens if committed volume falls; utilization risk, what happens if the instrument sits idle; and obsolescence risk, what happens if the platform is superseded during the amortization window. For each, state the risk plainly and pair it with a contingency that does not require another capital request to execute.

• Demand risk: if volume comes in below projection, name the outsourcing arrangement or shared-use plan that absorbs the gap, and state the volume floor below which the program would be reconsidered.
• Utilization risk: if internal demand is insufficient, name the plan to open the instrument to other groups or external users on a chargeback basis, turning idle capacity into partial cost recovery.
• Obsolescence risk: acknowledge that sequencing platforms turn over, and frame the amortization window and service contract accordingly rather than assuming the instrument is a permanent asset.

A risk section that names real risks and credible contingencies is disarming in the best sense: it removes the reviewer’s ability to raise an objection you have not already addressed. A business case with no risk section, or one that lists only risks it can wave away, invites exactly the scrutiny it was trying to avoid.

A Business Case Outline

The following structure maps each section of a capital request to the specific question it has to answer for a finance reviewer. Use it as a starting skeleton and adapt the emphasis to your institution’s process.

Table 2. A reusable NGS business case outline, mapping each section to the finance-reviewer question it must answer. The review milestone is the section most often omitted and the one that most reliably distinguishes a request that gets approved from one that gets deferred.

The review milestone deserves the emphasis. A capital request with a named review date and pre-agreed metrics converts an open-ended commitment into a bounded one, which is far easier for a committee to approve. The broader strategy this document serves, and the operational decisions that follow approval, are covered in the Manager’s Guide to Next-Generation Sequencing in the Lab. Once the case is approved, the platform selection decision, matching the instrument to the demand and turnaround the business case committed to, is the next step, covered in Choosing an NGS Platform: A Lab Manager’s Selection and Procurement Guide. To model your own cost-recovery rate and volume sensitivity directly, use Sequencing Coverage and Cost Calculator: How Much Data Do You Actually Need?

This article was produced under Lab Manager's AI Editorial Guidelines.