SIG Resource Center

Savings – Best Practices in Defining and Calculating

A summary of responses received for this Peer2Peer inquiry is available below.

Original Inquiry

In reviewing Procurement savings benchmarking material, it can be challenging at times to determine how organizations define savings. How does your organization define / classify savings from Sourcing / Procurement initiatives?

How do you define Cost Reduction vs Cost Avoidance?

Do you factor P&L and/or budget impact into definitions

Do you report savings out on an annualized, in-year or life of contract basis?

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