Hard Savings YTD metric calculation

  • Release version: Zurich
  • Updated March 31, 2025
  • 4 minutes to read
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    Summary of Hard Savings YTD metric calculation

    The Hard Savings Year-to-Date (YTD) metric calculates the total confirmed, negotiated savings from pipeline projects that were closed and completed within the current calendar year. This metric only includes actual savings—no estimates or projections—and reflects savings prorated based on the project's savings period overlapping with the calendar year.

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    Key Features

    • Metric Definition: Captures annual hard savings from projects in the Closed Complete state with defined savings periods overlapping the current year.
    • Date Range: January 1 to December 31 of the current year, with automatic year-over-year comparison against the previous year.
    • Proration: Savings are prorated according to the number of days the savings period overlaps with the calendar year, using a 365-day cap for multi-year projects to standardize annual savings rates.
    • Calculation Approach: Projects’ total savings are divided by their duration capped at 365 days to calculate a per-day savings rate, which is then multiplied by the overlap days within the year.

    How This Helps ServiceNow Customers

    This metric enables customers to accurately track and report realized savings from completed pipeline projects on an annual basis. It accounts for projects spanning multiple years by normalizing savings to an annual rate, ensuring savings are neither understated nor overstated. The built-in year-over-year comparison helps customers assess performance trends over time.

    Calculation Process

    1. Set the date range to the current calendar year.
    2. Identify qualifying projects that are Closed Complete, have valid savings dates overlapping the year, and contain a non-zero annual hard savings value.
    3. Calculate overlap days between the project’s savings period and the calendar year.
    4. Compute the per-day savings rate by dividing total savings by project duration capped at 365 days.
    5. Prorate the savings by multiplying the per-day rate by overlap days.
    6. Aggregate prorated savings across all projects and round to two decimals.
    7. Repeat the process for the previous year and calculate year-over-year change.
    8. Display the current year total and year-over-year indicator on the dashboard widget.

    Proration Formula and Importance of the 365-Day Cap

    The formula is:

    Prorated Savings = (Hard Savings ÷ min(Project Days, 365)) × Overlap Days

    The 365-day cap ensures multi-year projects are treated as annual savings figures, preventing dilution of savings over the full project duration. This adjustment provides a true reflection of annual savings performance.

    Example

    For three sample projects in 2024:

    • Project fully within 2024: Full savings counted.
    • Project spanning mid-2024 to mid-2025: Savings prorated for 184 days in 2024.
    • Multi-year project (3 years): Savings prorated with 365-day cap, counting full annual savings for 2024.

    The total Hard Savings YTD aggregates to $1,034,000, reflecting the sum of prorated savings for all qualifying projects.

    Hard Savings YTD (Year-to-Date) shows the total realized savings from pipeline projects that were closed and completed within the current calendar year. These are confirmed, negotiated savings — not estimates or projections.

    Metric definition

    The following attributes define the Hard Savings YTD metric:

    Attribute Detail
    Metric name Hard Savings Year-to-Date
    Pipeline state Closed Complete
    Savings field Annual hard savings
    Date range January 1 to December 31 of the current year
    Proration Yes — based on the overlap between the project's savings period and the current year
    Year-over-year comparison Yes — the metric automatically compares the current year total against the same date range in the previous year

    Key concepts

    • Annual hard savings is the field on a pipeline project record that holds the actual negotiated savings value, entered when the project is closed and completed.
    • Only projects in Closed Complete state contribute to this metric.
    • Savings are prorated based on how many days of the project's savings period fall within the current calendar year.
    • For projects that span more than one year, the per-day savings rate is calculated using a 365-day cap. This prevents multi-year project totals from being diluted across the full project duration and ensures the metric always reflects an annual savings rate.

    How Hard Savings YTD Is Calculated

    The following steps describe how the system arrives at the Hard Savings YTD figure displayed on the dashboard widget.

    1. Establish the date range. The system sets the calculation range to January 1 through December 31 of the current calendar year. This same process also runs against the previous calendar year to enable year-over-year comparison.
    2. Identify qualifying projects. The system queries the pipeline project table for all projects assigned to the current user that meet the following criteria:
      • The project is in Closed Complete state.
      • The project has a savings start date and a savings end date.
      • The savings period overlaps with the target year — the savings start date falls on or before December 31, and the savings end date falls on or after January 1.
      • The project has a non-zero value in the Annual hard savings field.
    3. Calculate overlap days for each project. For each qualifying project, the system determines how many days the project's savings period fall within the target year. This is the number of days between the later of (the savings start date or January 1) and the earlier of (the savings end date or December 31).
    4. Calculate the per-day savings rate. The system divides the project's total hard savings value by the project's duration in days. If the project spans more than 365 days, the duration is capped at 365 to normalize the rate to an annual basis.
    5. Prorate the savings. The prorated savings for each project equals the per-day rate multiplied by the number of overlap days. Projects where the savings period falls entirely within the current year receive their full hard savings value.
    6. Aggregate and round. The prorated savings values for all qualifying projects are added together. The result is rounded to two decimal places.
    7. Compute the year-over-year comparison. Steps 2–6 run a second time against the previous calendar year. The system calculates the difference and percentage change between the two year totals.
    8. Return the result. The current year total is displayed as the Hard Savings YTD value on the dashboard widget, together with the year-over-year change indicator.

    Proration formula

    Prorated Savings = (Hard Savings ÷ min(Project Days, 365)) × Overlap Days.

    Overlap Days = the number of days the project's savings period intersects with the target year's date range.

    The 365-day cap explained: For a project that spans 1,095 days (3 years), using the actual project duration as the divisor would spread the savings across 1,095 days and significantly understate the annual figure. Capping the divisor at 365 ensures the per-day rate reflects the project's intended annual savings value, not a fraction of it.

    Example calculation

    The following scenario demonstrates how Hard Savings YTD is calculated for three pipeline projects during the year-to-date range of January 1 to December 31, 2024:

    Pipeline State Hard Savings Savings Start Savings End Project Days
    PIPE-001 (Supplier Renegotiation) Closed Complete $120,000 Jan 1, 2024 Dec 31, 2024 365
    PIPE-002 (Contract Consolidation) Closed Complete $365,000 Jul 1, 2024 Jun 30, 2025 365
    PIPE-003 (Multi-Year Agreement) Closed Complete $730,000 Jan 1, 2023 Dec 31, 2025 1,095
    PIPE-001: Full overlap
    • Project duration = 365 days
    • Overlap with YTD range = 365 days (project falls entirely within the year)
    • Per-day rate = $120,000 ÷ 365 = $328.77/day
    • Prorated savings = $328.77 × 365 = $120,000.00
    PIPE-002: Partial overlap (starts mid-year)
    • Project duration = 365 days (Jul 1, 2024 – Jun 30, 2025)
    • Overlap with YTD range = 184 days (Jul 1 – Dec 31, 2024)
    • Per-day rate = $365,000 ÷ 365 = $1,000.00/day
    • Prorated savings = $1,000.00 × 184 = $184,000.00
    PIPE-003: Multi-year project (365-day cap applies)
    • Project duration = 1,095 days (Jan 1, 2023 – Dec 31, 2025) — exceeds 365 days
    • Overlap with YTD range = 365 days (full year 2024)
    • Per-day rate = $730,000 ÷ 365 (capped) = $2,000.00/day
    • Prorated savings = $2,000.00 × 365 = $730,000.00

    Why the cap matters here: PIPE-003 spans 1,095 days across three years. Without the 365-day cap, the per-day rate would be $730,000 ÷ 1,095 = $667/day — and only $243,333 would be attributed to 2024. The cap corrects for this by treating the savings as an annual figure, which returns the full $730,000 to the 2024 total.

    Final aggregation

    The final aggregation sums the prorated values:

    Pipeline Prorated Hard Savings
    PIPE-001 $120,000.00
    PIPE-002 $184,000.00
    PIPE-003 $730,000.00
    Total Hard Savings YTD $1,034,000.00