Arise Innovations | Budget Misalocation Model

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Institutional Cost of Inaction

Budget governed by your organization (EUR)

Loss severity if event happens (% of capital)

Probability of an irreversible misallocation event (%)

Baseline structural friction (% of capital)

Additional recovered value (% of capital)

Internal FTE tied up (count)

Institutional damage cost proxy (EUR)

Reduction of that friction (%)

Confidence factor for board safe case (%)

Average fully-loaded cost per FTE per year (EUR)

Months of delay or rework caused by decision friction

External corrective spend (consulting, audits) (EUR)

Opportunity cost per month of delay (EUR)

Current Preventive and Corrective Investments (EUR)

Organizational baseline friction (% of cost)

Expected loss exposure (EV)

Modeled Recoverable Value (Theoretical)

Net Institutional Benefit

Organizational Cost (Current Drag)

Recoverable Value (Conservative Case)

Break-Even Fee Ceiling

Budget Protection Multiple

Organizational Recoverable (Conservative)