The number is large and almost nobody calculates it
Ninety seconds of arithmetic reframes an investment debate from a cost comparison into a comparison against a value already established.
Power BI · Professional Services
The economics of one point of utilization
Before evaluating any system, do this calculation. It usually settles the investment question faster than a vendor business case.
Abstract
The economics of one point of utilization
Summary
Take your billable headcount. Multiply by standard annual hours. Take one per cent. Multiply by your blended rate. That number is what a single point of utilization is worth annually, and in most firms it exceeds the entire cost of the systems being debated.
This paper examines why firms rarely do that calculation, why the resulting number is usually distrusted, and what has to be true about definitions and capture before utilization can be used in an argument rather than reported and discounted.
Key findings
Four things this paper argues
If you read nothing else, read these. The analysis that follows sets out the evidence for each.
Utilization is distrusted because it is defined inconsistently
Different practices define billable, non-billable and available differently, so the firm-wide figure means nothing and is quietly discounted by everybody who reads it.
The definition conversation is the project
Fixing the model without fixing the definition produces a precise measurement of an approximation.
Capture quality bounds everything downstream
Time reconstructed on Friday is a guess. Utilization, realization, project margin and revenue recognition are all built on whether two minutes a day works.
Analysis
The argument in full
Why the calculation is not done
Partly because utilization is understood as an operational metric rather than a financial one, so it sits with operations rather than in the investment case.
Mostly because a number nobody trusts cannot be used in an argument. And utilization genuinely is untrustworthy in most firms: definitions vary by practice, time is recorded late and approximately, and non-billable work is categorised inconsistently. The figure is reported monthly and discounted by everybody who reads it.
The result is that a metric worth a great deal is excluded from exactly the decisions it should inform.
What has to be settled first
The denominator is the argument. Contracted hours, standard hours, or available hours net of leave — each produces a materially different number and each is defensible. What is not defensible is different practices using different denominators and comparing the results.
The activity classification matters almost as much. Billable, non-billable client work, business development, internal project, training and leave should sit in a hierarchy with defined parents, because a flat list will be classified inconsistently and new activity types will fall outside every measure.
Neither of these is a technology decision. Both are the least popular meeting in the engagement and the one that determines whether it succeeds.
- One definition of billable, non-billable and available, agreed across every practice
- One denominator, firm-wide, with no practice-specific exceptions
- Explicit treatment of business development, training and internal work
- An activity hierarchy with an Unclassified member that is surfaced rather than hidden
- The definition published alongside every report that uses the number
Then make the data worth reporting on
Time captured at the point of work rather than reconstructed on Friday. Two minutes a day, from Teams, Outlook or a phone.
This single dependency bounds everything downstream, and a firm that fixes the definition but not the capture has built a precise measurement of an approximation.
Power BI's role here is a governed semantic model where the definition lives once and every report inherits it, with row-level security so practice leaders see their own book without exports circulating, and drill-through from the firm-wide figure to the individual time entry. The 2026 direction — Copilot answering questions directly against the semantic model — raises the value of a well-defined model and the risk of a poorly defined one.
Framework
Something you can apply without us
Every paper in this series ends with a framework you can run internally. We would rather you used it and reached your own conclusion than took ours on trust.
Framework
Making utilization usable
Five steps, in order. The first is free and the second is the hard one.
1
Calculate
One point of utilization at your headcount and blended rate. Ninety seconds.
2
Define
One definition, one denominator, agreed across every practice and written down.
3
Capture
Time recorded at the point of work. Everything downstream depends on this.
4
Model
Definition held once in a governed semantic model, inherited by every report.
5
Publish
The definition alongside every report, with drill-through to the time entry.
Implications
What this means, depending on your seat
The same argument lands differently across an executive team. These are the three versions worth separating.
References
Where to check this for yourself
Microsoft's own documentation for the product behaviour described above. We would rather you verified the basis than accepted our summary of it.
01
Power BI semantic models
02
Row-level security with Power BI
03
Create date tables in Power BI Desktop
04
Copilot in Power BI
05
Dynamics 365 Project Operations
On these references: each entry names a Microsoft Learn article or documentation area by title, because deep links change while titles are stable. Searching the title on learn.microsoft.com will reach the current version. Where we have cited a figure or a product behaviour, it is Microsoft's statement rather than ours; where we have given a number of our own it is labelled as such in the text.
Recognise the situation?
We will run the calculation with your actual headcount and rates, and tell you honestly whether the gap is worth a project. Sometimes it is not.
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