At Summit General Construction, the annual budget meeting was usually a predictable ritual. Department heads would take last year’s spreadsheet, add 5% for inflation, and defend their use of funds. This tradition protected Project Anchor for three years.

Project Anchor (aka SiteSync) is a custom-built schedule and resource planning system intended to revolutionize how Summit would scale their backlog with project management and financials.

It started with a bold vision and a $2 million initial investment. But four years later, the system is loathed from being riddled with data import and reporting bugs. Field superintendents, frustrated by the problems, had secretly reverted to using Excel to run their jobs. The revolutionary system is where projects go to die.

Declining financial performance mirrored the productivity losses. Enter Elena, the new CFO, who introduced a shift in accountability.

The Zero Mandate

To keep Anchor alive, Summit was paying software firm CodeConstruct, a monthly retainer of $45,000. This expense was listed in the budget as Essential Maintenance & Optimization. In reality, it was life support.

During her first 30 days, the Anchor Project became a focal point. She learned that the project was behind schedule in year one and was reassigned to the IT Director during year two. Apparently, the meetings and communication with the developers overwhelmed the prior CFO.

The IT Director now invested in SiteSync’s success, presented the annual renewal for the CodeConstruct retainer. “We can’t abandon SiteSync now; it’s the backbone of our future operations.” The IT Director started to worry when the retainer was not immediately approved.

Elana needed to change how capital was allocated and wanted to slowly implement Zero-Based Budgeting (ZBB). She believed that focusing on IT, HR, and Marketing were great places to start. Elena knew she needed an objective third party to review IT spend. She brought in Certitude to conduct a Capital Integrity review, providing the unbiased data she needed to challenge the vendor.

During the IT capital integrity review, the team learned that the developers were not focused on completing sequential modules. After four years, the work efforts continued to focus on data source integrations and reporting. CodeConstruct had weaponized the sunk costs, using the fear of wasted investment to keep the invoices paid.

The Hard Pivot

The data from the Certitude review of Anchor was alarming. CodeConstruct admitted that finishing the application would take another two years and $2 million. This clarity is what the team needed to make next step decisions.

Elena put it plainly: The question isn’t How much have we spent? The money consumed by Anchor is gone. The better question is Should the next $2 million be spent here, or on something that actually works?

Under the old method, Project Anchor would have been funded automatically to protect the investment. Under ZBB, it was defenseless. The project was terminated.

The Fix with simple numbers:

  • Cost to keep Anchor: $540k/year (retainer) or $2M (completion)
  • Value of Anchor: <$0 (hated by users)
  • Cost to Switch: $670k total
  • Decision: Cut the chain

Elena’s budgeting process required IT, HR, and Marketing departments to start at zero. If you want $1, you must justify why, how, and when that $1 creates value. As the departments submitted their revised expenses, the combined reduction exceeded $700,000.

The Outcome

With the $700k reduction and the cancellation of Project Anchor, the team had the capital to deploy for growth. The executive management team approved funding to fast track the implementation of a commercial construction management software with new tablets, migrate to a new HR platform, and fund an AI pilot. These initiatives are dubbed Set Sail.

Elana’s accomplishments in her first 90 days validate her approach using ZBB as the wind to generate movement, speed, and forward momentum. No longer anchored in place, this business will continue to benefit from the financial leadership she offers.

The IT Director went from stressed to feeling under control. Initially worried about their employment with the company, they were able to recover overhead with Certitude providing support during the vendor review process. Once they detached from the emotional ties of Anchor, they could objectively support the termination of the project. They feel good knowing they have the support of their new manager, Elana.

While change is never easy, the field team was relieved to finally ditch the buggy legacy system. The frustration of SiteSync is replaced by the speed of modern software.

Key Takeaways

  • ZBB ignores the past:

    It strips away the emotional attachment to past expenditures (sunk costs) and focuses on the future value of today’s dollars.

  • Capital Integrity:

    It protects the company’s financial health by ensuring resources flow to the highest-return activities, not the most visible legacy projects.

  • Active Choice:

    Every dollar is an active investment decision, not a passive continuation of habit.

Be like Elena

You don’t need to be a new CFO to stop the flow of capital into sunk costs. From maintenance to momentum, partner with Certitude to implement the transparency you need to pivot from paying out vendor overhead to funding growth.

Contact us today.