Work out spend under management instantly with clear inputs, formula shown and shareable results.
Spend under management is the share of addressable spend covered by an actively managed contract. It is the headline maturity measure for a procurement function, and dividing managed spend by function cost gives the leverage ratio that justifies the team's size.
Spend under management
SUM % = Spend under managed contracts / Total addressable spend x 100
Leverage
Managed spend per cost unit = Spend under management / Procurement function cost
Third-party spend that procurement can influence. It excludes taxes, statutory payments, intra-group charges and, usually, direct labour.
Above 85% of addressable spend under management, with 70-80% competitively sourced in the last three years.