How we calculate savings.

The savings numbers on this site sit at the centre of how a buyer side advisory firm earns its credibility. A round percentage with no construction underneath it is exactly what we tell our clients to push back on when it appears in a Broadcom quote. We hold ourselves to the same standard. Every saving number that appears in an outcomes panel, a case study, a field note or a homepage figure is calculated against a documented baseline, verified against the actual signed contract, and dated to the close of the engagement. This page documents how that calculation runs.

The honest version is that there are three places savings calculations on advisory websites typically go wrong, and we have designed the methodology to avoid each of the three. First, comparing against an inflated opening quote rather than against a defensible baseline. Second, counting items that were never going to be in the deal as savings. Third, claiming savings that fall outside the negotiated term. The rules below address each.

The baseline is the prior contract, not the opening quote

The baseline for every savings calculation we publish is the buyer's prior contract on the same product, normalised for any change in scope or entitlement that occurred between the prior contract and the new one. The opening quote from the seller is not the baseline. The opening quote is a position. Comparing a closed deal to an opening quote produces a savings number that can be made to look large by anchoring the opening quote high. That is the trick we tell our clients to avoid. We do not use it ourselves.

Normalising for scope change is the part of the calculation that requires judgement. If the buyer added a product line to the contract, the value of the addition is removed from the new total before the comparison. If the buyer reduced entitlement on a product line, the reduction in the prior contract is modelled forward to the new term before the comparison. The normalisation is documented in an internal calculation sheet for every engagement. The sheet is signed by both the Desk lead and the buyer side procurement lead before any saving figure is published.

The calculation is annual, normalised to a multi year term

Savings are calculated as the annualised difference between the normalised prior baseline and the closed deal, expressed as a percentage of the normalised prior baseline. Multi year deals are normalised to a single annual figure using a present value calculation against a documented discount rate. The discount rate we use is the buyer's stated weighted average cost of capital where the buyer has shared it, or a published industry rate where the buyer has not.

"The savings number must be the number the buyer's CFO can defend in a board memo. If the construction does not survive a CFO's first question, the number does not get published."Finance Lead, The Desk

The annualised figure is the figure that appears in our outcomes panels. Where a multi year present value calculation produces a meaningfully different cumulative figure, both numbers are disclosed in the case study text. We do not lead with the cumulative figure in summary panels. The annualised figure is the comparable one across cases of different term lengths.

What we count as savings

We count three categories of saving. Headline price reduction on the contracted scope, verified against the signed agreement. Avoided uplift on the contracted scope where the prior contract contained an indexation clause that would have applied. And avoided exposure on audit defenses where the asserted exposure was reduced through a defensible scope or basis reframing and the reduction is documented in the final settlement.

We do not count items that were never in the deal. If the seller proposed an expansion the buyer was not going to sign in any case, the value of the expansion is not counted as a saving when the expansion is removed from the closed deal. We do not count items outside the negotiated term. A multi year deal produces savings over its term and we count those. We do not project savings into a future term that has not yet been negotiated.

Verification against signed contracts

Every saving figure we publish is verified against the executed agreement. The verification is a documentary step. The Desk lead reviews the executed contract, reconciles the contracted total against the closing memo from the engagement, and certifies the saving calculation. The certification is held in the engagement file. The figure is then published with the descriptor "Verified against signed contracts" where the figure appears on the site. We do not publish unverified figures.

Where a saving figure cannot be verified because the buyer has not yet executed, or because the buyer has not consented to the Desk seeing the executed document, the figure does not appear on the site. We have engagements where the saving was large and the buyer has declined to share the executed document. Those engagements are not in our outcomes panels. The published numbers are the verified subset, not the total.

The aggregated $340M+ figure

The aggregated $340M+ figure that appears in our Numbers panel is the sum of verified saving figures across all closed engagements where the buyer has consented to the figure being included in an aggregate. The figure is anonymised at the aggregate level. The individual engagement contribution is not disclosed. The figure is refreshed quarterly. The current figure is current as of the most recent quarterly close, which is shown on the methodology footer when the figure is published.

Audit defense savings

Audit defense savings are calculated as the difference between the auditor's initial asserted exposure and the final settled exposure, where the reduction is documented in the formal audit settlement. We do not count audit savings against an exposure that was never seriously asserted. The asserted exposure in our calculation is the figure on the auditor's first written exposure model, not informal verbal assertions. The settled exposure is the figure in the final audit settlement letter, not interim positions.

What we do not claim

We do not claim that our calculation method is the only defensible one. Other buyer side advisory firms use different baselines, different normalisation rules, and different categories of saving. The method documented here is the method we use. It is conservative on three dimensions. It uses the prior contract rather than the opening quote. It counts annualised rather than cumulative. It excludes items that were never going to be in the deal. Each of those choices produces a lower published saving figure than alternative methods would produce. That is the choice we have made.

How to read a published saving figure on this site

Every percentage saving on this site is the annualised reduction against the normalised prior baseline, verified against the executed contract, and dated to the engagement close. Every dollar saving is the annualised dollar value of the same reduction, on the same basis. Where a cumulative figure is shown, it is labelled as cumulative. Where the figure is an audit defense saving, it is labelled as the reduction from asserted exposure to settled exposure. Read the labels. The construction is in the labels.