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Too Busy to Improve Billable or Field Utilization? $6,000,000 a Year Busy?

Published By Steve Beaumont
Too Busy to Improve Billable or Field Utilization? $6,000,000 a Year Busy?

During a recent Field Services conference, I asked the audience to make the following calculations:

  1. 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.)
  2. Now multiply that amount to the number of full-time, client-services personnel.
  3. 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.

Annual Increase ChartSource: Resources as Revenue, 2014

Imagine 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.

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Steve Beaumont Written by Steve Beaumont

Steve Beaumont is the SRP Solutions Market Manager at Planview and has worked in the Professional Services area for almost 25 years. He spent 12 years working as a Management Consultant for Deloitte, Coopers & Lybrand, and Ernst & Young, where team managed a team of consultants and had responsibility for managing the work pipeline, making resourcing decisions and ensuring that projects were delivered to a high quality whilst also managing the P&L. He also has spent a number of years working in the software industry helping to sell, implement and drive the enhancement of software solutions designed to help both PSOs and IT organizations to manage their businesses and delivery successful projects. Steve’s career started as a Management Accountant, from which he progressed into designing accounting software for use within the telecom company that he worked for.