Labor is the largest investment made by a professional services company. There are two important quality measures: accuracy and timeliness. Accurate time reporting leads to higher project profits and resource utilization, as well as greater customer satisfaction.
The benefits of accuracy are:
- Better knowledge of project profitability and resource utilization
- Better process improvements through better knowledge of actual effort
- Correct payment of hourly workers
- Correct billing of clients
The benefits of timeliness are:
- Quicker feedback of work done into the planning process
- Faster billing (reduced DSO)
- More accurate time reporting
To improve accuracy and timeliness, measure DIRT.
The last timeliness point is very important. We don’t have a practical way to directly measure the accuracy of time reporting. But we do know that the longer a person waits between observing and recording something, the less accurate the recording will be. So we can use timeliness as an indirect way of measuring accuracy.
Projector’s timeliness metric is DIRT: Delay in Reporting Time. The less DIRT the better. DIRT is the average number of days between the date work is done and the date the associated time is submitted. Please note that, in the examples that follow, we are measuring DIRT based on billable time. The reason is that billable time is much more important, in general, than non-billable time.
Here’s the DIRT Monday for one Projector customer, Masters of Consulting, for a one-year period. It is slightly different than DIRT in that it measures the average number of days between the date time is required to be submitted (the following Monday) and the time it was actually submitted.
This customer’s DIRT Monday looks pretty small and is improving, which is good. In the past four months, almost all time was submitted no later than the due date. But using a weekly metric hides what is really happening. Since Projector allows time to be submitted for approval immediately after it is recorded (which is not common in the world of professional services automation software), we can measure the true DIRT. Here’s the DIRT compared to DIRT Monday.
Not only is the actual delay much greater, but it is getting worse, not better. So the wrong data (DIRT Monday) lead to the wrong conclusion (time reporting was getting better).
Even though time reporting is getting worse, Masters of Consulting performance every month is better than the typical (median) performance of all Projector users, which is a DIRT rating of about 5.
Measure Your DIRT
Ask people to submit time for approval just after working that time and measure DIRT. Make sure that DIRT is measured based on when the time last changed (which is the submitted time in Projector), and that it is measured on a daily, not weekly, basis.
Measure Your DIRT in Projector
The Ginsu report has a field named DIRT (it is one of the fields in the Time Quality category). You can report on DIRT by resource, project, cost center, department, title, and any of the many other attributes of projects and resources. You can also include it in analytics dashboards, including on the personal dashboard that employees see when they log in to Projector. We suspect that many organizations will want to limit the measurement of DIRT to billable time.
Prematurely Entered Time
A person might enter time in advance of working that time. Some people do this when reporting time, such as vacation time, when the time is likely to be accurate when reported in advance. This is called prematurely entered time. Projector assumes that most people don’t have access to working crystal balls, so it considers prematurely entered time to be a source of time reporting inaccuracy. Some customers might even consider prematurely entered billable hours to be fraudulent. In Projector, it is reported both as a number of hours (Premature Hours) and as a percentage of the total time reported (Premature Hours %). As with DIRT, we suspect that many organizations will want to limit the measurement of prematurely entered time to billable time.
Note that Projector compares the date on which a time card is created, not submitted, with the date worked to determine if the hours are premature. Unfortunately, it is possible for people to enter time before the time is worked, if the time is entered earlier on the same day. There is no practical way to control that in Projector because Projector doesn’t require the recording of the time of day at which the work was performed.