Friday, February 1, 2013

How to calculate Team utilization index?

Joey has been promoted as a team lead and obviously he is very happy today. He was aiming this profile change since few years. With the new role comes new responsibilities and Joey has been training and acquiring team lead skills for quite some time.

A month later, I saw Joey coming to my desk. "Do you have some time? I have some questions." – Joey said”. “Sure – I replied”.

Joey: I am working on some reports for the management and I did not understand the team utilization. How can I calculate my team utilization?

It is all easy. Relax and pull up a chair. How many team members you have in your team - I said.

Joey: We are a team of five people including me.

Does your team uses any tool, template to record their effort hours? – I said.

Joey: Oh yes, we use a web tool to record all our effort hours. We enter how many hours we have spent doing a particular activities.

Great, then pull all the effort hours that your team has entered in that tool for the month. – I said.

Do you maintain leave records for your team, no. of days your team has to work in a month? No. of hours your team has to work in a day time?

Joey: Yes we have a excel spreadsheet that I maintains for all the resources.

Good, so you have all the inputs ready with you to calculate your team utilization. – I said.

You need to first calculate “Total available Hours” of your team. This can be done by multiplying No. of working hours per person of your team into No. of working days available in the month. Then multiply it by No. of team members you have in the team.

Total available hours = No. of hours per head X No. of working days in the month X Team size

Total available hours = 8 X 22 X 5 = 880 hours.

Next, you have to calculate “Total Leave hours” of your team. This can be done by looking at number of total leave taken by your team and multiplying it by No. of working hours per person.

So, if your team has taken 10 leaves in the month then your Total Leave hours are:

Total Leave hours = No. of hours per head * No. of total leaves taken

Total Leave hours = 8 * 10 =80 hours.

Next, you have to calculate “Actual available hours”. This is done by subtracting Total leave hours from Total hours available.

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Actual available hours = Total available hours – Total Leave hours

Actual available hours = 880 – 80 =800 hours

Next, you have to take “Total Effort hours” that your team has spent doing all activities in the project. Let‘s say it comes around 750 hours.

So to calculate your team utilization you have to divide Total Effort hours by Actual available hours.

Team utilization percentage = (Total Effort hours / Actual available hours) * 100

Team utilization percentage = (750/800)*100 = 93.75 percent.

So, you can report that 93.75% is your team utilization. Now, as a team lead you to figure out where does the rest of hours goes to.

Joey: Oh wow, you made it so simple for me. Thanks a ton.

You are always welcome dude – I said looking at his face which was smiling all the ways.

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