Project Personal Average - 150 Revenue Days Per Annum

6 Pages·1994·0.64 MB·English

INPUT
Resear^i.
ulletin
A Publication from INPUT’S Business Integration Programme - Europe
Vol. V, No. 8 May 1994
Project Personnel Average 150
Annum
Revenue Days
Earning Per
Benchmarking has become very This bulletin considers two key areas:
R&D
fashionable in recent years as a expenditure and utilisation of
mechanism for analysing organisations’ personnel. On average:
relative effectiveness and efficiency and
identifying areas where business • Vendors spend four per cent of
R&D
revenues on methodology
processes need to be improved.
Consequently, there has been much
• Vendors achieve a seventy per cent
activity to endeavour to identify examples
utilisation rate.
of world class business processes,
regardless of the organisation’s business
Vendor Investment
in
sector. Indeed, the major IT vendors Methodology R&D
have themselves shown considerable
interest in re-engineering their processes As the focus of the major equipment
as their business environment has vendors has shifted from products to
R&D
become increasingly competitive. services, so the profile of their
expenditure has begun to change
This research bulletin is the first of two, accordingly. In order for these vendors to
that endeavours to provide some basic
succeed within the systems integration
benchmarking data for vendors operating market, they have had to develop their
in the systems integration and project own management
proprietary project
services environments. The metrics
methodologies. As some organisations,
shown below are based on the results of a IBM
such as Consulting, turn their
questionnaire sent to the majority of management
attention to consulting, so
major project services vendors,
there is a corresponding need to develop
requesting highly confidential data.
methodologies that can be used to
Seven responses were received, primarily
establish their credibility with potential
from the systems integration units of
clients and facilitate repeatability of
leading equipment vendors in Germany
assignments.
and the U.K..
©
1994 by INPUT. Reproduction prohibited. BIPR-E
INPUT Research
Bulletin
Exhibit
1
<
R&D
Expenditure
Spend as Quality R&D Overall Metho.dology Technology
R&D R&D
Proportion of
Revenues (%) . ’ . ..... :: . ; ‘ • ; .. .•' . . . ‘
Average CO 00 4 4
Minimum 4 2.5
1 1
Maximum 15 10
cn cn
Source: INPUT
In addition, the majority of vendors’ Interestingly, a professional services
professional services units in Europe are vendor interpreted quality more widely in
developing quality management terms of quality assurance within
procedures to achieve ISO 9000 individual projects with the result that
accreditation. The major vendors active this organisation estimated that quality
in the U.K. project services market have accounted for an amount equivalent to
typically achieved accreditation, but forty per cent of its revenues.
many
of their subsidiaries elsewhere in
Europe are still in the final stages of Overall, vendors estimated that their
R&D
working towards accreditation. expenditure was divided
|
approximately equally between
R&D
Exhibit 1 identifies the proportions of methodology and technology R&D,
their revenues that organisations with even the equipment vendors on
currently spend on quality - assurance, average now spending more than forty
control, and management - and on R&D. per cent of their R&D budgets on
methodology R&D.
The proportion of revenues that the
systems integration units of equipment Professional services vendors appear to
vendors spend on establishing quality spend a higher proportion of their
R&D
procedures varies between one and five revenues on than the equipment
per cent. The individual level of spending vendors, with a greater share of this
is probably affected by the stage the expenditure directed towards
organisation has reached in methodology R&D.
implementing quality assurance
procedures. One of the organisations that Project Personnel Utilisation
Rates
estimated its spending at one per cent of
revenues already accredited and
is
Exhibit 2 analyses the number of days
another merely recognises quality as an
that project services personnel spend on
area that will need to be tackled as a
training, holidays, and sickness.
priority in the near future.
(
2 © 1994 by INPUT. Reproduction prohibited.
INPUT Research Bulletin
Exhibit 2
Training, Holidays, and Sickness
Number of days Average Maximum M• inim; u..m.
annum
per • ' . ' •
; X-.; X; -X.•-X;X X;.-.-.-X-.: .••-.•X-X-xV.•.•X::'::::X'x-::Xv •'X-.-./•'
Training 13 15 10
Holidays 30 33 29
Sickness 6 8 5
49 52 45
Total
Source: INPUT
No distinction has been made between the of project personnel - assuming a total
various categories of project personnel, initial availability of two hundred and
since in most instances these measures fifty days per annum. In terms of
were identical for all project personnel opportunity cost of the staff involved, but
within a given vendor. Indeed there is excluding the cost of training provision,
comparatively little deviation in these the training investment is approximately
metrics between vendors regardless of 8.5% of each person’s annual billings.
the region of Europe covered by the
Exhibit 3 identifies the number of days
figures provided.
each category of personnel averages on
On
average these categories account for pre-sales activity.
twenty per cent of the annual availability
Exhibit 3
Number of Pre-Sales Days
Category of personnel Average Maximum Minimum
Senior business consultant 75 85 65
Senior IT consultant 45 85 20
Junior consultants 40 85 20
40 85 20
Consultants overall
50 65 40
Project director
manager 40 65 20
Project
Other project personnel 50 85 20
Project personnel overall 40 85 20
Source: INPUT
3 © 1994 by INPUT. Reproduction prohibited.
INPUT Research
Bulletin
Exhibit 4
Project Personnel Descriptions
Project director Responsible to client for project delivery on major projects
Project manager Responsible for individual area within major project e.g. management of one or
more subcontractors
Project personnel overall Includes all project personnel including consultants
Senior business consultant Includes management consultancy and high-level application-specific advice
Senior IT consultant For example, includes IT strategy development and high-level technical
infrastructure design
Source: INPUT
To provide guidance to respondents, the than fifty days per annum on pre-sales
definitions of project personnel shown in activity. The vendor’s success rates in
Exhibit 4 were provided to respondents. winning new contracts would appear to
be questionable in organisations where
Naturally, the more senior the personnel,
comparatively junior consultants are
the more time they spend on pre-sales
spending in excess of fifty days per
activity. Nonetheless, there was annum on pre-sales activity. For junior
considerable variation between vendors consultants, a reasonable benchmark
on the number of days that consultants
appears to be a target of less than thirty
spend on pre-sales activity. While this days pre-sales activity.
may
reflect definitional differences
between vendors, this benchmarking Exhibit 5 identifies the average number of
exercise suggests that only senior revenue earning days by category of
business consultants should spend more project personnel.
4 © 1994 by INPUT. Reproduction prohibited.
INPUT Research
Bulletin
Exhibit 5
Number of Revenue Earning Days
.....
Category of personnel Average ; :;v. Maxi‘ mum Minimum
.
Senior business consultant 100 150 50
Senior IT consultant 140 180 100
Junior consultants 150 180 100
Consultants overall 135 180 100
130 150 90
Project director
manager 140 180 120
Project
Other project personnel 155 200 100
Project personnel overall 150 190 100
Source: INPUT
It is in vendors’ immediate financial personnel may spend a greater
interests to maximise the number of proportion of their time on pre-sales
revenue earning days for all categories of activity than on subsequent revenue
personnel. In practice, however senior earning activity.
business consultants need to spend a
comparatively high proportion of their For all other personnel, the figures
time on generating sales. In some collected suggest that vendors should aim
where for a minimum target of 140 revenue
instances, particularly
A
earning days per year. number of
organisations use their senior directors
vendors already achieve utilisation rates
as pre-sales business consultants, these
well in excess of this figure.
This Vendor Profile is issued as part of INPUT'S European Business Integration Program.
INPUT
If you have questions or comments on this bulletin, please call your local organization or
W1X
Peter Lines at INPUT, 17 Hill Street, London 7FB, ([phone].
5 © 1994 by INPUT. Reproduction prohibited.
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INPUT Research
Bulletin
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