Discovery ROI calculator

How much will your programme lose? Size the rework, runaway costs and lost benefits programmes like yours typically suffer, and see how little a Discovery must prevent to pay for itself.

Your programme

Programme budget

Benefits it is meant to deliver

From the business case: savings, revenue or value over the system’s life.

How programmes usually lose money

The defaults come from published research, listed below. Change them to match your own experience.

Effort spent on avoidable rework

Boehm and Basili put it at 40–50% on typical projects; later work found 10–20% in the most mature teams.

Chance the costs run away

Flyvbjerg and Budzier found one IT project in six was a “black swan”.

How far over budget a runaway goes

Those black swans overran their budgets by 200% on average.

Benefits that never arrive

McKinsey and Oxford found large IT projects delivered 56% less value than predicted.

The Discovery

Cost, as a share of the budget

A small team for four to eight weeks, the typical length in the GOV.UK Service Manual.

Share of those losses it prevents

Be sceptical here. The break-even figure opposite shows how little it needs to be.

Losses it must prevent to pay for itself: 1.5%
Net saving: £1,338,000

Programmes like this one typically lose £9,920,000. A Discovery costing £150,000 pays for itself if it prevents just 1.5% of that, and at 15% it saves £1,338,000.

Expected losses without a Discovery£9,920,000

With a Discovery£8,582,000

Expected losses without a Discovery: £9,920,000
Rework: £1,500,000
Runaway costs, allowing for how often they happen: £1,700,000
Benefits that never arrive: £6,720,000
Cost of the Discovery: £150,000
Losses it prevents: £1,488,000
Return on the Discovery: 892%

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01The method

How it works

The usual case for a Discovery counts the rework it avoids. That undersells it. Technology programmes lose money in three predictable ways, and the biggest is rarely the one on the budget line.

The model

Rework: effort spent redoing work that was wrong first time, as a share of the budget.
Runaway costs: a minority of IT programmes overrun catastrophically. The expected cost is how often that happens multiplied by how far over they go.
Benefits that never arrive: programmes are approved for their benefits, and on average deliver far less than they promised. On most programmes this is the largest loss of all, and it never appears on an invoice.
A Discovery is worth the share of those losses it prevents, less what it costs.

The three losses overlap a little, and nobody can know in advance exactly what share a Discovery will prevent. That is why the figure to look at is the break-even: on typical figures, a Discovery pays for itself if it prevents a very small part of what programmes like yours usually lose. The best outcome can be deciding not to build at all, which the GOV.UK Service Manual treats as a valid result.

Sources

Flyvbjerg, B. and Budzier, A. (2011). Why your IT project may be riskier than you think. Harvard Business Review. 1,471 IT projects: one in six a “black swan”, with an average cost overrun of 200%.
Bloch, M., Blumberg, S. and Laartz, J. (2012). Delivering large-scale IT projects on time, on budget, and on value. McKinsey & Company with the University of Oxford. Large IT projects ran 45% over budget and delivered 56% less value than predicted.
Boehm, B. and Basili, V. (2001). Software defect reduction top 10 list. IEEE Computer. Avoidable rework at 40–50% of effort; later work by Shull and others found it lower in mature organisations.
Flyvbjerg, B., Budzier, A. and others (2022). The empirical reality of IT project cost overruns: discovering a power-law distribution. Journal of Management Information Systems. Overruns have a fat tail that normal estimates miss.
GOV.UK Service Manual. How the discovery phase works.

From the article

01 Jun 2025 · 7 min read