Synergy2016 – Utilisation vs efficiency: two tales of a timesheet - Jon Devine
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This document discusses the differences between utilisation and efficiency as metrics for measuring performance. Utilisation measures the percentage of available hours that a resource spends on assigned work. It indicates how effectively time is being managed to maximize billable hours. Efficiency compares actual output like billable hours to expected output based on hours worked to measure individual performance and return. While both metrics are concerned with how time is used to contribute to the organization, utilisation focuses on managerial effectiveness in allocating time, while efficiency measures individual performance and productivity levels. The document advocates managing time well to high utilisation targets while maintaining efficient output.
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Synergy2016 – Utilisation vs efficiency: two tales of a timesheet - Jon Devine
- 1. UTILISATION VS EFFICIENCY: TWO TALES OF A TIMESHEET JON DEVINE MANAGER – SERVICES & SUPPORT
- 2. Lusaka Infant Boys School LET ME TAKE YOU BACK IN TIME
- 5. THE MOST FRIGHTENING NIGHT OF MY LIFE
- 7. Utilisation Efficiency 40 10 THE SHOCK OF MY YOUNG LIFE… EXAMS!
- 9. FIGURING IT OUT Use the full time available Attempt all questions Do as much as you can on each
- 15. UNIVERSITY (MEL) – ALMOST CRACKED IT Time (utilisation) Planning time for preparation Planning time for each question Planning time for brain breaks Planning time for design at each question The questions (efficiency) Addressing each question Thinking out the solution prior to writing Using the full time available to review work
- 18. The last bit of the puzzle Understand what the client wants Plan time and delivery around what the client wants Deliver what the client wants – not what you want Effectiveness UNIVERSITY - SYDNEY – CRACKED IT
- 20. TIME MUST BE MANAGED TO A TARGET
- 21. TIME MUST BE PUT TO THE BEST USE POSSIBLE
- 22. TIME AND EFFORT MUST BE DIRECTED TO THE CORRECT GOAL
- 23. Meeting the clients' expectations within the time available, in an efficient manner, is the goal
- 24. UTILISATION
- 25. “The number of hours of work assigned to a resource as a percentage of their availability” Kpilibrary.com
- 26. 𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔 𝐔𝐔 = 𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁 𝐁𝐁𝐁𝐁𝐁𝐁 𝐇𝐇𝐇𝐇𝐇𝐇𝐇𝐇𝐇𝐇 𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀 𝐇𝐇𝐇𝐇𝐇𝐇𝐇𝐇𝐇𝐇 x 100 Available Hours = (hours per day x number of days x 52) – (annual leave public holidays + non working benefits)
- 27. Setting a utilisation KPI PUT UTILISATION TO WORK
- 28. 𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔 𝐔𝐔 𝐊𝐊𝐊𝐊𝐊𝐊 = 𝐒𝐒𝐒𝐒𝐚𝐚𝐚𝐚 𝐝𝐝𝐚𝐚𝐚𝐚𝐚𝐚 𝐡𝐡𝐡𝐡𝐡𝐡𝐡𝐡𝐡𝐡 𝐩𝐩𝐩𝐩𝐩𝐩 𝐑𝐑𝐑𝐑𝐑𝐑𝐑𝐑 𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀𝐀 𝐇𝐇𝐇𝐇𝐇𝐇𝐇𝐇𝐇𝐇 x 100 Standard hours per role = available hrs – (admin time + meetings/planning + HR time + hygiene time + brain break time)
- 29. “ A Passionate 90% is more productive than a panicked 110%” (R. Kreigall & D Brandt, Sacred Cows make the best burgers, 1996, p 37)
- 30. BILLABLE PROJECT TIME Should be 60% (utilisation) BUSINESS DEVELOPMENT TIME Should be 40% (unbillable) 10% over utilised CASE STUDY – UTILISATION
- 31. EFFICIENCY
- 32. EFFICIENCY IS A MEASURE OF THE ACTUAL OUTPUT OF AN EMPLOYEE AS COMPARED TO THE STANDARD OUTPUT: 𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞 = 𝐚𝐚𝐚𝐚𝐚𝐚𝐚𝐚𝐚𝐚𝐚𝐚 𝐎𝐎𝐎𝐎𝐎𝐎𝐎𝐎𝐎𝐎𝐎𝐎 𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒 𝐎𝐎𝐎𝐎𝐎𝐎𝐎𝐎𝐎𝐎𝐎𝐎 Actual output = billable hours spent on a job.
- 33. There is very little that is “standard” in a design practice Recast the formula: We know the numerator – that is actual hours We know the hours that we work So we can use the hours we have available to set a measurement Set efficiency to be: 𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄 = 𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁 𝐁𝐁𝐁𝐁𝐁𝐁 𝐡𝐡𝐡𝐡𝐡𝐡𝐡𝐡𝐡𝐡 𝐩𝐩𝐩𝐩𝐩𝐩 𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩 𝐇𝐇𝐇𝐇𝐇𝐇𝐇𝐇𝐇𝐇 𝐩𝐩𝐩𝐩𝐩𝐩 𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩 (𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞 𝐥𝐥𝐥𝐥𝐥𝐥𝐥𝐥𝐥𝐥) WHAT IS A STANDARD?
- 34. Not quite: Project efficiency - 𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞 = 𝐍𝐍𝐍𝐍𝐍𝐍 𝐫𝐫𝐫𝐫𝐫𝐫𝐫𝐫𝐫𝐫𝐫𝐫𝐫𝐫 𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁 𝐁𝐁 𝐫𝐫𝐫𝐫𝐫𝐫𝐫𝐫𝐫𝐫𝐫𝐫𝐫𝐫 Rate efficiency - 𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞 = 𝐑𝐑𝐑𝐑𝐑𝐑𝐑𝐑𝐑𝐑𝐑𝐑𝐑𝐑 𝐩𝐩𝐩𝐩𝐩𝐩 𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞𝐞 (𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁𝐁 𝐡𝐡𝐡𝐡𝐡𝐡𝐡𝐡𝐡𝐡 ∗ 𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩 𝐫𝐫𝐫𝐫𝐫𝐫𝐫𝐫) IS IT THAT SIMPLE?
- 35. CASE STUDY – EFFICIENCY 95% 40% 80%
- 37. UTILISATION A measurement of how well we are managing our staff’s time to ensure maximum opportunity to be billable It is managerial effectiveness
- 38. EFFICIENCY Measures the return being generated by a resource. It is a performance measurement.
- 39. ARE THEY TWO PEAS OF THE SAME POD Both are concerned with measuring how the time available is being used to contribute to the organisation’s performance
Editor's Notes
- Jonnie attended his first school – Lusaka Infant Boys school Became great mates with a boy called Michael Lynch Teachers thought we had ability We spent more time being a nuisance than paying any form of attention Solution – pack ‘em off to boarding school (if you are curious – apart from me standing in front of you – for my mate Michael – See “The Campaign Brief”
- Eagle School based upon Eton style of primary schooling Atop a hill 20km by road form the nearest township – Mutare – then called Umtali End of term one was another shock to the system The first night in my life I had spent not in the company of one of my parents – 7.4 years old – scared witless
- Massive surprise – these things called exams 3 hours long – which masochist dreamt this up – 3 hours sitting there writing. Made a complete hash of my first exams Finished early, half answered the questions had no idea 3 hour ordeal at the end of every term – who dreamt that up! 1st attempt at end of first term – launched to the task at hand Completely at sea Lots of time staring at the ceiling questioning my fate Finished a few of the questions Left lots of marks on the table
- After a few years this was beginning to gell By now I had figured out that I should take the full three hours I should divide my time up and make sure I did a bit of each question, even if I did not finish them all
- Xmas Holidays Africa – UK – New Zealand to start high school
- Through High school started to hone the skills: Started to get more organised, put 20 minutes aside to understand the paper Realised that needed brain time – allowed tome to drift between questions Allocated time to each question But: Still launched into each answer like a bull at a gate
- Studying Law 4 hour exams – now that was a shock to the system By this time I had utilisation cracked, now started to learn how to make sure I ,et all the set criteria and became efficient at using the time. Good time utilisation a and good model for exams – still getting B’s and B+ results
- Industrial relations Law Timing / Utilisation is now spot on Efficiency is pretty good Lecturer was a card carrying Trotskyite Having flirted with the radical theorem whilst doing law and having the theorem blown to pieces whilst attending a commune Wrote my papers from the Radical theorem I had been getting B’s and B+ results Adding meeting client need into the mix delivered and A
- Time is a little crucible that must be treasured and managed Planning is the key to ensuring the time available is utilised to its maximum possible – the macro plan
- Work must be performed efficiently – in an exam any waffle i.e. in efficient, again this point s to a micro plan for each question
- Work must ne effective – that is answer the question – in other words give the customer what the customer asks for.
- Answering the question is not the ultimate goal
- Utilisation is pretty straight forward it’s a measurement of hours applied to billable work compared to the hours available for billable work available hours are fairly straight forward – the number of hours available for work. That is Hours less leave
- Here we have the issue of determining what is standard hours Essentially it is the number of hours we would expect to be applied to billable work in any given day We must be realistic about setting this. 100% is not an option. Lots of little things come into play All in meetings – reduces time available Loo breaks Brain breaks Filling in timesheets (if we want to measure this stuff we must enter the timesheets – as important a part of running the business as is posting the invoice.
- An example of utilisation iN reverse. This client sees Business Development activities to be as important as project activity – They know that they need a pipeline of X dollars at any given time to win Y dollars of work. To help manage this they set a lower utilisation for the BDM staff, of 60% and review the utilisation monthly. Given that the utilization is based upon billable hours, if the utilisation is above 60% and it often trends higher than 70% then this is a risk to the business as there is not enough time being invested in sales activities.
- Efficiency is the comparison of the work done against the expected work done. Relatively easy if we are making a widget. Through empirical testing or reviewing historical output, we can measure hour long it takes to make a unit and compare against actual output. That is we know it takes 15 minutes to create a car wiper blade mechanism, we work 7.25 hours per day – our standard production is then 29 per day If we make 26 in a day, our efficiency is 26/29 = 89.7% But in a design environment – how do we determine the standard
- How do you define a standard for a site visit? I have no idea – it’s a forlorn task as there countless variables. How do you define a standard for conceptual design? A Myriad of factors come into play such as the client, the location, the vision, the constraints etc. Analogy – I want to put a 10 story building on the top of that rock vs I want to put a 60 story building in that stretch of desert. At the simplest we can only measure of that which we know. We know the numerator – actual hours We know the hours worked per day – less any leave time as being the hours that are available to be billable Hence Utilisation became the measurement of how well we are managing the time available to be used as billable And Efficiency becomes the measurement of how well the time is being deployed
- There are many ways of skinning the cat efficiently If we use budgets we can look at the revenue achieved against the budgeted revenue. This is two sided – also can be an indicator as to our budget effectiveness Rates – we can measure the actual revenue against the expected revenue for an employee. An alternate here is to measure against the staff members Actual target rate (that is the overhead cost uplifted by the desired margin.)
- Efficiency – after slide: 37 Client has 3 offices and where not sure of quite where the bleeding was coming from – had a good idea where the problem was but wanted to know for sure. In their situation they had staff working on projects across the whole organisation which blurred investigation into the project. We ran a variation of efficiency formula, sorted by staff office and the project office – very quickly the problem came to light. One office, a newer office was consistently pricing their bids low to win business which was then putting pressure on the whole organisation. We could see that any staff form any office working on a project won by Melbourne was losing money big time. The issue was that the Loss leader option was being used as a Strategic tool and not as a tactical tool. By that I mean the Loss Leader option should only ever be used as a sweetener to get a job over the line – for example come in lower of Feasibility Study, and claw the revenue back elsewhere – don’t submit each project as a loss leader.
- Hence Utilisation became the measurement of how well we are managing the time available to be used as billable It’s a management tool Staff often can not directly control their utilisation hence it is a measurement of management effectiveness (di I say 100% utilisation is not an option)
- And Efficiency becomes the measurement of how well the time is being deployed - a performance measurement \ - Two staff, same pay scale, same job, same types of projects, earn he same revenue, one takes on average 8 hours and the other 9 hours per task
- In many ways yes One is measuring the management of the time available One is measuring the return from the use of the time available Both are concerned with: The actual work being done The hours available How the hours available are being used