Ask a chief executive what their transformation programme costs and you will get a number that adds up the invoices. Ask the programme director what it costs and you will get a longer, unhappier answer that includes the six weeks spent reconciling two suppliers' definitions of the word done.
We call the gap the handoff tax. It is the cost of coordination between vendors who are individually competent and collectively unaligned, and in the engagements we have audited it consistently runs between fifteen and thirty percent of programme cost.
Where it accumulates
The tax is not paid in one place. It accrues in small, unbillable increments that nobody logs against the programme:
- Re-discovery. Each new supplier repeats the context-gathering the last one already did, at your team's expense rather than their own.
- Definition drift. The strategy firm's conversion metric, the agency's conversion metric and the data warehouse's conversion metric are three different numbers, and nobody notices until the board asks why they disagree.
- Defensive scoping. Every supplier writes their statement of work to exclude the seam. The seam is then owned by you.
- Escalation latency. A cross-vendor problem waits for a steering committee, because no single supplier has the authority to resolve it.
Why it is invisible
None of these costs are billed to the programme. They are absorbed by your own people, which makes them feel free. They are not free — they are simply paid in the currency of your best employees' attention, which is the scarcest resource in the building.
The tax is paid in your team's attention, which is why nobody puts it in the budget and everybody feels it in the schedule.
What actually reduces it
Consolidation helps, but only if accountability consolidates with it. A single supplier with four internal silos reproduces the same tax behind a single invoice. What matters is whether one named person is accountable for the outcome across every discipline the outcome requires.
- Agree metric definitions in writing, with finance in the room, before any work starts.
- Name one accountable owner per outcome — not per workstream.
- Make the seams explicit in scope, and assign each one to a supplier by name.
- Give the accountable owner authority to resolve cross-discipline conflict without a steering committee.
The test
If something goes wrong in the seam between two disciplines on your programme, how many calls does it take to reach someone who can fix it? If the answer is more than one, you are paying the tax.
M. Kapoor
Partner, Business Consulting & Strategy
