Does the target price fit the transition?
A target environment can fit while coexistence breaks the budget.
The question
Larkspur has a $16,000 operating cap for each 30-day planning period. Its old environment remains contracted for 3 periods. All prices and contracts are invented.
| USD per planning period | |
|---|---|
| Full replacement target | 11000 |
| Retained environment | 9000 |
| Operating cap | 16000 |
The target and retained environment run together in this model. No one-time migration work amount is supplied.
“Show the actual transition cost and decide what can be committed.”
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A strong answer, step by step
Open each step in turn. This is one strong answer, not the only one.
Step 1: Which budget comparison includes the retained contract?
What would you do here? Open the move you’d make.
Compare only the target price with the cap
Tempting, but it misses something. This omits the retained environment.
Add three periods to the monthly price
Tempting, but it misses something. That mixes a duration with a recurring cost.
Add target and retained cost for the same period
The strong move. This includes both recurring obligations.
See how a strong candidate says it
“I would compare $11,000 + $9,000 = $20,000 with the $16,000 period cap. The target price alone is incomplete.”
Why it works: Both recurring amounts apply during coexistence.
Step 2: What gap and overlap total should Finance see?
What would you do here? Open the move you’d make.
Show $4,000 per-period gap and $60,000 overlap spend
The strong move. These follow from the displayed recurring obligations.
Call the difference between target and cap a saving
Tempting, but it misses something. A spending cap is not a prior cost, and the target omits retained spend.
Remove old cost as soon as data is copied
Tempting, but it misses something. Copy progress does not end the contract.
See how a strong candidate says it
“The gap is $4,000 per period. Across 3 full overlap periods, operating spend is $60,000 before any separately funded one-time migration work.”
Why it works: The same period and scope must be used for the comparison.
Step 3: A separate one-time migration fund exists. Does it close the operating gap?
What would you do here? Open the move you’d make.
Add the one-time package to every operating period
Tempting, but it misses something. That repeats a one-time item.
Check each funding scope separately
The strong move. This preserves both the recurring gap and the unknown one-time amount.
Declare the cap met because migration has funding
Tempting, but it misses something. The packet supplies no transfer of funding or changed cap.
See how a strong candidate says it
“Not without a specific Finance decision. I would keep one-time spend and recurring overlap separate, show that the one-time amount is unknown, and leave the operating gap open.”
Why it works: A separate fund does not silently change a recurring cap.
Step 4: A new written brief permits $21,000 and 90 days for replacement. What changes?
What would you do here? Open the move you’d make.
Keep saying no full migration can ever fit
Tempting, but it misses something. This ignores the new written brief.
Announce the migration completed
Tempting, but it misses something. Time and budget allowances are not an implemented result.
Reconsider within the new limits and retain acceptance checks
The strong move. The numeric conflict changed; the unproved behavior did not.
See how a strong candidate says it
“Reconsider the full plan: $20,000 fits the new cap and 65 modeled copy/validation days fit 90. Behavioral evidence, the rest of delivery and operating acceptance remain open.”
Why it works: Explicitly changed customer constraints can support a different plan.
The answer, in short
- Decision
- The first transition budget blocks the full target; the changed brief permits reconsideration.
- Because
- $20,000 exceeds $16,000, but fits $21,000. The modeled 65 days fit the second brief’s 90 days.
- What would change it
- A different retained contract, operating cap or supported delivery/evidence plan changes the recommendation.
Common traps
- Comparing steady state with a transition cap.
- Removing a retained contract by assumption.
- Inventing a one-time project total.
Check your answer
- Did I include retained spend?
- Did I use one period and scope?
- Did I keep one-time funding separate?
- Did I distinguish a changed plan from a completed migration?
Last reviewed Nov 10, 2026