Calculate build buy partner npv

What it's for

Compares build, buy and partner over the full lifecycle under shared scenarios, and prices the switching and option value that spreadsheets usually leave out.

Makes build-versus-buy-versus-partner decisions financially comparable across the full lifecycle, including strategic capability, exit cost, downside, and the explicit status quo.

What you give it

Inputs split into evidence read from your connected systems, calibration your team owns, and numerical controls that affect precision but never the result's meaning.

{
  "options": [
    {
      "exit_and_switching_cost_scenarios": [
        10,
        10
      ],
      "id": "internal-build",
      "initial_investment": 100,
      "period_cash_flows_by_scenario": [
        [
          100,
          100
        ],
        [
          20,
          20
        ]
      ],
      "sourcing_mode": "build",
      "strategic_option_value_scenarios": [
        30,
        30
      ],
      "terminal_value_scenarios": [
        20,
        20
      ]
    },
    {
      "exit_and_switching_cost_scenarios": [
        30,
        30
      ],
      "id": "vendor-buy",
      "initial_investment": 20,
      "period_cash_flows_by_scenario": [
        [
          60,
          60
        ],
        [
          40,
          40

What you get back

This is the actual output of running the example above — computed by the same function the platform calls, not an illustration.

{
  "assumptions": [
    "Every build, buy, and partner option uses the same coherent scenario columns, period cadence, currency, tax and discount basis; cash flows are incremental to a common counterfactual and include implementation, migration, staffing, operations, financing, decommissioning, support, reliability, compliance, and opportunity costs that differ by option.",
    "Terminal value, separately declared strategic option value, and exit or switching cost are executable, non-duplicated and measured at the same horizon; capability value cannot be counted again inside cash flows, and contractual limits, lock-in, reversibility and dependency consequences must be represented in scenarios.",
    "Risk-adjusted NPV subtracts a governed multiple of downside CVaR and is not an accounting valuation, procurement quote, causal estimate, or guarantee; scenarios and probabilities require finance, architecture, security, legal, procurement and operating-owner review.",
    "Options are aggregate sourcing strategies, never employee comparisons; selection supports an accountable build/buy/partner decision and does not authorize contracting, layoffs, outsourcing, investment, or migration without due diligence and approval."
  ],
  "configuration": {
    "discount_rate_per_period": 0,
    "maximum_cvar_loss": null,
    "minimum_expected_npv": 0,
    "risk_aversion": 0.5,
    "scenario_alignment_preserved": true,
    "status_quo_option_id": "vendor-buy",
    "tail_probability": 0.1
  },
  "decision": "retain_status_quo_sourcing_option",
  "method": "coherent_scenario_build_buy_partner_lifecycle_npv_v1",
  "option_diagnostics": [
    {
      "cvar_loss": -35,
      "downside_cvar_loss": 0,
      "eligible": true,
      "expected_npv": 55,
      "initial_investment": 20,
      "npv_standard_deviation": 20,
      "option_id": "vendor-buy",
      "passes_cvar_gate": true,
      "passes_expected_npv_gate": true,
      "probability_positive_npv": 1,
      "risk_adjusted_npv": 55,
      "selected": true,
      "sourcing_mode": "buy",
      "value_at_risk_loss": -35
    },
    {
      "cvar_loss": -40,
      "downside_cvar_loss": 0,
      "eligible": true,
      "expected_npv": 53,
      "initial_investment": 10,
      "npv_standard_deviation": 13,
      "option_id": "strategic-partner",
      "passes_cvar_gate": true,

How it works

Decision analysis — Turn uncertainty, cost and risk appetite into a defensible choice, with the reasoning left inspectable.

1. 1 Freeze at least two sourcing modes on one incremental counterfactual, currency, horizon and discount basis, with initial investment, period cash flows, terminal value, non-duplicated strategic option value, and executable exit or switching cost in every common scenario.
2. 2 Discount each option's scenario lifecycle value, calculate expected NPV, probability of positive NPV, VaR and CVaR loss, then subtract a governed multiple of downside CVaR from expected value.
3. 3 Apply minimum expected-value and maximum-tail-loss gates, select the highest eligible risk-adjusted option, and expose its scenario path plus advantage over the runner-up and declared status quo.

Before you trust it

Every tool in the catalog ships with the conditions under which its answer is meaningful — and the conditions under which it should abstain instead of guessing.

Calibrating it to your org

Calibration workflow

1. 1 Define the management decision, target outcome, aggregate unit, privacy boundary, cadence, and prediction/intervention horizon for this organization.
2. 2 Build a tenant-scoped historical cohort using only information available before each prediction or decision; preserve zero periods, censoring, assignment probabilities, and unresolved outcomes when the method requires them.
3. 3 Estimate statistical parameters on training history, but obtain costs, utilities, risk tolerance, practical-effect thresholds, capacity, and policy constraints from accountable decision owners.
4. 4 Validate on later time windows or held-out aggregate units at the deployment grain, against a simple baseline and the function-specific validation strategy.
5. 5 Deploy only if the returned decision clears evidence, overlap, calibration, robustness, and guardrail checks; warning, unsupported, schema-gap, and fallback decisions are abstentions.
6. 6 Monitor realized outcomes, data drift, coverage, and decision regret; recalibrate at a governed cadence or after a detected regime/definition change, never merely because a stakeholder dislikes the result.

Call it from your AI

You don't wire up 388 tools in your MCP client. The GitRevio MCP server exposes 18 tools, three of which let an agent search the catalog, read a tool's schema, and run it — so the assistant finds this one on its own.

gitrevio_capabilities_search
  { "q": "compare build buy and partner lifecycle" }
  → finds "calculate_build_buy_partner_npv"

gitrevio_capability_describe
  { "capability_id": "calculate_build_buy_partner_npv" }
  → returns the input schema and agent guidance shown on this page

gitrevio_capability_run
  { "capability_id": "calculate_build_buy_partner_npv", "arguments": { ... } }
  → returns the result shown above

Works in Claude Desktop, Claude Code, Cursor, Cline, Continue.dev, Goose and Aider. See the MCP server.

Related tools

See every tool in Vendors, sourcing & build-vs-buy →