Capacity Planning in OpenAir

Capacity planning is an essential part of managing a project-based business. How do we define capacity planning? Generally, it answers the question, “what is the staff I have available to deliver the services that I sell?” If I have too many projects in the pipeline to sell and not enough staff, that’s not good. If I’ve got too much staff and not enough projects, that’s not good.” So we must keep an eye on the balance of our delivery capacity. And so we see there are a few different ways to think about capacity and how to produce reports that will help you make decisions to keep a balance of resources to projects, all while managing profitability.

NetSuite OpenAir has a lot of features that can assist you in capacity planning. This article focuses on capacity reporting to provide the information needed for capacity planning.

Ways to Generate Capacity Reports in OpenAir

You can generate capacity reports using OpenAir in several ways:

1.   FTE

As a user, you may want to track your full-time equivalent (FTE) headcount. That is, how many FTEs do you have versus FTEs you need? OpenAir handles this reporting capability quite well.

2.   Hours

Hours, in this case, refers to resource hours or duration for delivery. Running capacity by hours gives deeper insights into your project. It looks into whether hours of resources and hours of work ahead match. FTE is a reliable reporting capability in itself. But it’s limited. With hours, you start diving into more details. It paints a more vivid picture of whether you’re in good or bad shape in accommodating your customers.

With hours, you’ll get into holidays, time off, and the capacity of your resources – you don’t get such valuable data from an FTE report.

3.   Money

You can gain insights into the ratio between target revenue generation per resource through the monetary perspective. In other words, do you have sufficient capacity resources to meet your budget for target revenue?

How to Generate FTE Capacity Reports

Putting together an FTE report in OpenAir is relatively simple and quick. You only need to go to the “company summary report” and type “FTE” in the measures. A number of FTE options will pop up. These will allow you to be able to total by project, total by use, and the FTE value.  You can run booked FTEs if using project assignments to manage your future assigned resources, or you could use assigned FTEs. There are several out-of-the-box values you can use for FTEs depending on your process.

The FTE options above limit your scheduling. So, what if you want to determine FTE on staff? You can achieve this by leveraging job codes and standard quantity fields. Simply type “quantity” in the job code details search bar and select Quantity on Staff.

So, now you’ve generated a detailed FTE report on staff, but how do you interpret it? How do you use it? Let’s say you’ve created a company summary report and included subtotal by job code and quantity of staff as a detail.

For discussion purposes, let’s say we have two project managers and 20 consultants on staff, and our FTE report shows what is booked. Let’s say that number is 5.6.  Now we can quickly see at our fingertips there is extra capacity. Obviously, this is a very simplistic example, but imagine if you have 100’s of consultants and also many different skill profiles for each project type. With this powerful capacity reporting, we can proactively look for solutions to get more projects, or if the data shows we are above our target capacity, we can start recruiting for the right resources, for example.

Using Hours for Capacity Reporting

An FTE report can sometimes be unreliable. This is because it’s based on the assumption that every employee is on a work schedule of eight hours a day, five days a week. This can be a problem, especially if you have part-time employees. This is where looking at your capacity by hours comes in.

Running a capacity report by hours allows you to look at each individual’s work schedule independently. This is useful because, in the OpenAir system, you can assign a work schedule for each individual, which will inform their expectations per hours per day.

OpenAir gives you two options for capacity reporting based on hours – Base Work Schedule Hours and Work Schedule Hours.

The first option assumes that everyone is on a work schedule of eight hours a day, five days a week. So, it will give you 40 hours a week without the consideration of holidays, time offs, schedule exceptions, or things like that.

The latter will consider and exclude holidays, off days, etc., from the work schedule. Therefore, we recommend Work Schedule Hour.

Eight hours a day, five days a week minus holidays, can get you to a good place. But it doesn’t get you all the way. Not every user is 100% billable. Usually, there’s a billable utilization target on which you base your budget.

Therefore, using the Target Utilization feature on OpenAir allows you to refine your capacity reporting even more. It accounts for administrative tasks or unproductive time. So when enabled, Base Target Hours and Target Hours become available.

Using Money as Value to Determine Capacity

Knowing your capacity based on hours is great. But it doesn’t offer insights into the financial capability to deliver based on available hours. This is where capacity reporting based on monetary value comes in.

Money as a value of capacity reporting combines two elements – capacity hours and bill rate expectation. You can set bill rate expectation as a target bill rate, either per user (cost levels) or a system-wide target. Your approach should be determined by skills or expertise, levels, as well as other factors.

Costs levels involve taking one of the costs from a user and repurposing it to store the bill rate. Doing so allows you to have those projected values at your fingertips at any time.  Alternatively, you can use some custom calculations to create target versions. You can do this by dividing all users’ target costs by their hours to create a target bill rate value.

Reporting Capacity by Product/Service

And lastly, you can look at the types of projects you deliver, either by offering or by service. If you embed your type of project or the product you’re selling at the project level, you can run reports by how many dollars you have in the backlog or how much has been sold by different project offerings or different services. This gives you insight into the types of projects you have in your pipeline or have had in the past. This can help you align with, “What kind of capacity by different types of resources am I going to need to accommodate this mix of services for my customers?” Also, you can bring it down to a project level and see the capacity and dollar amounts per project per type.

 Bottom Line

As you can see, OpenAir lets you plan capacity in multiple ways. You may use any of the approaches or combine some of them in your capacity planning. However, this will depend on what you’re trying to get. Nonetheless, having an all-round view of your capacity, in terms of money, hours, resources, FTE, and skills, is essential for effective services business operations.

Learn more in our recent capacity planning webinar, and sign up for more tips and updates.