5 Most Critical MSP Metrics Series – Utilization by Member

For almost every service organization, time keeping is like kryptonite. Every service manager and owner know how important it is (for everyone else) to track their time in real-time. The reality is, it rarely happens.  More often than not, time is manual and happens after the fact, which makes it only a little better than an educated guess. Not only does this affect profitability and billing, but utilization understanding as well.

As our own MSP matured over the years we found that not everything that gets measured actually gets done (sorry Mr. Drucker), but pretty much everything that is tied into a compensation plan does! We began measuring utilization like most everyone else.  While the tracking of billable time (defined as time that is either truly billed or would be billed against a prepaid contract) is important, we realized that it definitely was not the answer in itself.  Especially since we have different goals for different roles.  I have a minimum expectation of 80% for helpdesk technicians, 76.5% for my engineers, 70% for a project engineer, 60% for a VCIO, 50% for a service manager, and displaying each one’s utilization requires either different scales, multiple charts, or ignoring certain people.

In order to effectively track utilization, you need to track as close to real time committed against a contract as possible and track individual utilization to ensure everyone is accountable to their own goals. It is best to track utilization daily so that you can see accounting mistakes in real time and make corrections. Otherwise, errors fall through the cracks and when they are found, the information that’s needed to correct the problem is already forgotten.

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