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Perspective Delivery

KPIs

Capacity

Months in Pipeline

\[ MonthsInPipeline=\frac{PipelineDays}{CapacityPerMonth} \]

where:

  • \(PipelineDays = E(ProjectDays|StageProbability)\), which is the expected number of project days given the probability of a stage in the sales pipeline leading to a project
  • \(CapacityPerMonth= FTE \cdot B^{external} \cdot 20\), which is the number of full-time-equivalents, multiplied with the billability for a given month, multiplied by 20 days per month.

The KPI indicates how much new business can be expected from our sales pipeline, in relation to how much we can deliver.

If the value is too low, we have excess capacity. We have the following options to counteract:

  1. accelerate the marketing machine

  2. reduce the team size

If the value is too high, we lack capacity. We have the following options:

  1. we can actively manage customer expectations

  2. we could reduce marketing budget

  3. we could hire new staff

  4. we can reduce the allocation to internal projects, by that increasing \(B^{external}\)

Utilization and Billability

Note

The following key words are important here:

  • Fillup
  • Billable
  • Billability
  • Utilization
  • Free

This KPI measures how much of the time spent by employees is billable to customers.

The generic formula is:

\[ \%B^x=\frac{T^{x}_{e,t}}{T^{total}_{e,t}}\times 100 \]

Where \(B\) is billability, \(x\) is the referenced timelog measure, and the dimensions \(e\) and \(t\) stand for employee and time, respectively.

We have different versions for \(x\):

  • \(T^{logged}\): all time logged in planio
  • \(T^{billable}\): all billable timelogs for both internal and external projects. A timelog is considered billable if
    • timelog and task are both billable
    • time spent is below max billable
  • \(T^{external}\): time spent on external projects
  • \(T^{filled}\): we calculate this by assuming that each weekday on which a client works, we have \(n\) work hours. For a full-time employee, \(n=8\). This is set and calculated in Power Query.

There are multiple versions, based on the different time

3-perspective-operations-time-logged.png

We can now calculate the following KPIs:

Utilization

\[ \%U=\frac{T^{logged}}{T^{total}}\times 100=\frac{A+B+C+D}{T^{total}} \]

Total Billability

\[ \%B^{total}=\frac{T^{total\;billable}}{T^{total}}\times 100 = \frac{A + B}{T^{total}} \]

External Billability

\[ \%B^{external}=\frac{T^{external\;billable}}{T^{total}}\times 100 = \frac{A}{T^{total}} \]