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Hours used and billed to make profitable use of time

Every manager of a consulting team strives to improve and maintain high billable utilization. Each consultant is, at least in part, evaluated and compensated for hours used and billed. Gaining visibility into billable usage or calculation mode based on manual processing is challenging. Oraroo provides the ability to easily calculate, manage and track usage (hours used) and billability (billable hours, billable hours) metrics for you as a manager to make profitable decisions.

Hours used and billed to make profitable use of time
Use and invoiceability as management indicators

Unlike businesses that offer tangible products, consulting firms offer a product/service made with a highly perishable resource – the consultants' time. A consultant's working hours cannot be stored and used later. Those hours pass, either being used to generate value for the organization or lost forever.

Utilization and billability are indicators that managers of consulting teams, those people who turn time into money, track.

As a manager you cannot increase the number of working hours in a day. But you can better track and manage resource usage in project management.

Each person in your team has a number of working hours, in other words a working capacity. The way in which that capacity is used, that is, the activities assigned to that employee during the program, is utilization. In turn, these hours are used for various purposes: some of them are used internally - in meetings, trainings, study, medical consultations, etc. -, others are strictly oriented towards projects / services delivered to clients. The former are non-billable because they are not directly related to customers, the latter represent billable hours because the result of the work performed within them is delivered to customers.

The non-billable hours are necessary to carry out the activities of legislative compliance or internal regulations. They are also necessary for continuous professional development to maintain the relevance of knowledge and competitiveness.

Your goals as a manager are to have all employees utilized to capacity and to keep the percentage of non-billable hours within a limit that does not affect your profitability.

The advantage of tracking these indicators in the Oraroo platform

Oraroo is a tool created for the efficiency of activity in companies with the aim of increasing productivity. The section related to these indicators – About your team – provides a structured view of the capacity and billable hours of each employee and your entire team.

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Aggregating data to calculate indicators is a challenge in itself, especially if the team is large. The advantage of the Oraroo platform is precisely the fact that it takes the information from the project attendance and data from the employee file (number of working hours, vacations, etc.) and automatically calculates the values of these indicators.

What does it help you with? To be able to make profitable decisions

If you notice, for example, that an employee spends many extra hours on an activity that takes less time for others, you can realize that they are not performing well enough. In this case you have a productivity problem to solve. You can look in detail at that situation and decide how to act more effectively. If the employee in question is a young person fresh out of college, it's natural to give them a mentor, training and, of course, time to become better performers. If, on the other hand, he is a demotivated employee, you will consider the most suitable levers for him to become profitable again.

In the Oraroo table, on the Billable Time column, you can quickly see the situation of each employee from a productivity perspective.

On this basis you can decide exactly how to act to maximize the value of the indicator. On the other hand, corroborating the information in this column with the one in the Post column, you can figure out whether it is normal or not for the billability percentage to be low. Because you have employees who have other duties (for example sales) than delivery to customers. They will have other established indicators, and the billability target could differ in their case.

One of the most important aspects of measuring and managing usage and billability is being able to do it with ease and consistency. Because Oraroo provides that – having this information in one place and being able to understand it at a glance – it makes your decision-making process easier.