A sourcing event produces a negotiated saving: the difference between a baseline, such as the previous price, a budget or a benchmark, and the awarded price. That figure is a promise, not a result. It becomes committed when a contract or purchase order is issued at the new price, and it is realised only when invoices are paid at that price for the volumes expected. Savings realisation tracks each stage separately, so the three numbers are never confused.
The gap between negotiated and realised saving is often called leakage, and it has familiar causes. Requesters keep buying from the old supplier or off contract. The contract rate never reaches the purchase order, or the catalogue still shows the old price. Invoices bill a higher price and pass because no one matches them. Volumes turn out lower than forecast. Rebates and penalties promised in the tender are never claimed. Each cause sits in a different system and team.
Measuring realisation therefore needs a link from the award to what follows it: the contract, the purchase orders issued under it and the matched invoices. With that link, finance can see the realised figure per event, supplier and category, and procurement can find where leakage occurs. Agreeing the baseline method with finance before the event also matters, because a saving that finance does not recognise will not be believed, however well it is tracked.
How iProcure handles savings realisation
iProcure tracks savings in the same three stages: negotiated at the event, committed in orders and contracts, and realised on matched invoices, so every figure traces back to its documents. Department budgets, spend and savings are live today, computed rather than typed in. The full three-stage view is shown on sample data, because realised figures depend on the order and invoice modules, which are sample-data demos today.