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Where can I view achieved and potential savings in Sastrify?


Whenever Sastrify helps uncover savings potential or generate savings, they are posted to your app. There are separate dashboards for potential and achieved savings, located under the Optimization section.


To access the dashboards, go to Optimization > Savings.


On the page, you will see 2 tabs: one for Potential Savings and the other for Achieved Savings.



There are two types of savings listed and communicated in the app: Potential Savings and Achieved Savings.


What counts as achieved savings?

Any savings that were realized with the help of the Sastrify platform or the involvement of the Sastrify procurement specialists are considered a saving to its full amount. This can be as simple as a reference for a cheaper alternative solution or a price benchmark or as extensive as taking over an entire negotiation on your behalf, irrespective of how the work was divided among the Sastrify procurement team or your internal procurement team.

For the avoidance of doubt, supporting to avoid or decrease vendor-driven price increases (cost avoidance) is also considered savings.


Examples of use cases for which Sastrify captures savings (not an exhaustive list):


  • Sastrify-led or customer-lead negotiation with Sastrify's procurement support
  • Provision of benchmarks that lead to better conditions
  • Ideas to optimize contract specifications (e.g. downgrading plans, mixing different license types, forecasting volumes to avoid overages or improve commitment levels)
  • Spotting possibilities to upgrade monthly subscriptions to yearly subscriptions
  • Helping to avoid or decrease vendor-driven price increases ("cost avoidance")
  • Providing short-lists of tool alternatives that lead to better conditions
  • Tips to spot and reduce unused licenses
  • Savings generated from our SastriMarket and/or SastriCloud offerings
  • Connecting you to vendors thata re part of our Partner & Reseller Network to improve the pricing conditions

How does Sastrify calculate an achieved savings?


As part of each achieved savings post, Sastrify adds complete information about the savings posted, including the savings description and relevant information such as: contract duration, time saved, and the detailed calculation (which includes the cost baseline) broken down into points to make the results understandable and transparent. 


Recognizing that different companies may calculate savings differently, especially for multi-year contracts, Sastrify includes the calculation of monthly savings along with the savings amount for the entire contract duration. 

We also acknowledge that each company may have their own way of calculating savings and allocate them across fiscal quarters and years. In order to support the your internal savings reporting, Sastrify can detail savings records according to the your needs upon request.


All savings are calculated in the currency specified in the contract and when displayed in the app, they are converted to the currency specified in your license agreement with Sastrify at the time the savings were recorded.


Example

Sastrify has negotiated your contract and secured competitive pricing, resulting in a total annualized achieved savings of €8.3K (~ 15%).


- Contract Duration: 12 months
- Time Saved for the Customer: 3 hours
- Savings Description: Negotiated an increase discount to 15% with pre-committed growth
- Monthly Savings Calculation: €8.3K x (15%-5%) x current EUR:USD ex-rate of 0.83
- Full Contract Savings Result: €691.66 x 12 months = €8.3K

How does Sastrify calculate the baseline?


The calculation of the baseline depends on the individual situation. These are typical baselines:

  • The current price and total cost of an existing subscription contract
  • The list price of a new tool or solution
  • The latest quote that you received from a vendor before you involved Sastrify in the negotiation
  • The price increase that a vendor approached you with for your next renewal ("Cost avoidance")


Example 1: Contract renewal
Consider you have a Salesforce contract that renews in 2 months and your current cost per one Sales Cloud - Enterprise Edition license is 88.80. You request Sastrify to renegotiate the prices for the next renewal period and Sastrify manages to negotiate a new license price of 75.50. In our savings calculation, we take 88.80 as the baseline price and savings would be calculated like (88.80 - 75.50) x the number of licenses.


Example 2: New tool introduction
Let's say you would like to introduce Segment as a new solution and your team has already received the first proposal from Segment with a 30% discount on the list price. You request Sastrify to join the ongoing negotiation and Sastrify manages to negotiate an increase of the discount to 65%. In our savings calculation, we would take the difference between your first quote of 30% (the baseline) and the final quote of 65% x the volume


Example 3: A Sastrify benchmark was used in the negotiation
Imagine you approached Sastrify to benchmark a quote you received for a total contract value of 110k. Our benchmark suggests a contract value of 80k, which you achieve in negotiation with the vendor. The savings would be 30k, corresponding to the initial contract value minus the final contact value. 
This can also be applied when the negotiation is customer led and Sastrify is not actively driving it.

When are achieved savings captured and for which timeframe?


Achieved savings are locked in on the day when the final contract is signed or when the savings are realized (e.g. confirmed by a vendor).


For yearly or multi-year contracts, savings are calculated for the entire period of the contract. The total amount for this period is captured on the day of signature. 

For monthly subscriptions, Sastrify always multiplies monthly savings times 12 in order to display the full savings of an entire year.



Example 1: Reduce unused licenses
Sastrify helped to identify 10 unused Confluence licenses of $5/month each which were then successfully terminated.
Savings calculation: 10 x $5 = $50 / month x 12 months = $600 / year x EUR:USD ex-rate of 0.83 = €498 / year.


Example 2: Multi-year contracts
Sastrify helped to negotiate a discount of €10k per year for a two-year contract.

Savings calculation: 2 x €10k = €20k

How to read potential savings


When calculating potential savings, Sastrify bases its analysis and calculation on a number of different factors, depending on the tool and your current and desired contract with the respective vendor. 


Factors we consider include our first-hand experience in negotiating with a particular vendor, our pricing benchmark database, and analysis supported by our research, price comparison analysis, and data aggregation from multiple reputable industry sources. 


Unless otherwise stated, the savings potential represents the maximum potential identified by Sastrify. There is no guarantee that this potential can be fully realized, especially when it comes to contract negotiations. No two contract negotiations are the same, and the final price will depend on factors such as historical growth, projected growth or decline in contract volume, timing of the deal, the salesperson's position in the company, and even his or her daily mood.

 "Maximum potential" does not necessarily mean that there's an upper limit in every case. We regularly exceed savings targets and create new best-in-class benchmarksRead more about how to work with benchmarks.


As part of each potential savings post, Sastrify adds complete information about the potential, including the potential savings description and relevant information such as: your current pricing, potential discount, suggested implementation time, and a form of guidance, advice or next step on how to turn the potential into action. 


Below is an example where we indicate the range of potential savings (10-15%) and calculate with 15% as maximum: