1. INVEST IN EASY-TO-USE TIME TRACKING TOOLS
Streamlining time tracking is where you want to start, as it’s central to analyzing utilization. Almost all services organizations track time in some capacity. Most will also admit to needing to improve time tracking processes and compliance. Start by simplifying and standardizing project plans and templates and the associated methods you use to capture and track time. Keep it simple and make sure that team members can input time easily and from any device. Then be sure to provide detailed, written policies and procedures for all team members – no exceptions.
Once you have comprehensive and reliable time tracking in place, implement regular audits of time tracking and utilization (at a minimum, do this monthly, but weekly or even daily audits can be even more effective) to be sure time entries are being submitted by all resources and to keep an eye on utilization trends. Review and highlight under- or overutilized team members. Finally, take swift action to get your underutilized people billable again.
2. EMPOWER YOUR TEAM WITH VISIBILITY INTO PROJECT AND RESOURCE DATA
Improving billable utilization rates is impossible without complete visibility into up-to-date and accurate project and resource data. Insight into the progress of projects across portfolios anc clients, the time already spent on billable work, as well as the time still required before project completion is key to strategically assigning resources to projects. Without access to this data, resources will be assigned using gut instinct, which hardly ever results in improved utilization rates.
Many organizations leverage a SaaS solution with automation and business intelligence capabilities to house this data — including timesheet information and how things are progressing against milestones or initial scope. Trying to manage utilization metrics in spreadsheets quickly becomes unwieldy, so a resource management tool that is purpose-built for professional services organizations allows businesses to easily access information that they can be confident is accurate, up-to-date, and reflective of the current state of projects.
In addition to housing key data, professional services software solutions often provide alerts or surface red flags when a project may be veering off course, require more time from resources, or require additional or new resources altogether. Having visibility and instant access to project and resource data means there are fewer nasty surprises at the end of projects, where expensive resources have to be pulled in, perhaps from other projects, to put in hours to get the project back on track.
3. ALLOCATE RESOURCES PROACTIVELY, BEFORE THE CONTRACT IS SIGNED
Proactively allocating resources so that they spend as much of their time as possible working on billable work requires a great deal of planning. In a business that is resourcing reactively, time is often wasted moving resources from one engagement to another at short notice. Or people may end up on the bench between projects, with days or even weeks when there is no billable work for them.
One of the primary culprits for reactivity is the tendency organizations have to only commit resources to projects after contracts have been signed. In many cases, this is based on an earned skepticism about how much resource managers and project managers can trust data in the sales pipeline, where deals that seem likely never materialize, and close dates and project start dates fluctuate wildly. But if you can institute a culture of proactive resource allocation, where resources are soft-booked onto projects as soon as they reach a certain threshold of probability, it can have a significant impact on not just the timeliness if project kick-offs, but also on a forward-looking outlook on utilization that will enable your decision-makers to see conflicts and overutilization sooner and do something about it before revenue or client satisfaction are impacted.
By connecting purpose-built resource management software with your CRM, you get unprecedented visibility into the balance of demand and supply — the capacity of your global resource pool – unlocking windows of billable time that may have previously been siloed within a department or a single team. You get a more granular view of time and can allocate it in smaller amounts – hours instead of days. These insights and capabilities make it easier for resource managers to get the right resources in front of the right customers more of the time. Looking ahead and soft-booking projects as soon as they reach a high degree of probability, enables resource managers to plan ahead more effectively, maximizing the use of employees instead of expensive contractors, and assigning the best-fit teams to projects.
4. ESTABLISH A CENTRALIZED TALENT POOL AND SKILLS DATABASE
Centralization allows you to fill gaps quickly by tapping excess internal capacity before looking outside to a partner, freelancer, or contractor. For example, if a project hits delays and goes longer than expected, it’s likely that one (or all) of the resources on the original project are already soft-booked to an upcoming project. This causes a snowball effect — as those resources will not be available to start the next project until the first is complete. This ends up with project start dates being pushed, and delayed time-to-value for the customer.
Professional services projects are inherently unpredictable – because they are being delivered to a client with shifting priorities, the scope often changes, and timelines are not always set in stone. This means that resource managers must make last minute decisions around how to fill gaps that emerge. This often results in turning to more expensive resources like contractors to ensure a project can get up and running as quickly as possible. Turning to external resources is really just a short-term solution. In the long-term, consistently paying contractors or freelancers will eat into revenue, as they are almost always more expensive than leveraging an internal resource.
You can never be fully prepared for the changes that occur when delivering services, but having processes and systems in place for when the change does happen allows organizations to react to these changes strategically and adjust accordingly. One way to reduce last minute scrambles to fill resource gaps is having a one-stop-shop for managers to see exactly what internal talent and skills are currently available. This has the added benefit of getting a potentially underutilized resource from somewhere else in the organization off the bench and onto a project. As suggested by a recent skills survey from SPI, the best way to do this is by establishing a single talent pool and skills database across the entire organization. When faced with last minute resource demands — often caused by changes in project scope or timeline — managers can turn to a single source of truth to determine the options they have internally. If no one with the skills or talent required for a project is available internally, that is when it’s reasonable to look outside of the organization for help.
5. MONITOR AND REDUCE NON-BILLABLE HOURS
Tracking billable hours is key to improving utilization, but the hours being spent on non-billable work cannot be ignored. These need to be tracked diligently as well so they can be analyzed and optimized. Start by identifying a handful of non-billable activities your resources spend time on — for example, new business efforts, marketing, or administrative tasks— and track those hours at a detailed level so you can easily see the distribution of time and trends. The goal is to reduce this type of work where appropriate so resources have ample time to spend on billable work. Find inefficiencies – like the amount it takes to provide time and expense submissions – and look for ways to streamline those tasks. This allows resources to focus on value-added activities that advance your utilization, revenue, and margin goals.