is utilization important to your organization?
TRANSCRIPT
Is utilization important to your organization?
Timemaster Software to manage projects to profit
What is utilization?• It’s a measure of the extent to which fee earners are actually
chargeable
– The overall rate of utilization of chargeable resources across the organization as a whole is a driver of profitability
• It is central to profitability
– Very few chargeable professional services staff can be 100% chargeable
– The extent to which fee earners are chargeable puts utilization under the spotlight
Timemaster Software to manage projects to profit
Utilization is important because:• Improvements in
utilization can translate into improvements in your bottom line
• Being able to track utilization is key
– Need a system in place to target and monitor resource utilization for current and future projects
• Projecting when fee earners are likely to be on the bench arms you with data on which to base decisions about how and when to redeploy these resources
Fee earners 30Average hourly charge out rate
£90
Chargeable hours per day 7.5Days per month 22Current utilization 67%Future utilization 76%BOTTOM LINE IMPROVEMENTSPER MONTH £39,225PER ANNUM £470,70
0
Timemaster Software to manage projects to profit
Start to address utilization & if it’s important by working out your current level• There are five different levels of
utilization:
1. Optimal
utilization
2. Over-utilization
3. Under-utilization
4. Mis-utilization
5. Unmeasured or ‘best guess’ utilization
Timemaster Software to manage projects to profit
Which level are you?Optimal utilization • Targets in place to track and report on the extent to which your fee earners are utilized
• Morale, staff retention and client satisfaction are all high• Project profitability in on target and growing
Over-utilization • Fee earners are stressed or ‘burnt out’ with low rates of employee retention• Project timescales may slip and client satisfaction levels may also be low
Under-utilization • Key individuals are over-worked• Motivation is poor and job satisfaction is low• Profitability may be static or declining
Mis-utilization • There is no detailed skills inventory so people are allocated to unsuitable projects• Low morale, missed targets, disappointed clients and poor retention rates• Profitability is declining
Unmeasured or ‘best guess’ utilization
• Most Profession Service Organizations have some measure of utilization• Easier to accommodate in smaller PSO’s
Timemaster Software to manage projects to profit
How to reach your optimal utilization rate1 After assessing your current level from our previous five categories you can make a judgment for your optimal level
2 Following that, the path to optimal utilization begins with identifying the key processes that impact it most
3 Then put systems in place to manage and improve them
Timemaster Software to manage projects to profit
Here’s our advice to help you achieve optimal fee earner utilization in seven easy steps
STEP 1 Set clear, measurable and achievable targets
STEP 2 Record chargeable time accurately
STEP 3 Track chargeable resources centrally & transparently
STEP 4 Plan resource allocation centrally
STEP 5 Manage project performance to targets
STEP 6 Invoice at key milestone points
STEP 7 Improve management decision making
Timemaster Software to manage projects to profit
Want to find out more about the7 steps to improving your utilization?
• Download the full article here:
– 7 Steps to Improving Fee Earner Utilization
• Get in touch with Timemaster
– Website: www.equisys.com/timemaster– Email: [email protected]– Telephone: +44 (0)20 7203 4001
Timemaster Software to manage projects to profit