MyProjectTracker – The Blog

Resource utilisation, staff utilisation, company utilisation levels – it all sounds a bit “big corporate and consultancy house.” And I’d agree with you – it does!

For your business though, it is a key number that everyone should understand.

So what does it mean then?

Utilisation is simply a fancy way of asking “what are my team actually doing and are they doing what I’d expect?”. In turn this poses the question “Is each person delivering value for my business?”. In MyProjectTracker world, we call it project allocation – sounds a bit nicer we think!

How does this apply in practice for the business manager?

Let’s do a simple example to illustrate.

Your business is architecture. There are four of you – the business owner, a senior architect, a junior designer and a PA.

You (the business owner) expect to spend about 50% of your time on delivering work to customers and the remaining time running the company (including sales activities).

The senior architect was employed by you and you expect that about 75% of this persons time will be spent on chargeable work. The same with the designer.

The PA does no customer work but manages the back office brilliantly. The PA is expected to be utilised 0% of the time on customer projects.

For arguments sake (and easy maths so I get it right), let’s assume that there are 20 calendar days a month that are worked.

Role	% Project Utilisation	Actual Mandays/Month
Business Owner (you)	50	50% of 20 which is 10
Snr Architect	75	75% of 20 which is 15
Designer	75	75% of 20 which is 15
Personal Assistant	0	0% of 20 which is zero

Of the 80 possible man days in the month (20 working days * 4 people), only 40 are actually spent on generating revenues for the company. So when calculating what to charge your customers, you need to divide your total costs for the month by the available days for projects and not by the total available days in the month. You then markup accordingly based on the profit you’d like to make.

If you don’t, you won’t be charging enough to keep your business going or you will be wondering why you aren’t making a profit (assuming enough sales of course!).

How often should I check utilisation and why?

You should check your resource utilisation levels every month to validate that your team are spending time on the right things and to make sure your charging model is correct.

If they are under utilised, this is not necessarily their fault! Ask yourself;

1. Do the sales levels indicate that this person should be busier?
2. Have you loaded that person with too much internal admin that not enough time is available for the “real work”
3. Maybe they’ve finished their task early on a project – great, you just made a bigger margin!

If they are well utilised i.e. well over the expected utilisation for their role e.g. the 75% for my snr architect  in this example. Let’s say you find he is working 95% of his time on billable activity. Sounds good but it could indicate;

1. He almost certainly working all the hours in the day and then some.
2. That your projects in trouble?
3. That you underestimated the effort required to deliver them?
4. Is the work he is doing taking too long because either he is not the right person for the job or he has been tasked with something too challenging for his skills? Does he need training?

Utilisation – still a horrible term, but I hope that I have raised it as an important part of your business success.

Tags: business management, efficiency, Project Management, time management