In the professional services business, people are the assets. And like any asset, managers need to be concerned about the return their assets generate. In other words, professional service managers need to be monitoring each employee’s utilization rate. Cloud based resource management software can help managers optimize and increate employee’s utilization rate.
Increasing utilization is one of the simplest ways managers can increase revenue and profitability without incurring additional costs. For example, consider a service firm that has 50 billable employees on various projects. Each of these resources is billed at $100 an hour. If the firm has a 75% utilization rate and the month has 120 possible billable hours, it would earn $600,000 for the month. However, if the firm could identify a way to increase utilization rates by only 1%, it would earn an extra $8,000 a month in pure profit. Even a small increase in utilization rates can have a large impact on the bottom line.
The trick to optimizing utilization is knowing what employees are available and matching them with projects where their skills and talents will be used. Unfortunately, most firms do not have the resources in place to increase utilization. Instead, they maintain separate task and resource management systems. These systems act as silos of information and do not easily provide the level of detail needed to manage optimization. The end result is overutilization of some employees, underutilization of others, and overall disappointing operational results.
If this describes your firm, don’t despair. Top performing professional service firms are finding ways to optimize employee utilization by migrating to the best resource management software available. Surprisingly, this software is found in the cloud. Below are three reasons why your firm may want to consider cloud based software resource management software to help optimize your utilization rates:
- Allows Management to Sell Projects Knowing Specific Resources Are Available – By migrating both task and resource management to a single cloud based platform, firms will have greater visibility over where their resources are deployed. They will be able to obtain real time information regarding resource utilization and point in time knowledge regarding when the resource will be available. This allows management to sell projects knowing when a specific resource will be available.
- Increased Employee Satisfaction – The visibility that resource management software provides will help managers realize that one employee is overtasked and another is underutilized. By balancing these loads, both employee’s will be more satisfied with their roles.
- Optimize Skill Mix – Resource management software does not just provide details around when a resource is available, it also tracks the various skills and capabilities of each resource. As firms manage the talent of their employees, they will be able to forecast resource requirement and either hire or train your employee’s as appropriate.
Cloud based resource management systems will help managers gain a better understanding of their employee’s utilization rate. By increasing the rate, managers can significantly increase the profit to the bottom line. If you would like help understand the impact professional resource management systems will have on your firm, please contact us.