IT services companies always struggle with managing the utilization ratio. Any services company on a growth path should have a resource utilization of 70 to 75% with a 20 to 25% bench strength to get ready for any new business. Since this under utilization eats into bottom line the challenge is to keep this percentage low and still be ready for any business and take care of the attrition in a bull market.
My point here is how do you effectively make use of these unused resources or bench strength. Companies use creative ways to do that. Some of them being
- Build tools for future engagements
- Work on in-house projects
- Build collateral or white paper
- Free consulting to potential business
- Shadow resources that are high risk possibilities
I am suggesting that companies should come out with an annual plan and list things that need to get done for the year. This becomes a strategic or operational plan for the year. Based on this plan the spare resources need to be used that makes this effort align to an overall plan than using resources as and when they are available. If your company's space capacity is 20% I suggest they have a senior management person managing these resources !!
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