How Resource Utilization Can Help You Boost Profit.
IT Service Managers | IT Project Management | Resource Utilization
This article is the third and final installment in my three-article series on Aligning Service Manager’s focus with the company’s #1 goal: making more money (profit).Each article examines one of the following topics, exploring what they represent, how to benchmark, track, and improve; and finally, how they make more money for the company:
Time to Completion
Number of Open Tickets
Resource Utilization
To read the Introduction to the series or Time to CompletionTo readthe blog onNumber of Open TicketsTo access all of my blogs Please Note: My expertise is as a Resource Planning Analyst, so I write from the perspective of mining and transforming data into golden information for Service Managers. In this series, the “Gold” is making more money for the company (profit).Article 3: Resource UtilizationLet’s cut to the chase. Resource Utilization is all about increasing profit. While it does have the side benefit of having more bandwidth without hiring, at the end of the day what we are really after is profit.
Benchmark: Do You Know What Your Resource Utilization Number Is?
My assumption is that you know, in general, what your Resource Utilization number is. If you are not sure what your company’s Resource Utilization is, we recommend running the PSA/IMS default Resource Utilization report. For Autotask, roll over “A” -> Reports -> Resources -> General -> Resource Utilization (Right Hand column 2nd one down).
The default Resource Utilization (RU) report benchmarks the existing Resource Utilization levels. However, after using the report for many years, it does not seem to identify the coaching moments Service Managers need to improve the RU metric.
The default report seems to be lacking in several areas:
It is a manual report and cannot be scheduled to run.
It is missing markers highlighting the most common profit loss areas.
It mixes internal company time with customer non-billable time.
It is hard to compare with the budget that is based on dollars rather than hours.
It does not call out the technician’s unknown time so that it can be managed.
It cannot be customized to match how your business operates.
It blows up on holiday weeks – And this is the real kicker!
Track: Use the Advanced Autotask Resource Utilization Report
After the November MSP-Ignite Service Manager Peer Group conference call, one of the members asked if there was a way to re-write the Autotask default RU report in Live Reports. The reason for his request was so it could be scheduled to run and not built each time it is needed. It took some time to write, but as I showed it to other Service Managers, they liked what they saw and requested changes to highlight the coaching moments listed above. With these big changes, along with a few minor ones, the IT Service Managers were able to improve RU by 4-8%, increasing the company’s profit by $12K to $25K per technician per year. To download a copyof the Advanced Autotask Resource Utilization report, visitwww.SBuyze.com/Offerings.Just about the time the Advanced RU report was humming along and four other Manage Service providers were using it to improve their Resource Utilization, the holidays hit. And, wouldn’t you know it; the report blew up! Some technicians were reporting correctly, while others had available hours, or billable hour goals, and any of the other data that flows downstream was all messed up. Now I can tell you, having one problem across the board is a lot easier to fix than something that is right sometimes and wrong the rest of the time. (It is kind of like fixing an intermittent problem or a leaky roof on a sunny day.) As it turns out, the Autotask Default Resource Utilization report is no better.
How toImprove Resource UtilizationEach Week - in just 30-45 minutes
1) Making sure all the time is in. The Advanced RU report highlights technician’s time that’s missing. By letting technicians know you are checking their time every Monday or Tuesday morning, they get with the program within a few weeks.2) Unknown time. We realize at the pace we resolve issues, not every minute can be tracked. The Advanced RU report highlights unknown time that is more than 10% of the work week. A quick conversation with technicians usually changes habits so they pay more attention to getting their time in before they forget what they did.3) Company time. The importance here is less on the technicians and more on management (although I did find a ticket in our company name that should have been a customer facing T&M billable). How many hours are being spent on company projects and tickets impacting the schedules? Some is required, but too much hurts the company’s cash flow. The Advanced RU report highlights how many hours are being used for the company on an individual, department, and company-wide basis.4) Customer facing non-billable time. This is where most of the wins are. Almost every week, I find $300-$500 in time coded as non-billable that should be billable. Some of it (about 25%) is covered under Managed Service Agreements and does not really impact bottom-line profit, but it is impacting the managed service’s profitability picture. The rest is like finding “Gold” (profit). Some non-billable time is legit, such as warranty or business development time. Often a significant portion is either miscoded or looks like business development, but in this case is billable – for example, a paid Network Assessment.5) Billable hours’ goal not met. This is just a flat out coaching moment with technicians. The company has expectations. Those expectations roll into the budget process impacting finance and spending decisions. If the majority of the team is not meeting the goal, then maybe the company is expecting too much out of the team. If one or two people are not meeting the goal, then you have a case of individual technicians not pulling their weight.
Focus on Resource Utilization to Make More Money for the Company
The impact on profit for each 1% increase in Resource Utilization per technician is about $3K per year per Resource. On average, for Service Managers focusing on Resource Utilization, the percentage increase is between 4% and 8% per year per Technician/Agent/Engineer, etc. - or about $12K to $25K on the bottom line. This alignment alone between Service Manager’s focus and the company’s #1 goal (profit) is significant.If your company’s Resource Utilization is below 80%, please sign up for a FREE 30-minute Resource Utilization coaching call to learn how it can be improved. Stephen Buyze is a Resource Planning Analyst who is “Empowering Service Managers to increase profit.” For more about Stephen BuyzeTo follow me, Stephen BuyzeFor more information about MSP-Ignite Service Manager Peer GroupsFor more HDI “The Association for Technical Support Professionals.”