Illustrative sample · synthetic company · not a client
All names and numbers below are made up. It shows three findings from an audit, as detailed as a real one.
Decision Opportunity Audit · sample deliverable
Northwind Digital: which projects are quietly losing money?
Northwind is a 64-engineer software consultancy with eleven active projects. The owner asked us whether they are as profitable as the P&L says, and if not, what they can still change.
Verdict
Reshape and keep going.
3 of the 6 projects we sampled are heading for a loss. 2 of them are for one client, Retail A, and all 3 are on the same contract type (Fixed price). You can still fix all of them this quarter.
Margin at risk
≈ €1.17m
Forecast cost over contract value in the bad case (p90), across the sampled projects. 68% of it is in two projects, for the same two reasons.
Root cause
Extra scope and slow reviews.
Scope grew and nobody raised a change order. With only two reviewers, rework sat in a queue for days.
Cost at completion, per project
We forecast each project's remaining cost as a range. p90 is the bad but realistic case. P(loss) is the chance the project costs more than the contract pays.
| Project | Client | Contract | Value | % done | Cost p50 | Cost p90 | P(loss) |
|---|---|---|---|---|---|---|---|
| P-01 | Retail A | Fixed price | €1.85m | 72% | €1.98m | €2.31m | 68% |
| P-02 | Bank B | Capped T&M | €2.60m | 40% | €2.35m | €2.72m | 22% |
| P-03 | Retail A | Fixed price | €0.90m | 55% | €1.03m | €1.24m | 74% |
| P-04 | Logistics C | Milestone | €3.10m | 30% | €2.55m | €2.98m | 9% |
| P-05 | Health D | Retainer | €1.20m | 60% | €1.05m | €1.22m | 14% |
| P-06 | Bank B | Fixed price | €1.40m | 85% | €1.44m | €1.63m | 55% |
| Sampled total | €11.05m | €10.40m | 3 of 6 at risk | ||||
Shaded rows have a 50% or higher chance of ending in a loss. We calibrate the forecast on the client's own past projects. How the forecast works.
Where the margin goes
Here's where the overrun went on P-01 and P-03, the two worst projects. Both are for Retail A.
- Unpriced scope growth ≈ 41%
Nine change requests delivered and only one change order raised.
- Review-queue rework ≈ 28%
Two senior reviewers approve every merge. Code waits a median 3.1 days for them, and a lot of merged code gets reworked.
- Staffing mix ≈ 19%
Two specialists did work a mid-level developer could have done for 60% of the project.
- Customer-created delay ≈ 12%
Retail A was slow to sign off, and the contract doesn't charge for it.
What to do, biggest win first
-
Renegotiate P-01 / P-03 scope now
The nine change requests are on paper. Raise one change order for all of them this week. That brings back more money than any engineering fix, and after delivery you can no longer do it.
-
Add a third reviewer, time-box review
Add a third reviewer and a 24-hour limit on reviews. That cuts rework on every project, and on these two most.
-
Re-mix P-01 staffing
Move one specialist to a project that needs them and back-fill with a mid-level.
-
Stop bidding this kind of contract
Fixed price for this client, with scope this unclear, has lost money twice. Put that risk in the price or don't bid.
The first three moves can start this week. About €1.17m is at risk at p90. We show you what you can save, help you get there, and our support costs 10% of that or less.
The same audit on your own portfolio
Find out which of your projects are heading for a loss and what you can still do. Talking to us costs nothing.