The 4% you need next year. What does a utilization increase mean for you?

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The 4% you need next year. What does a utilization increase mean for you?

It’s that time of year again. No, I’m not talking about Turkeys or Reindeer. It’s time to set next year’s fiscal plans and budgets. Whether you’re a growth organization or just trying to increase margins, 4% is a very important number for you and here’s why:

Service Performance Insight (SPI), the industry standard for Professional Services benchmarking, surveyed over 500 PS organizations across the globe and found that those utilizing a commercial PSA solution delivered on average 4% higher utilization than those that don’t.

What does a 4% utilization increase mean for you?

Let’s look at the following as an example:

  • 100 Billable resources
  • 2,000 Hours of capacity per resource in a fiscal year (this excludes 80 hours of holiday)
  • Realized Rate per Hour of $150/hr
  • 67% Utilization for organizations not using PSA per SPI
  • 20% Margin

ROI Screenshot
Granted this is a high level model, it proves 4% can mean a great deal for any organization. By simply increasing utilization by 4% our example yielded an additional $1.2M in revenue and almost half a million in margin. These results are achieved not by simply installing any PSA tool but by adopting a commercial PSA solution that streamlines your resource management, capacity planning, and project delivery. FinancialForce PSA is that solution. Check out our ROI calculator to see how 4% would help your organization.

As you’re planning and looking to improve next year let FinancialForce help you get that 4%. With our PSA solution leveraging the Salesforce platform we open up communication lines between Sales and Services, meaning 4% is just the beginning.

Want to see what your 4% looks like? Try our ROI calculator. To get a copy of the 2016 SPI Benchmark Report, Download it here.

 

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