I have had some very good feedback on the discussion about consultant utilization, so I thought I would add part 2.

The second big secret to lifting utilization and billable hours is to BUDGET TIME. This does not mean client budgets, project budgets or $ billable budgets. What I mean here is to plan, budget and forecast your entire team by the hour. Yes – Budget Every Hour. This must be a central plan that everyone can see, access and update.

Every practice manager needs to know at all times five pieces of information regarding the next 30, 60, and 90 days.

1. Total Hours: This is the total number of hours you could ever sell in a given period of time.
2. Billable hours: This is the time for which you have a signed contact or signed statement of work. the date and time is locked in.
3. Forecast: This is the time that you think will happen and when you think it will happen – but has not been signed off by a client yet.
4. Non Billable: these are the planned hours that will not be charged to clients. This includes training time, Free time donated to clients and time spent on internal projects.
5. Available hours: This are the unallocated hours to which no work has been assigned. This is what you need to go out and sell.

The only way to know all of the above is to schedule by the hour. Literally have a an hourly plan per consultant for every day, week and month.

Now lets set up a little metaphor. Every hour is a unit of inventory. You sell hours. Work with this mental picture – Your professional services business sells light bulbs. Every hour each of your consultants walks into the warehouse and picks up a new light bulb and there are two things they can do with it. Option 1: they walk outside and give that light bulb to a paying customer OR Option 2: they walk outside and smash it on a large rock.

So the trick now is to stop people smashing their light bulbs. (I know the metaphor should stop now). Daily time sheets was a starting point. Now the second step is to manage strictly to your new schedule. What does that mean?

1. The schedule must right: It has to be managed daily, updated, time moved around constantly to ensure it is up to date. But at the beginning of every day this is the only truth in regards to who is where and what they are doing.
2. Make sure the daily time sheets reflect the scheduled forecast. This is where consultants are going to start yelling at me again. If the schedule says you will be charging client A for 8hrs work today – make sure there are timesheets entered at days end to match. If there was not >8hrs entered as billable – find out why. Of course in many situations it will be a legitimate reasons – but there are also a whole bunch on reasons for billing less that re not legitimate.

a. Client changed their mind on the last import so could not charge them: NO EXCUSE as you have a signed document stating what they wanted. The worst case is you fill that time with an additional task.
b. We had to reinstall windows, so we can not really charge for that: NO EXCUSE of course you can and you must charge for you valuable time.
c. Client turned up late so we did not start until 10am. NO EXCUSE their tardiness does not impact on your billing.
d. I got stuck in traffic. NO EXCUSE work an extra hour at the end of the day or dial back in from home to finish the job.
e. They said they were short of cash this month, so I did it for free: NO EXCUSE as it is not your decision to smash any light bulbs.
f. I finished the first part of the job early so moved on with something they asked for that was out of scope. NO EXCUSE as you now have started unplanned work, that is not scoped properly and may cost you many more hours than planned.

The above process provides not only a valuable process, but also valuable information:
1. This process will expose any serial under billers. These consultants do not mean to smash light bulbs, but find it easier to give a few hours away here and there.
2. This process will expose the lazy consultant
3. This process will show you who is working too hard, and needs support or a pay rise.
4. This process ensures you are focused on the hours for which you do not have a buyer. It gives you and you sales teams a chance to sell the hours before they are dashed against the rock.

Now there will be consultants that will not like the above process. If you have nothing to hide, and want the best and most profitable outcome for you employers then this will work well for you. Most of you are already doing this process in your heads – but by formalizing the process you will undoubtedly increase your utilisation levels.