Episode Transcript
[00:00:01] Speaker A: Hello.
[00:00:02] Speaker B: Thank you for joining us. Welcome to what Counts, the podcast where we dive deep into the world of information governance.
Here we highlight proven solutions developed through our experience working with companies across various industries, and we talk about how you can apply these solutions to your company.
Whether you're interested in information governance, have a need, or just curious to hear about information management challenges like email management, retention management, or asset data management, this podcast is for you. This is Lee, and in this episode, Maura and I will talk about some of the things that are worth tracking in your business.
Maura, like I said, I'm just going to leave that open.
What would you track? What would you want to track in business?
[00:00:44] Speaker A: Well, so this is, this is kind of a, I mean, that, the way you ask that question, I could track any number of things.
[00:00:53] Speaker B: Why does tracking matter?
[00:00:54] Speaker A: Yeah, who cares what you've got?
But we're on a path here of talking about kind of back office functions for a business and how do you make the business run as opposed to the interactions with clients and customers, which is a whole other and truly fascinating part of our business.
But the back end side. Okay, so we've been talking about accounting, we've been talking about money, like how we're in, we're in this business for money, not just for fun.
So we want to have fun too, but we're here to make money because otherwise we'd have to have another job.
So tracking. We ended up our last episode talking about how much does it cost to deliver your product? Whether your product is something tangible, a cupcake, a house, or, or is it a service where you are.
For us, we're talking about, we're delivering information governance consulting services to our clients. But you could also have services like home repair or solar panel installation or chimney cleaning.
And each one of those things that you deliver, you're paying something to be able to create it and deliver it. So let's start with us. We know our, we know our own business the best. And in our case, when you're delivering consulting services, the primary kind of the most granular unit of the thing we're delivering is an hour of time.
It's an hour of our time, it's an hour of our employees time.
And we have to pay for that somehow. We have to pay in terms of salary or an hourly rate and whatever benefits or other expenses go along with the delivery of that person to the client and the, the knowledge being transferred.
So how we track that is timesheets and expense reports if we're traveling. But let's Talk about timesheets.
And we ask our employees and ourselves to track time to the quarter hour.
And we, we provide from the chart of accounts a number or a name or some other identifier for each client project. And in some cases, the clients want us to go deeper than that and not just say, I'm working for this toy company, but I'm working on this toy, or I'm working on a strategic plan. And they want to know exactly what we're spending our time on because they're accounting for it out of different budgets on their end as well.
So we had, we have instituted a total time charging policy where we account for all the time that we spend on clients client projects to the quarter hour so that we are able to calculate two things. One, depending on the type of contract we have with the client, that may be the basis of the bill.
So Lee spent 47 hours last month on the first client and 32 on the second client. And we're going to bill for exactly 47 hours at a, an agreed bill rate to that client.
Some of our contracts are not paid by the hour by our clients. We agree that we're going to deliver a certain amount of work, a certain set of deliverables for a fixed fee.
And in that case, the client doesn't care how many hours we spend. The risk is on us to manage our time and not spend more hours than we're going to be paid for in that fixed fee. So then we want to know how many hours are we spending? Because we want to know are we making any money or not? Or have we completely over committed to something and we can't get out of it and we're going to have to spend all our time on this and we're only going to get paid for the amount that we agreed. So the time charging policy is really useful to us and useful to the clients in the immediate term. I think it's even more useful as we plan new projects because we can go back and say, okay, how much did it cost us to do that retention schedule for that client that was in six states and they had one line of business versus how much did it cost us to do a retention schedule for that other client that was actually in five countries and they had 15 different, very different lines of business? And we had to do a lot more research on the retention schedule. And the timesheets are one of the key ways that we know how much effort we had to put into a certain project so that we can provide a proposal to the next client.
Based on the similarities between previous clients and the time that it took us.
[00:06:00] Speaker B: Yeah. Two things I want to add, and you're really talking about this one that I just want to emphasize a little bit more. And that's resource allocation.
So you have a group of people, group of employees, and you have their time filling out their timesheets according to what clients and what projects they're working on and so forth. And you're able to then see, okay, this person is 50% billable, this person is 70%. You know, this person's only 30%. So we need to be able to allocate those resources if necessary, or have give more work to some. Somebody.
[00:06:35] Speaker A: No, that's before you go on to your next thing. That's a good point because I was talking one client at a time, one project at a time. You're talking about how do we manage the team and make sure that all our costs are covered and that we have sufficient resources to cover all our projects.
[00:06:54] Speaker B: Right. So more intense tracking.
The other piece of it is. And I threw out some percentages, right? I thought 30%, 70% and 50% or whatever case may be.
The rest of that time is administrative time. That means you're paying for it. The company you are paying, it's coming out of your owner's pocket for them to be 50% billable because the client's only paying for 50% of their work. The other 50% is coming out of your pocket. So that's a key, key tracking mechanism that you really need to know about.
[00:07:31] Speaker A: Right. And. And what do we do with that information? We can do. We can do a couple things. We can say, okay, we actually need this person to be available to us 50% of the time because we have something, an internal project for them to work on. Maybe it's developing a new service offering, working on the website, working on filling.
[00:07:52] Speaker B: Out, doing the book.
[00:07:53] Speaker A: Doing the books. Exactly that. Actually, they do some administrative tasks. So that's why of their time is not covered by clients.
That's really important. The other thing that's important is, oh, we've got three people here who are only 50% billable.
Are we overstaffed? Have we got projects that we're waiting for that we know are coming and it's okay that they're on, that they're under billable, underutilized for a month? It might be okay for a month. It's probably not okay for more than a month, because if we don't have any internal projects for them to work on and we don't have any external projects coming, then we're just eating that cost and they're just hanging out.
[00:08:38] Speaker B: Can only last so long. And that's a service company. Yeah.
[00:08:41] Speaker A: As a, as a consultant, you don't want that situation in professional services. You want to everybody to be close to 100 billable, close to 100 utilized. And not just this month, but for six to 12 months. You want to know what's out there.
And that is true whether you're a small business, small consulting firm or a gigantic consulting firm. A six month horizon is relatively easy to see. And to work with more than that is hard.
And it's critical that you know what's coming.
[00:09:20] Speaker B: Yeah.
[00:09:21] Speaker A: So.
[00:09:21] Speaker B: And there's tools to do this as well. Right. You don't have to do it.
Manual timesheets. Although I'm sure more remembers manual timesheets because I do.
[00:09:32] Speaker A: I mean we were only one step removed from manual timesheets right now in a, you know, sort of structured spreadsheet kind of timesheet as opposed to a system. But in our, in previous lives when we had bigger companies, we did have, that we worked for, we did have systems that tracked all the time. And one of the nice things about that was you could assign people to certain projects in the system and they couldn't accidentally build to the wrong thing and they couldn't build to a project that was closed, that we'd already spent all, you know, the budget was done and we were on a, you know, we couldn't, we were finished. We couldn't build that client anymore. The system can help you enforce those rules. When you are using a spreadsheet or literally a piece of paper, which is where the world started for us, there were no rules. You had to count on people to do things right and then you had to carefully check what they gave you and make the adjustments before the client got a wrong bill.
[00:10:34] Speaker B: And now I'm sure there's a mobile app for it as well.
[00:10:36] Speaker A: I'm confident that there is.
Um, so. But that's all about the people side, the, the time and because that's not just being able to pay people correctly, but also being able to build a client. If you are a sort of a hybrid service company where there are tools or parts, like a service technician, then you have the inventory side where you have to track that you have the right tools and parts and that you assign them to the service technician depending on the job that they're going on.
So locksmith. Recently I needed a locksmith twice, actually the same locksmith for the same doorknob. And the first locksmith who came from the same company informed me that I needed a new doorknob, but did not offer to sell me one.
The second time, which I was surprised about, but okay, the second time that I called them, I said, please have them bring me a new doorknob because otherwise I am going to have to do this again.
And that time the dispatcher said, oh, they always have doorknobs on the truck. But so I don't know what happened the first time. Perhaps I was an emergency call and they'd already been on six calls and they'd run out of their day's supply of doorknobs.
So I had to have two call outs to get the doorknob replaced.
So it's a very simple example, but it's inventory management over and over.
[00:12:05] Speaker B: Yes, right, yeah, absolutely. But inventory management is key.
[00:12:10] Speaker A: Yes. How many doorknobs should be on the truck.
[00:12:12] Speaker B: There's all kinds of philosophies around that that we're not going to get into in terms of just in time or first in, last out and so forth.
[00:12:20] Speaker A: Right. Because if you have things like batteries and they're sitting in a storage closet or a storage shed, batteries don't last forever if they're not used. If you have motors, they have like, if you're talking about a bigger company that has big motors for something, the motor actually has to be exercised and the oil has to be changed in the motor while it's sitting in the storage shed waiting to be used. So you're spending a lot of time maintaining your extra part, which you might need to do if you are an airport and you can have downtime, or if you are a pipeline company and you need to keep the pipes flowing, you need to have enough parts and you need to keep them well maintained. But there's an, there's a cost to that.
So the, the benefit of all the tracking is understanding what your costs are and what's the right level. And you can look back at tracking work orders and tracking call outs. So maybe that day with my, my doorknob problem, I was the sixth call. I have no idea, but I was the sixth call. And they had calculated over the previous nine months, they never got to more than four. So they gave the guy five doorknobs, thinking that would be enough, and number six was out of luck.
So.
[00:13:41] Speaker B: Well, I will say barcodes are an amazing thing though, right. When it comes to grocery stores and whatnot, Terms of keeping track of your.
[00:13:49] Speaker A: Inventory, keeping Track of the inventory in and out. Absolutely. And knowing where, how that, how the levels are dropping.
But those are the granular pieces, just like the hours of time that you are selling in the, in the services place. You have the, the raw, the raw materials could be raw materials back to Lee's flour and sugar example, or it could be a finished part that you have to take with you so that you can, you know, replace the doorbell, replace the door knob, replace some outdoor light that has a special light bulb that you don't have internal that most people don't have in their homes or their offices.
So understanding your business, which all of you do, that's why you started your business, think about what are those granular pieces that are critical for your delivery of product or service?
How much do you need on hand? How much does it cost to get them? How long does it take to get them? Because that just in time question varies if supply chains are a problem. If you think you can get it in a week, but actually now it's suddenly taking six, that's a huge problem.
[00:15:03] Speaker B: If you're relying on customer satisfaction and you're taking too long, that's a problem.
[00:15:10] Speaker A: That's a problem.
So understanding what those granular parts are and what's the best way to track them, you might need. Barcodes are incredibly helpful. If you have a really big warehouse, you might want to think about RFIDs so you don't have to look at everything.
If it's people, you're going to have to depend on them to tell you what they're doing. But if it's drivers, you can have other mechanisms where the truck is, you know, the truck gets tracked through GPS or you're tracking easy pass or you know, toll automated tol.
You can have call out work order applications do a lot of okay, we're in point A, you have, you're going to drive however long to get to point B and the system calculates how long it should take and you have to check in when you leave and check in when you arrive. And the job should take X number of minutes and you check in when you finish and then you check in where you're driving to the next thing. And tracking that and combining it with the GPS gives you a lot of insight into what your employees are doing and how well it's going. It also may make them, you know, anxious to know that you're watching every move.
So you gotta balance what, what are the things you want to track? What's the best way to track it? Where is the possibility that you're gonna lose money one way or another. Either you're gonna lose money because you don't have the part and you can't deliver, you don't have the person, they can't get the work done, or you're going to lose money because you're spending too much money on extra parts and extra people just sitting around.
[00:16:44] Speaker B: Yeah. I'm just going to throw this in there. There's some rules and regulations you can and can't do when it comes to tracking employees. So you should be, you should consult your HR attorney for that, especially if.
[00:16:57] Speaker A: You'Re a good friend. The lawyer.
[00:16:59] Speaker B: Yes, especially if you're unionized. There may be some regulations there that you have to follow as well.
[00:17:05] Speaker A: Yeah. The bigger the company, the, the more availability you have for tracking and the more rules there are around it.
So. Good. That is a good caveat, Lee. Definitely. We're not, we're not, we are not advocating, you know, inserting chips into people and tracking them, but understanding the moving parts of your business and figuring out how you can have that visibility into. Okay. We're, we're in a good place in terms of. It's not costing us more to deliver the service, the goods or the services than we're going to make on the goods or the services.
[00:17:44] Speaker B: Right.
[00:17:45] Speaker A: That's the, that's the goal.
[00:17:48] Speaker B: Okay. If you have any questions, please send us an email at info trailblazer.us.com or look us up on the website web at www.trailblazer.us.com. thank you for listening and please tune into our next episode. Also, if you like this episode, please be a champion and share it with people in your social media network. As always, we appreciate you, the listeners. Special thanks goes to. Jason Blake created our music.
[00:18:13] Speaker A: Thanks, everyone. Happy tracking.
