Effective management of information technology (IT) investments is increasingly important for Danish municipalities. This is why they along with other both public and private sector organizations increasingly are using IT business cases. The business case is a document specifying the main rationale behind the expected value and cost of an IT investment for the adopting organization. However, experiences from Danish municipalities reveal difficulties in developing effective IT business cases for purposes beyond simple cost savings. Based on collaborative action research with Danish municipalities, we present insights on the challenges in contemporary IT business case practices. We applied these insights in conjunction with contemporary literature on business cases to develop a business case method for Danish municipalities. Based on the municipalities’ evaluation of the method we summarize its key contributions to IT business case practice in local government organizations.