Discover how to increase billable utilisation in a more effective long-term strategy with ERP software.
The Professional Services Journal (PSJ) reported that when the market tightens, project-based firms - including architecture, engineering, marketing, PR, legal and accounting - have two basic choices to increase profitability:
- Focus externally to improve sales and marketing effectiveness.
- Turn inward and look for ways to reduce costs and increase profitability.
Firms have carried out cost-cutting in the short term, but are now looking at new ways to optimise their business. This includes improving billability and revenue.
What is the best way to go about improving billable utilisation?
With project-based Enterprise Resource Planning (ERP) software, Professional Services firms have a platform which allows them to use data from all aspects of their business to focus on improving billability.
Five steps to improving billability
These five steps, taken from the Deltek 2 Minute Expert Series, demonstrate how project-based ERP software has the power to help you better track time and output and, in turn, improve billable utilisation.
1. Provide accessible time capture:
Lost time costs money – a fact of life for many Professional Services firms like yours. To make it easy for your employees to log their time, invest in a system that is compatible with their phone, tablet and laptop. This will encourage them to keep up-to-the-hour records, regularly and consistently. It also eliminates the excuse for failing to log those vital hours, that could otherwise remain unbilled.
2. Set targets for your employees
Use the information your system provides to set clear, measurable and aspirational targets for your billable employees. This will benchmark their achievements and ultimately encourage productivity.
3. Identify the right talent
Employees vary in their abilities. What can be achieved by one person in a day could take the next person just half a day. Knowing where an individual’s strengths lie is a key revenue booster and could mean the difference between coming in on budget or expensively overrunning.
“45% of respondents (a significant minority) ranked talent hiring and retention as the most important or second most important challenge in project execution.” - Fragmented Processes Jeopardize Project Firm Buoyancy - Forrester Research.
4. Automate and integrate
When time is money, what could be more effective than integrating your time capture processes with other business functions, such as invoicing and business intelligence? There is a fine line between profit and loss, and an automated system could increase efficiency just enough to tip the balance in your favour.
5. Plan and prioritise
Thinking carefully about your critical path before you start a project will make sure you use your valuable time in the most lucrative way. It may, for instance, help to identify some crucial ways of making savings. Create ‘to-do’ lists that will allow you to keep on track with your goals. Plan in this way and you will be streamlining your efforts to maximum effect.