During a recent Field Services conference, I asked the audience to make the following calculations:
- Multiply the Average Billable Hourly Rate (or Cost) per person and the Average Number of Hours that person should be “off bench” per year. (When we looked at industry averages, we came up with $200/person X 2,175 and came up with $435.000 that represents how much an individual would contribute to the company’s bottom line if they were 100% utilized.)
- Now multiply that amount to the number of full-time, client-services personnel.
- The last thing we did during our exercise was then to measure how much a 1% improvement on their current utilization would impact the company.
Source: Resources as Revenue, 2014Imagine the group’s surprise when I saw companies with 500 service technicians and/or billable consultants calculate that if they improved their processes with goal of seeing a modest 1% improvement the immediate effect to their bottom line was more than 2 million dollars a year!
According to recent research cited in the white paper, Resources as Revenue: Field and Professional Services in the Era of Economic and Human Resource Hurdles, organizations that adopt effective resource management tools are seeing an average 3% improvement in resource utilization. For the companies with 500 client services team members, that equates to over 6 million dollars a year!
The last question I asked this audience is, “How long can they afford not making these system improvements”.
Learn more: Claim your complimentary copy of the white paper Resources as Revenue: Field and Professional Services in the Era of Economic and Human Resource Hurdles.
