Importance of Resource Utilization in Professional Services Companies

Professional services firms offer customized, knowledge-based services to clients. And rather than selling physical inventory, they sell time, expertise, and unique perspectives by the hour or by the project.

Your most valuable assets are your experts — and the specialized skills and deep insights they bring to the table. They literally are the product.

Resource utilization helps professional services orgs secure a competitive advantage – allowing them to leverage resources to fuel growth, boost profits, and stay in the game for years to come.

Here, we’ll look at the challenges of maximizing resource utilization – and what you’ll need to overcome them.

Maximizing Resource Utilization Drives Performance and Profitability in Professional Services Companies

Resource utilization is a metric that measures productivity and performance over a specific amount of available time (aka capacity) – allowing you to calculate how much time employees spend on billable client work versus non-billable tasks like data-entry.

In this piece, we break down the process of calculating utilization rates, interpreting your findings, and using them to improve your performance.

Reducing the amount of time spent on low-value, non-billable work can have an immediate impact on the bottom line. Increasing billable hours optimizes profits and enables firms to take on more work, hire top experts, and attract perfect-fit clients.

But only to a point.

On its own, resource utilization simply tells you how busy people are. You’ll need to look at utilization rates in context with other KPIs to understand how teams are performing, where they waste the most time, or whether you’ve got the right people on the right jobs.

Keep in mind, “resources” are people. Which means, they can burn out and make mistakes, miss deadlines, and eventually, quit. It’s important to ensure that each person has a balanced workload – with projects aligned with their skills, interests, and preferences. And – that you provide the tools and training they need to deliver the right results.

Of course, none of this can happen until you have a unified cloud ERP in place – with baked-in project-management capabilities and AI-driven insights.

Fragmented systems and inaccurate data prevent project leaders from knowing who truly is – or isn’t – available to take on new work. As a result, you end up with uneven workloads – which means leaving money on the table while resources hang around on the bench.

The more moving parts enter the mix, the more complicated resource management becomes. And, in turn, the more you’ll need from AI/ML-based solutions to keep everything straight — aka profitable, predictable, and compliant.

Naturally, this starts with an ERP solution like D365 that centralizes all data in one place and provides full visibility into the entire portfolio.

A key part of this is making sure that you have an integrated time-tracking solution. Billable hours are directly linked to utilization and play a key role in planning, forecasting, sales – basically everything. When you can track billing and resource utilization at the individual, project, and portfolio level – you unlock new opportunities to drive improvements.

Then, you might combine D365 ERP with Power BI to manage resources with better visibility, reducing the risk of error, employee burnout, inconsistent client experiences, among other issues that prevent you from maximizing the return on your talent investments.

Or — seek out a CRM solution that can help you bridge some of the gaps between business units and deliver better client experiences.

For example, Cobiscorp invested in D365 Sales and Customer Service apps to unify and strengthen its commercial strategies – on a global scale. The company is based in Ecuador, but operates out of 15 different countries, building banking software for financial institutions across the globe. So, not only are they dealing with different currencies and regulatory requirements, but also different days-off, billing models, and processes.

Professionals collaborate on a variety of complex projects with multi-disciplinary teams executing on different components – often from different locations. By adding D365 Sales and Customer Service apps to their existing stack, Cobiscorp was able to unite its global brand, streamline financial operations, and drive interdepartmental collaboration across all business units and locations.

Final Thoughts

The bottom line here is resource utilization is an urgent priority for any professional services org. Whether your firm is able to deliver projects on-time, attract and retain clients, and consistently serve up valuable insights and experiences – all of this lies in the hands of the human resources your clients depend on.

Velosio works with professional services organizations to unify core financials, project management, and more in one centralized ERP.

Our Microsoft experts help clients identify and implement solutions that allow them to match the right people to the right projects, increase project profitability, and ensure that every project is a success.

Contact us today to learn how our solutions and services can help your firm drive productivity, profits, and lasting success.