Commitment Performance

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Commitment Portfolio centers the performance discussion around five core KPIs. A description and definition of each is as follows:

  • Net Savings : The total amount of money saved by using commitments compared to on-demand pricing. It is calculated as the difference between the cost of on-demand usage and the cost of committed usage.

Net Savings = (On-Demand Cost - Commitment Cost).

  • Effective Savings Rate : The percentage of cost savings achieved through commitments compared to on-demand pricing. It is a measure of the cost efficiency gained by using commitments.

Effective Savings Rate = [(On-Demand Cost - Commitment Cost) / On-Demand Cost] * 100%.

  • Utilization : The percentage of committed resources that are actually utilized. It indicates how effectively the committed resources are being used.

Utilization = (Used Commitment / Total Commitment) * 100%.

  • Coverage : The percentage of the eligible usage that is covered by a commitment. The calculation is relative to the commitment type.

Coverage = Covered Amount / Total Amount

  • Remaining Commitment Amount : The total monetary value of the remaining commitments that have not yet expired. It represents the future financial obligations for committed resources.

Remaining Commitment Amount = Total Value of Unexpired Commitments.