5 Keys to Delivering Better AEC Projects: Optimize Resource Utilization

Every business knows that one of the keys to profitability is to maximize resources – to be as efficient as possible. Of course, for an AEC firm the most valuable resources are your professional services staff. Optimizing the time and skills of your staff is critical to the delivery of better projects. Unfortunately, making the most of your team without overburdening them is a delicate balancing act. Over encumbered employees are often unable to perform at their best, while slack resources aren’t good for the firm in the long run.  

What could increasing your firm’s utilization mean? A little adds up to a lot. 

As a significant lever impacting profitability, utilization is one of the most keenly analyzed KPIs for AEC firms. The most common calculation is simple: look at the firm’s percentage of total labor cost that is spent on direct, revenue producing projects. A direct, billable labor cost of $600K and a total labor cost of $1M, yields a utilization rate of 60%. It’s clear that increased utilization should equate to increased revenue, but how much? 

The 2021 PSMJ A/E Financial Performance Benchmark Survey Report revealed a median utilization for AEC firms of 59%. What if we could get that up to 60 percent – what would that 1% add to profit? 

Let’s look at a firm that has 500 to employees, 80% of whom are billable at a rate of $150/hour. 

Illustrated table displaying sample billing rate statistics 

Based on the above, if this firm’s billable employees have a 59% utilization rate, they can expect $61,360,000 in revenue. However, if they can get an extra 1%, they would earn an additional $1,040,000 in revenue, without adding labor costs. 

The top quartile in the PSMJ survey reported a median utilization rate of over 65%. That would mean an additional $6,240,000 to the bottom line for the firm outlined above. 

How can AEC firms optimize utilization rate? 

Tracking and managing employee utilization is essential for good AEC firm management. Unfortunately, this is often easier said than done – tracking every resource effectively and accurately can be difficult.  

So, what’s the secret? How do some firms get more out of their employees? Most of the firms that achieve the highest utilization rates have better processes around resource management. These firms can find available resources and apply them to active projects. They can find over allocated employees and shift the workload to others. 

But at an AEC firm, resource management can be a difficult discipline to embrace. It’s harder still when you try to implement the process with horrible software. The only way the software will be widely adopted is to make it easy and fast: easy to find who’s available and fast to assign them to projects. This is where Microsoft Project Operations and aec360 comes in. 

The screen shot below shows the Resource Scheduling Board. On the left you see a list of employees who fit a particular profile. That may mean they have a particular skill set or they hold a formal certificate or license. You can apply filters to easily see employees that match any resource requirement. 

A screenshot of a sample resource scheduling board 

The blue, red, and white bars give us an indication of what these resources are working on and how booked they are. So, there is an easy way to filter employees based on their profile and an easy way to see their availability. 

The next question is, how quickly can we assign available resources to open task requirements? The screen above puts the user in a drag-and-drop environment so that’s all they need to do. Drag the open task requirement to the resource and let it go. It’s probably the fastest possible way for you to assign resources. 

Project Operations and aec360’s ease of use and quick utilization leads to full adoption of the software. 

Analyzing Utilization and Balancing the Load 

Throughout the process of locating and assigning resources, a lot of data has been collected regarding current utilization and future human resources capacity. Utilization vs. capacity is typically a concern for department managers who are trying to keep their people busy, but it’s also important to forecast utilization firmwide. In the screen shot below, Project Operations and aec360 shows us which employees are under or overutilized: 

A screenshot of a sample employee utilization report 

The view above looks at a particular role and allows the resource manager to “balance the load” and spread hours more evenly across the team. This has the potential effect of increasing utilization for the entire staff as time for more desired teammates becomes available. 

Utilization reporting is essential information to have. Any gaps between utilization projections and capacity should influence future staffing decisions, pricing practices and go/no go behavior. Any increases in your AEC firm’s utilization yields additional profits, having a big impact on the bottom line. Interested in learning more about aec360? Contact us today.   

Read the final article in the series on how to empower key stakeholders with insights.  

Michael D’Alesio is VP, Customer Care at HSO ProServ | Michael has served in many roles during his tenure in the Microsoft Partner Channel for the past 25-years.  Michael currently is responsible for supporting, enabling and strategically leading the HSO ProServ Team responsible for HSO ProServ D365 installed based customers to accept, adopt the Microsoft platforms to ensure they attain business value and user adoption.

Gary Mills serves as Senior Vice President of Finance, Planning & Analysis for HSO | ProServ. Gary’s diverse industry background brings a unique perspective to the company, with more than 30 years in corporate finance, banking and commercial real estate.

In his role as CFO of HSO | ProServ, Brian Lounds leverages deep experience implementing Microsoft Dynamics ERP solutions to drive excellence into the organization’s financial and practice management practices. Having worked with Dynamics solutions since 1998, he has a strong understanding of technology solutions and their application
to business initiatives.

Whit McIsaac is CEO of HSO | ProServ and brings over 20 years of leadership experience in the Microsoft Dynamics ecosystem to drive the group’s overall business strategy. Whit was Co-founder and CEO of aec360 and legal360 prior to merging these practices into sa.global, where he served as CEO of the Americas prior to launching HSO | ProServ.

Andy Yeomans brings nearly 20 years of Microsoft Dynamics sales and marketing experience to lead the HSO | ProServ sales organization. Under Andy’s leadership, the organization has shown strong growth and has consistently been recognized by Microsoft as a top performing partner, winning multiple Microsoft Inner Circle and Partner of the Year awards.

Jan Dahl Sorensen’s deep experience with Microsoft Dynamics gives him a unique foundation to guide the HSO | ProServ client success team. As part of the original development team under Damgaard Data, Jan has been working with the Microsoft Dynamics ERP solutions since 1995.

Joe Stuckey is EVP and Director of CRM Product Development for HSO | ProServ, leading the company’s CRM product development efforts across the legal, AEC, consulting, and accounting markets. Joe leverages the power of Microsoft Dynamics and Power Platform technologies to design and develop purpose-built industry solutions.

Paramesh Rajan is VP, Technology at HSO | ProServ. Paramesh has served in many Microsoft Dynamics project and program management roles over the past 20 years, and currently drives the development of the organization’s vertical ERP and HR solutions and outsourced development services.

A highly respected Microsoft Dynamics veteran, Jen Wisemore serves as CAO for HSO | ProServ. Jen was instrumental in the launch of sa.global’s US subsidiary in 2007 and has served in a wide variety of roles within Microsoft Dynamics consultancies across sales, pre-sales, program management, and leadership capacities.

John Aschenbrener is Director of Delivery Services for HSO | ProServ. John brings over 20 years of Microsoft Dynamics project and program management, consulting, and architect experience to his current role where he is responsible for driving PMO standards, methodology, and overall project delivery.

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In his role as Chief Operating Officer, Sean Skiver brings nearly 25 years of broad Microsoft Dynamics experience to provide strategic leadership around product development and client delivery services across the organization’s solutions and industry segments.

Amy Spencer leads the team that is responsible for go-to-market strategies, messaging, and demand generation in the US.

Amy earned a Bachelor of Arts degree in Communications from The College of New Jersey and has 25+ years of experience in marketing management for technology and professional services companies.

As Vice President of Human Resources for HSO, Kristen Ramerini is responsible for initiatives including recruitment, onboarding, professional development/career progression, performance management, culture, and employee retention. Prior to her position with HSO, she worked in human resources and recruiting for Seviroli Foods on Long Island and CCN, Inc. in New York City. She holds an MA in Industrial/Organizational Psychology from Hofstra University and is PHR certified.

Darren Gooding is VP of Delivery for HSO | ProServ, leading the company’s CRM delivery across the legal, AEC, consulting, and accounting markets. Darren applies his 25 years of experience and HSO’s industry focused intellectual property to successfully deliver large-scale, global engagements that ensure customer success.