KeyedIn has highlighted recent research showing how poor utilisation rates are. The research, carried out by the Resource Management Institute (RMI), was co-sponsored by KeyedIn along with Mavenlink and Upland. This is the second year the research has been undertaken and it was completed by 120 people across 56 companies.
The research goes into depth about utilisation and claims to be the most comprehensive around. SPI Research might argue with that statement. Its Professional Services Benchmark report (paywall), though different, has a larger sample set and also covers utilisation.
The research looked at three broad areas:
- How Professional services and Enterprise IT firms look at utilisation?
- What the results are used for?
- What are the current levels of utilisation?
How is utilisation measured?
RMI has advocated a shift to measuring utilisation using the 2080 work hours/year standard. The results show that companies are moving towards this standard and away from the alternatives. 62% of respondents now use the 2080 standard, an increase of 46% from the previous year. The research also looked at what categories companies are tracking. It found that many companies track several including:
- Internal projects
- Sick Leave
- Internal meetings
- Non billable customer facing
RMI noted that this extensive breakdown was surprising saying: “It is not clear why certain non-billable items like PTO and sick leave are being carried in the numerator by some.”
Enterprise Times takes an alternate view. Reporting on beneficial as well as unbeneficial non-billable time is important. Today, companies need to provide a better work balance and get a greater understanding of stress in the workplace. Capturing this level of detail can provide insights for business leaders that are important for the wellbeing of their employees.
What are the results used for?
The survey also looked at the frequency of reporting and who reviews the utilisation figures. The responses to the question of who sets the targets seem unclear, with 26% selecting other. Future questionnaires should aim to refine this. Other responses show that 32% or targets are set by the department and 12% by the manager. However, should these categories combine? 26% of targets are role based which feeds into the fact that 46% of the results are used in compensation and 76% are used in goals.
The results are mainly seen by leadership and Managers (80%) and only 39% by individual consultants. All these figures seem low as current thinking would say that an open approach to business performance is best.
Billable utilisation stands at a surprisingly low 60% on average. Around a third of organisations have less than 60% utilisation. This figure could be even lower. 67% of organisations include overtime within the utilisation calculation, potentially distorting the figures.
Shawn Dickerson, Senior Vice President of Marketing for KeyedIn commented: “That gap of resource productivity is very significant for teams that constantly feel under-resourced, because for a team of 100 resources, even a productive utilization increase of one percent can yield a productivity increase equivalent to two or more additional heads”
There are three areas that PSA or other project resourcing software can help address:
- Sick Leave: 1%
- Administration 7%
- Internal meetings 3%
- Other 7%
Reducing these numbers to zero is impossible and unwise. It is possible to reduce them using technology such as KeyedIn. Delivering automation, for example can help to reduce stress and decrease sick leave. It also helps to remove administration tasks. More accurate reporting can help reduce the number and duration of internal meetings. Resource management software can also help to track where consultants are spending time, thus eliminating the invisible “other” category
Matthew Muldoon, Chief Product Officer, KeyedIn noted: “KeyedIn’s Projects’ Integrated Portfolio Resourcing helps customer to resource the right projects with the right people and skills much more quickly than before, and ensure that those resource plans are enforced at the execution level. We offer a complete Resourcing lifecycle management tool that makes resourcing easier and more efficient than ever before.”
Enterprise Times: What does this mean
While the sample size of this research was small it has some interesting results. The respondents are almost certainly members of RMI. That they are starting to adopt the RMI standards is a demonstration of its value. It will certainly help to provide a better benchmark across organisations.
For KeyedIn, this provides some useful insights. There are still many organisations that are unhappy with their existing PPM and PSA software. 25% found their current tool insufficient. This should mean that there is still a large number of prospects out there considering the size of the industry. The Resource Management Institute is a growing industry body that provides research, training and certification around resource management.