Productivity, Utilisation and Capacity are often used interchangeably however they are subtly different:
Productivity is Output/Input and is always a number less than 1. A team member may complete 30 hours of customer work in a 40 hour week making them 75% productive.
Utilisation is Actual Output/Expected Output and can be a number greater than 1. It describes our expectation vs reality.
Capacity is a future measure that describes our expected utilisation of a person. Although it can be greater than one (when we overbook people) we typically plan for a number less than one.
A team member may complete 40 hours of customer work in a week in a total of 50 hours. Their productivity is 40/50 being 80%. We can say they spent 80% of their time on customer work in that period. Actual capacity is equal to productivity.
Capacity is a future measure that describes our expected utilisation of a person. Although it can be greater than one (when we overbook people) we typically plan for a number less than one.
A team member may complete 40 hours of customer work in a week in a total of 50 hours. Their productivity is 40/50 being 80%. We can say they spent 80% of their time on customer work in that period. Actual capacity is equal to productivity.
From the same team member we may expect 40 hours of total work at a 75% capacity. We have an expected output of 30 hours of customer work (40 hours x 75%). If they actually work 50 hours and complete 40 hours of customer work (as above) their utilisation is 40/40 being 100%. Their productivity remains at 80%.
Although a person can be highly utilised, they can still achieve this with a low productivity ie working long vs being focussed.
This is different again to Effectiveness which we will cover in a later article.
Let's look now at an example with leave:
Moana Maniapoto:
75% expected productivity
40 hour expected total hours
= 30 hour expected customer hours
Actual customer hours = 32
Actual internal hours = 10
Actual leave = 8
Actual total hours = 50
Productivity = 32 / (50-8) = 76%
Utilisation = 32 / (50-8)*0.75 = 101%
As you can see in the example above, leave is excluded from both the productivity and utilisation calculations. When we go on leave, our output decreases but our productivity and utilisation does not. The team member above worked longer hours than expected but achieved their productivity and utilisation expectations.
Confusingly, XPM has a report called the 'Productivity report' which doesn't measure productivity but utilisation. It uses the inputs from the Capacity section under Business>Settings>Capacity Planning to calculate expectations and compares actual timesheets and billable statuses with that expectation to arrive at a capacity. This number can be greater than 1.
Link Reporting does not measure utilisation at the moment as this is measured by XPM. Link Reporting measures productivity. Changing the capacity expectations in XPM will not affect Link Reporting. It will change the utilisation shown in XPM for all future and past reports however.
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