Monitoring utilisation rates involves measuring the available time used for billable work. In amongst all the metrics project managers track, if you work in a project consultancy (think Worley Parsons, Wood, Genesis, etc.,) this one is the king. However, monitoring and optimising a team’s utilisation rate is the one critical aspect of resource management that often goes unnoticed.
Managing resources efficiently is the key to ensuring profitability and success. In this blog, we will delve into the importance of utilisation rates, their calculation, the ideal rate for complex projects, and how cutting-edge project management software like Proteus by Xergy can aid in tracking and managing this crucial metric.
Understanding Utilisation Rates:
Utilisation rate, in the context of engineering project management, refers to the percentage of time that a team member spends on productive, billable tasks in relation to the total available working hours. In simpler terms, it measures how efficiently your team’s time is being used on tasks directly contributing to the project’s progress. Put simply, the better utilised your team, the more you can bill for their time, the more profitable your business.
Calculating Utilisation Rates:
The formula to calculate utilisation rate is:
Utilisation Rate = (Billable Hours / Total Available Hours) x 100
For instance, if a team member worked 160 billable hours out of a total of 200 available hours, the utilisation rate would be:
Utilisation Rate = (160 / 200) x 100 = 80%
The Ideal Utilisation Rate for Projects:
In the energy sector, where intricate engineering projects are the norm, striking the right balance between utilisation rate and efficiency is essential. An ideal utilisation rate isn’t a one-size-fits-all metric. It varies based on project complexity, role, and the need for research, planning, and innovation.
It is easy to assume the best rate is 100% – in this way every penny spent paying your project team can be billed to a client. Often this is not realistic.
For complex energy projects, a utilisation rate in the range of 70% to 80% might be considered reasonable. This takes into account the fact that some amount of time needs to be allocated to research, collaboration, and unforeseen challenges that are inherent in such projects.
Tracking and Managing Utilisation Rates:
Enter project management software like Proteus. These tools are tailored to the energy sector’s needs, allowing project managers to effortlessly track and manage utilisation rates. Such software enables real-time monitoring of tasks, allocation of resources, and measurement of progress against predefined milestones.
With Proteus, project managers can use the project controls data to gain insights into each team member’s workload, task completion rates, and potential bottlenecks. This data-driven approach empowers managers to make informed decisions about resource allocation and project timelines.
Tips to Improve Utilisation Rates:
- Resource Allocation: Assign tasks according to team members’ strengths and expertise, ensuring that tasks are completed efficiently.
- Effective Communication: Promote open communication to prevent misunderstandings and unnecessary delays.
- Proactive Planning: Plan projects meticulously, identifying potential roadblocks and allocating time for research and problem-solving.
- Continuous Training: Keep your team updated with the latest industry trends and technologies to enhance productivity.
- Feedback Loop: Regularly review project progress and utilisation rates, and seek feedback from the team for process improvements.
Consider a renewable energy project where a team of engineers is developing a cutting-edge wind turbine technology. While the project demands high levels of innovation and research, maintaining a utilisation rate of 75% allows ample time for experimentation, troubleshooting, and collaborative brainstorming. The use of Proteus ensures that the team’s efforts are aligned with project goals, ultimately resulting in timely completion and profitability.
In conclusion, monitoring and optimising utilisation rates are paramount for engineering project managers in the energy sector. A balanced utilisation rate accounts for the complexities of projects, maintains high productivity, and leads to profitability. With advanced project management software like Proteus, the task of tracking and managing utilisation rates becomes streamlined, enabling teams to deliver outstanding results in the competitive energy sector. By following best practices and leveraging technological advancements, project managers can navigate the intricacies of energy engineering projects with finesse and efficiency.
Case Study: TechWind Solutions – Optimizing Utilisation for Better Profitability
Background: TechWind Solutions is a fictitious consultancy supplying the renewable wind industry, specializing in providing software development and digital transformation solutions for clients across diverse industries. They faced the challenge of maintaining profitability while ensuring their skilled workforce’s productivity and engagement remained high.
- Strategic Resource Allocation: TechWind Solutions began by analyzing its project portfolio and categorizing projects based on complexity, requirements, and skillsets needed. This allowed them to allocate the right resources to each project, ensuring that the right skills were matched with the right tasks.
- Real-time Monitoring: The company adopted project management software that allowed them to monitor project progress, task completion rates, and team workloads in real-time. This data-driven approach helped identify potential resource bottlenecks and allowed for proactive adjustments.
- Skill Development: TechWind Solutions invested in continuous skill development for its employees. Regular training sessions, workshops, and certifications ensured that team members were equipped with the latest technologies and methodologies, increasing their efficiency and reducing the time spent on tasks.
- Collaboration and Knowledge Sharing: The company encouraged a culture of collaboration and knowledge sharing. By creating cross-functional teams and platforms for sharing best practices, team members were able to leverage each other’s expertise, reducing the time spent on problem-solving.
Results: TechWind Solutions’ efforts in optimizing utilisation rates led to significant business success:
- Increased Productivity: By strategically allocating resources and closely monitoring workloads, the company was able to maintain a utilization rate of around 85%, ensuring that employees were engaged in meaningful, billable work.
- Higher Profitability: The improved utilization rates directly translated into increased project delivery efficiency, reducing overhead costs and improving project margins.
- Enhanced Client Satisfaction: With better allocation of resources and a more skilled workforce, project delivery times improved, leading to higher client satisfaction and repeat business.
- Employee Satisfaction: The focus on skill development and a balanced workload contributed to higher employee satisfaction, reducing burnout and turnover rates.
- Business Growth: As TechWind Solutions consistently delivered projects on time and with high quality, their reputation in the industry grew, attracting more clients and driving business expansion.
Takeaway: The success of TechWind Solutions showcases the importance of optimizing utilisation rates in driving business success. By strategically managing resources, investing in skill development, and using technology to monitor progress, consultancies can achieve higher efficiency, better client satisfaction, and sustainable growth.
While this example is entirely fictitious, the principles of optimizing utilisation rates are transferable to the energy sector and other industries. The key is to tailor the approach to the specific challenges and dynamics of each sector while maintaining a focus on efficiency, skill development, and effective resource allocation.
About Proteus Project Software
Xergy Group’s Proteus project management software is designed to work with your existing systems and to scale and evolve as your business grows. Created by project management leaders, for the diversified engineering consultancy sector, Proteus delivers an end-to-end work management software platform with detailed workflows from the early opportunity stage through to project delivery.
Proteus’ end-to-end project management software is a cloud-based system designed for businesses of all sizes to handle projects of unlimited complexity and is compliant with common project management frameworks and ISO standards. Each feature is aimed at making bottom-line improvements by improving utilisation, streamlining workflows, providing quick and efficient access to resources, and reducing overheads. Check out some of our client case studies to learn more about how Proteus makes a tangible difference.
How to get Proteus
We recommend getting setup on a free trial. Proteus operates under a software-as-a-service (SaaS) model. We offer flexible tiers and bespoke development services. The Standard tier starts at $40 per user per month and Pro is $55 per user per month. Billing is monthly or annually and we offer Enterprise packages for larger clients. For more information on our pricing visit our pricing page or get in touch with one of the team.
We designed Proteus to be simple, and that means you can get up and running on Proteus without an IT team or support from a programmer. You will want to spend a bit of time configuring the admin console so that you have everything set up to suit your company structure, but it’s very intuitive and you don’t need a PhD in IT. However, we want you to get the best out of what is a brilliantly powerful tool, so don’t hesitate to ask for our support. We have a team of product experts who are ready to help you with the configuration process, so get in touch today by filling out the form below: