Ravindra BagaleCourses & study guides मराठी Track your progress

36. KPI in All Industries

36.19 IT Services

By Last updated:

Project interviews ask utilisation (billable hours divided by available hours), project margin, and SLA on tickets. Hours logged, and tickets closed, are how a loss-making support project looks busy. Projects below are fictional.

KPI What the number means Who uses it Action it drives
Utilisation Billable hours divided by available hours. Delivery manager Low utilisation is a staffing or a contract problem. It is not "the team worked hard".
Margin % (Revenue minus cost) divided by revenue. Project manager, finance A negative margin stops hiring onto that project.
SLA met % Tickets closed inside the promise divided by tickets. Support lead A high ticket count with a low SLA is a queue, not productivity.

Fictional sample rows. One month.

Project City Available hrs Billable hrs Revenue Cost Tickets Met SLA
Pune app Pune 400 300 ₹6,00,000 ₹4,00,000 40 36
Nashik support Nashik 400 200 ₹2,50,000 ₹2,20,000 80 70
Kolhapur app Kolhapur 200 160 ₹3,20,000 ₹2,00,000 20 18
Nagpur support Nagpur 300 120 ₹1,50,000 ₹1,60,000 50 30
Mumbai app Mumbai 160 128 ₹2,56,000 ₹1,60,000 16 15
Sambhaji support Sambhaji Nagar 240 96 ₹1,20,000 ₹1,40,000 40 20

Worked from those rows.

  • Available 1,700. Billable 1,004. Revenue ₹16,96,000. Cost ₹12,80,000. Tickets 246. Met SLA 189.
  • Utilisation is 1,004 ÷ 1,700 = 59.1%.
  • Margin is (16,96,000 − 12,80,000) ÷ 16,96,000 = 4,16,000 ÷ 16,96,000 = 24.5%.
  • SLA met is 189 ÷ 246 = 76.8%.

Pune app: utilisation 300 ÷ 400 = 75.0%, margin (6,00,000 − 4,00,000) ÷ 6,00,000 = 33.3%, SLA 36 ÷ 40 = 90.0%. Nashik support: utilisation 200 ÷ 400 = 50.0%, margin (2,50,000 − 2,20,000) ÷ 2,50,000 = 12.0%, tickets 80, SLA 70 ÷ 80 = 87.5%. Nagpur support: margin (1,50,000 − 1,60,000) ÷ 1,50,000 = −6.7%, SLA 30 ÷ 50 = 60.0%.

Good KPI Vanity metric
From the same rows Nashik utilisation 50.0% and margin 12.0%; Nagpur margin −6.7% Nashik 80 tickets closed
Why Half of Nashik's hours were not billed. Nagpur cost more than it earned. The ticket card makes Nashik the busiest project. Busy is not billed, and it is not profitable.

What the manager does. The Pune delivery manager leaves the app team alone this week (75% utilised, 33% margin, 90% SLA). The Nashik manager either gets a change request for the 200 unbilled hours or stops staffing 400 hours for 200 billable. The Nagpur manager does not add a person to a project that lost ₹10,000 in this file. Sambhaji support is the same loss: revenue ₹1,20,000, cost ₹1,40,000, margin −16.7%, SLA 20 ÷ 40 = 50.0%.

Ravindra Bagale's Tip

A common mistake in utilisation is using "logged in" hours instead of available hours. Available means the hours the company provides. Billable means the client paid for them. The two are different. Write it in the title. Remember this rule.