G-Cloud achieving 50% savings on average: what does that mean?

I read a slightly odd article today. It was in that popular rag Computer World UK.

It contained two sentences that while not in themselves contradictory, were certainly juxtaposed.

First, the story’s headline:

G-Cloud achieving 50% savings on average.

And later, this:

Some organisations have saved 50 percent on previous costs for IT services, according to [Tony] Singleton.

I don’t have the data. But these two sentences are far from tautological. Nor is either as mind-blowing as it might at first read.

Let’s take them separately and in order.

If G-Cloud supported 10 deals, the first five reducing costs from £1,000 to £100; and the other five reducing costs from £100m to £90m, then G-Cloud has achieved 50% savings on average. Five deals came in with a 90% saving; the other five came in with a 10% saving. ((5 * 10%) + (5 * 90%)) / 10 = 50%.

In this example, the total saving is 10.0008%. But the headline is grander.

And now to the second. Some organisations have saved over 50%. This is basically saying that two or more organisations have done better than halving their costs. Two organisation may have each cut costs from £1,000 to £400, with every other organisation’s spend dwarfing these two organisations’ spend, all bringing in trivial relative savings.

None of the other statistics in the article gave further clarity on the savings achieved. But a bogus spelling of the word “received” certainly made me question its journalistic credibility, perhaps unfairly.

It’d be good to get hold of the data set used to inform the assertions.

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