Combines market impact, spread crossing, and price drift between decision and execution.
Why it decides whether a strategy is real. Backtests routinely assume execution at the mid or the close. A high-turnover strategy that looks excellent gross frequently turns negative once realistic slippage is applied - and this is the first thing an experienced researcher checks.
Implementation shortfall is the formal measure: the gap between the paper portfolio's return and the real one, including the cost of trades you wanted but could not complete.