How to measure the ROI of your Resource Management approach?
Agathe Placet
Content manager
June 21, 2023
4 min
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You may have felt it among your customers, or even within your consulting firm, winter is continuing in many markets. For example, the technology sector lost $7.4 trillion in valuation. in just one year.
And as with every market contraction, we judge each of our actions in light of the fundamental value of any business, namely KING (Return on Investment or return on investment in French).
The Resource Management do not escape it. If you are asking yourself the question of setting up a resource management software or to improve the Process In place, it is healthy to ask yourself what is the ROI you will get from it, because such a decision is not made without investment on your side, whether financial, of course, but also, even above all, human.
This is the approach adopted Napta teams when it comes to presenting our staffing software to consulting firms and ESNs but also when it comes to taking stock of its use in order to assess the before and after implementation of Napta.
We are therefore fortunate to be in a particularly good position to talk to you about the indicators to use to measure the ROI of your resource management. Our team selected three. Let's review them!
First of all, during this article, you will note that we are systematically talking about evolution, because who says “measurement” says “comparison”, an absolute value does not mean much taken as it is.
So let's get back to our sheep.
What is the Staffing rate, also called the Excluded Leave Activity Rate (TACE) and why should this element be, in our opinion, your main ROI measurement indicator?
The staffing rate allows you to enter at a glance what Percentage of the time spent by your collaborator was actually used to generate business for your firm.
To calculate it, you will use the following formula:
Number of days on billable services/(Number of potential days of your employee — Number of days off).
Logically, the higher the TACE, the more important your ROI is. That is the objective you are pursuing.
Whether your business operates on a fixed-price basis or by the time spent, it is crucial for you to identify the delta between presence and time spent on billable missions.
How the Ressource Management So does it help you reach this goal?
If you are using a Staffing tool and if the latter collects on the one hand the holidays and all the unforeseen events that punctuate the daily life of an employee (delays, personal emergencies, etc.) and on the other hand the time spent on client missions, you then have clear visibility on your TACE.
If there is a constant among companies setting up a Process optimized resource management, this is the obvious time saving that this generates. And that's where your increase in turnover lies.
Let's take 2 clear examples of saving time and generating more revenue.
Les feedback (often abbreviated to REX) are essential to learn from each project and each mission. That is why they are made mandatory in most practices.
So what do you think is the cumulative monthly time that your managers and consultants devote to this activity?
1 day? 2 days? More?
And now, imagine that this duration is divided by 2 or by 3 thanks to all the automation and simplification that your Staffing tool.
The time freed up can now be spent on other billable projects and therefore literally increase your revenue.
On another level, just as important, is the indicator that we call the Lead Time to Staffing. This KPI (Key Performance Indicator) allows you to determine your level of ROI by measuring the time elapsed between a resource request, issued for example on your staffing software by a manager and the actual staffing (or the commercial proposal sent to the client) decided by the staffing manager.
Experience shows that the more responsive you are in sending your Propale, the more you increase your chances of converting the lead.
The term Turn-over of your office includes both people leaving your business, but also those arriving. And the Ressource Management plays positively in both directions.
On the initial side, the fact of being able to limit, thanks to optimized resource management, both under-staffing, by restricting Intercontract periods, and over-staffing has a considerable impact on the daily life of employees and therefore on their desire to stay in the company.
Arrival level, your staffing tool, bringing together resource requests on one hand and Gaps of skills on the other, allows you to anticipate your recruitments, thus limiting the risk of casting errors.
When you know that the average cost ofA recruitment error corresponds to less than 30% of the employee's salary, we can immediately imagine the financial gains for your business.
The expected ROI should be the cardinal point of your Ressource Management And of software associate.
But this ROI is not only measured in light of the evolution of the TACE, the turnover or the margin rate. You also need to take into account the positive impact of optimized resource management on your employees and their daily peace of mind in order to have a complete vision of what this practice brings to your consulting firm or ESN.
Do you want to go deeper into the subject? We have lots of resources at your disposal to help you go further.
In addition to this subject, find the White paper “What metrics should you follow to properly manage your staffing and improve your decision-making?”
Also discover our guides, templates and checklists in the Resources tab.
See you soon at Napta!
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