Utilization is critical to the profitability of a professional services. firm. At our IT consulting firm, we set a utilization target of 80% and shared the target and results with all of our consultants and managers. I created the following chart and made it the first page of our weekly company dashboard:
I computed utilization by dividing billable hours by available hours. Available hours are computed by multiplying number of consultants by number of work hours in the week (i.e., 40 hours if no holidays). I added billable hours as a bar to show the relationship between billable hours and utilization. I also placed the utilization numbers in a data row. This added emphasis to this key statistic.
The time period for this analysis is also very important. I chose to look at the previous four weeks and the upcoming four weeks. Every week all the project managers met and assigned work to each consultant and each project for the next four weeks. Projections were most accurate for the upcoming week. It was easy to see how we did over the last month and how we might do over the next month.
From a technical perspective, the chart is a 2y stacked bar line chart. I adjusted the axis scales to make the billable hours bar appear below the utilization line. I added the breakeven and target lines as average lines placed on the 2nd Y axis.
Here is the PowerPoint deck that contains the utilization and billable hours chart and the rest of the professional services dashboard: