Hidden Cost / Efficiency Gap
Composite / composite / 3 to 6 months
What it detects
Multiple distinct cost-efficiency problems are firing simultaneously, indicating that cost-per-output is deteriorating across several surfaces at once rather than as a single isolated issue. C10 is a multi-signal aggregation; it reads the firing state of four base signals and fires when at least [redacted] of them are active.
When it fires
At least [redacted] of these [redacted] base signals are currently firing on the snapshot: `software-stack-bloat` (S15), `budget-actuals-variance` (S35), `payroll-overhang` (S14), `headcount-cost-revenue` (S36). The firing logic counts the active set via `hasSignal()` lookups. Emit location: `lib/financial-engine/src/financialEngine.js:[redacted]`.
Why it matters
Count overlapping software costs only once. Multiple cost-efficiency problems can describe the same software spend. Flagged software waste is a subset of the software expense category, so summing waste and that category's overrun double counts their overlap.
What it looks like in practice
$[redacted]K monthly flagged waste and a $[redacted]K Software overrun yield $[redacted]K monthly drag, with $[redacted]K overlap removed and MEDIUM severity. $[redacted]K waste, $[redacted]K Software overrun, and $[redacted]K Rent overrun yield $[redacted]K and HIGH severity. $[redacted]K waste and only a $[redacted]K Rent overrun retain $[redacted]K with overlap unchecked. Exactly $[redacted]K stays MEDIUM.
Severity levels
- MEDIUM
- HIGH
Thresholds
Exact thresholds, formulas, and severity bands are omitted from this public view. The full methodology, with every figure, is available in the authenticated app.
How it connects
Hidden cost drag compounds with revenue growth — if delivery costs are rising faster than output, margin compression accelerates even without new hires or spend increases.
Why these together
Each of the four efficiency reads is a localized cost problem with its own owner. When at least two of them fire at the same time, the odds of an underlying structural cost problem rise sharply, and the identifiable drag (redundant software plus persistent budget overruns) becomes a single board-level number rather than four tactical fixes. The composite fires when at least two of the four checks below are active; the aggregation rule is practitioner-derived and the severity cutoff reuses the expense-overrun dollar line.
Built from these checks
- Software Stack Bloat: covers vendor sprawl. Its flagged redundant subscriptions supply the identifiable-waste part of the drag.
- Persistent Budget Overruns: covers spending discipline. Its latest-month overrun supplies the budget-variance part of the drag.
- Payroll Overhang: covers labor-intensity efficiency.
- Labor Cost Absorbing Revenue: covers the total labor scaling envelope.
Sources
- SPI Research / Deltek via Payroll Overhang, Labor Cost Absorbing Revenue
- ISA 320 (IAASB) via Persistent Budget Overruns
- Zylo via Software Stack Bloat
- SPI Research via Labor Cost Absorbing Revenue
SEE IT ON REAL NUMBERS
The exact thresholds, the formula, and your own figures are in the authenticated app. See it against a real, simulated dataset for Integra Executive Services, our public demo company, or connect your own QuickBooks Online account.