Capital Project Value Bridge

See how much of an approved investment case remained after execution, and how project cost, go-live timing, and realized benefits changed cumulative value.

About this diagnostic

Compare an approved capital project case with actual project performance across investment cost, go-live timing, and annual cash benefit. The bridge separates the change in cumulative project value into capital cost, timing, and benefit realization effects. The evaluation horizon is applied consistently to both cases. For more information, visit our Corporate Finance & Strategy practice.

Capital allocation

Value realization path

Follow approved cumulative value through cost execution, go-live timing, and realized benefits.

Project value movement

Positive values increase cumulative value. Negative values reduce it.

Selected mechanism

Forward value-recovery economics

Recovery cost begins at the entered start month, while benefit recovery ramps separately across the remaining benefit-producing period.

Remaining active period 48 months From actual go-live to evaluation-horizon end

End annual benefit $3.88M $3.40M no-action annual benefit

Gross incremental benefit $1.74M Cumulative incremental benefit before recovery costs

Net project-value recovery +$680K Payback in M26

Recovery value path

Snapshots show cumulative incremental benefit, sustaining cost, and net recovery across the remaining active period.

Month Annual benefit Incremental benefit Sustaining cost Recovery cost Cumulative net recovery

Operating thresholds

Minimum benefit-gap recovery 48.7% Required for non-negative value recovery over the remaining active period

Latest recovery start M25 Latest start preserving non-negative recovery value with the entered ramp and costs

Maximum one-time recovery cost $1.28M Largest one-time commitment preserving non-negative recovery value

What changed

CAPITAL PROJECT VALUE BRIDGE: ILLUSTRATIVE DEFAULT RECORD APPROVED CASE AND ACTUAL OUTCOME Evaluation horizon: 5 years Approved project cost: $10,000,000 Expected annual benefit: $4,000,000 Planned go-live: 6 months Actual project cost: $11,500,000 Realized annual benefit: $3,400,000 Actual go-live: 12 months Approved active benefit period: 4.5 years Actual active benefit period: 4 years Approved cumulative project value: $8,000,000 Actual cumulative project value: $2,100,000 Approved value retained: 26.3% OBSERVED VALUE BRIDGE Capital cost: −$1,500,000 Go-live timing: −$2,000,000 Benefit realization: −$2,400,000 Value movement: −$5,900,000 FORWARD VALUE-RECOVERY ASSUMPTIONS Benefit-gap recovery: 80.0% Recovery starts: M3 after actual go-live Recovery ramp: 6 months One-time recovery cost: $600,000 Annual sustaining cost: $120,000 Remaining active period: 48 months FORWARD VALUE-RECOVERY RESULT No-action annual benefit: $3,400,000 End managed annual benefit: $3,880,000 Gross incremental benefit: $1,740,000 Cumulative sustaining cost: $460,000 One-time recovery cost: $600,000 Net project-value recovery: +$680,000 Managed cumulative project value: $2,780,000 Managed approved-value retention: 34.8% Payback month: M26 OPERATING THRESHOLDS Minimum benefit-gap recovery for non-negative value recovery: 48.7% Latest recovery start preserving non-negative value recovery: M25 Maximum one-time recovery cost preserving non-negative value recovery: $1,280,000 METHOD STATUS Management-entered assumptions. The observed bridge retains the existing undiscounted cumulative-value method. The forward recovery case begins at actual go-live and runs through the remaining active benefit period inside the selected evaluation horizon. The no-action case holds the realized annual benefit constant. The managed case recovers the entered share of the gap between realized and approved annual benefit, beginning in the entered recovery-start month and ramping linearly across the entered recovery-ramp period. The one-time recovery cost is charged when recovery begins. Annual sustaining cost is charged monthly from the recovery-start month through the remaining active period. Net project-value recovery equals cumulative incremental benefit less cumulative sustaining cost and the one-time recovery cost. No external capital-project, benefit-recovery, sustaining-cost, or implementation-cost benchmark is used.

Capital Project
Value Bridge

Capital Project Value Bridge

Quantify how much of the approved investment case survived actual project execution, and whether value deteriorated through capital cost overrun, schedule delay, or benefit shortfall.

Capital Project Value Bridge

Outcomes Defined by Impact

Capital Project Value Bridge

Capital Project Value Bridge

Quantify how much of the approved investment case survived actual project execution, and whether value deteriorated through capital cost overrun, schedule delay, or benefit shortfall.

Outcomes Defined by Impact

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Capital Project
Value Bridge