Savings / ROI

Impact of OnDemand - Services

		e-Sourcing led reduction in COGS
		5%	10%	15%
Revenue ($M)	200	200	200	200
COGS - Materials ($M)	110	104.5	99	93.5
COGS - Labor ($M)	45	45	45	45
Gross Margin	45	50.5	56	61.5
Op Expenses ($M)	25	25	25	25
Net Income (pre-tax) ($M)	20	25.5	31	36.5
% increase in Net Income		28%	55%	83%

1	Assumes an organization where material component of COGS is 55% of revenue, labor component of COGS is 22.5% and operating expenses are 12.5% of revenue.
2	A 10% reduction in COGS can lead to a 55% increase in net income

Typical Savings / Indirect Spend