Effective resource utilization starts small
For complete control of everything, start small. Full visibility and control over your project plan, schedule, cost, and budget are essential to identify inefficiencies and improvement areas. But is expecting 100% isn't always the answer? The real solution is smaller changes with bigger outcomes.
To find out, we're going to look at what changes you need to be making to improve resource utilization and how significant the effects of these are.
What is effective resource utilization?
Everyone knows you should be making the most of what you have. But how? Now that's the big question, with a surprisingly small answer.
Improving your resource utilization boosts performance across all metrics. But increasing it and creating significant gains isn't about making everyone work more; it's about freeing them to work more effectively.
If effective resource utilization isn't expecting impossible returns from people working impossible hours, what is it, and how do you measure it?
Some organizations can attain rates of utilization (billable over unbillable work) of 98%. But a more realistic measure of success is usually anything over 60%. But what's realistic for you?
Our experience shows us that for professional services, 85% is a solid target to aim for. But know your limits.
Understand that this target isn't for every organization, and pushing people too hard, may offer short-term gains, but will damage utilization rates in the long-term.
For more on what utilization rates you should aim for, you can read our Utilization guide here.
Benefits of better utilization
To reinforce the above point, better utilization is not about more work. It's about fine-tuning how you work, leading to producing more work, but without the hassle and pressure.
By helping your people use their time more effectively, they can achieve greater results. In reality, this is simply the difference between tasks and work. Realizing this and freeing people from tasks to focus on work is the key.
Tasks, even the billable ones, are all the jobs people have to undertake to do their work. Their work is what you're paying them to do and what makes you profitable.
Separating the two allows you to focus on what matters. By understanding all the tasks your processes comprise of, you can fine-tune them to be more effective.
This fine-tuning lets you remove outdated or unnecessary tasks, automate low-value or repetitive tasks and beyond. Doing this leaves your people with only the tasks they need to complete work more effectively.
How to free people to do more of what matters?
This review will often bring to light two key types of tasks to increase productivity and effectiveness: unnecessary tasks and low-value tasks.
Unnecessary tasks are those that no longer need to happen. This could be because the reasons for them have been lost to the sands of time or other tasks have superseded or duplicated this work. Or it could be because newer systems and solutions have now taken these tasks on board.
The fix here for your people is simple, as these tasks are simply removed from their day-to-day.
But what about low-value tasks? These tasks are still necessary, but is it essential your people do them?
Low-value tasks are things like data entry and admin. They are necessary but are often unbillable and repetitive. How do you free people from these?
The solution here often comes from the systems you use. Unlike many outdated and complex systems, modern ERP systems can often automate these tasks immediately. Building these into your workflows, so your people no longer have to do them is critical.
This freedom from the mundane and low-value is the answer to resource effectiveness. And just the simple act of automating these tasks can profoundly affect your resource utilization rates almost immediately. And that's before your people have even had time to do what they do best.
What this all means
It may sound like a small step, but the results can be huge. For example, even a 3.5% increase in utilization, managed correctly, will easily result in a revenue increase of 5%. Even boosting your people's engagement, wellbeing, and loyalty. Which is more significant than you think.
So how can you rationalize and improve resource allocation and use of time for your organization?