Blog · Board and management reporting · Consulting and advisory
How a consulting firm reads two figures together per consultant, utilization, chargeable hours over available, and realization, fees billed over chargeable hours at standard rate, from time entries and bills: the four combinations and what each means, the consultants at ninety percent utilization on work billed at half rate, the practices where the two diverge, the fixed-fee engagements that consume the hours, and the identity that ties both figures to the firm's hours and fees.
A consulting firm reports utilization per consultant and celebrates the ones at ninety percent. Half of those hours are on fixed-fee engagements that have overrun, and the firm is paying for every one of them. Realization beside utilization, per consultant, says who is busy and who is profitable. This guide sets out both, the four combinations, the fixed-fee source, and the identity.
Per consultant, per period:
Utilization = chargeable hours ÷ available hours Realization = fees billed on their hours ÷ chargeable hours × standard rate
Per practice: the same, summed.
| Realization high | Realization low | |
|---|---|---|
| Utilization high | Busy and profitable | Busy and unprofitable: overruns, discounts |
| Utilization low | Underused, well billed | Underused and discounted |
Consultant identifiers only.
Σ consultants' chargeable hours = firm chargeable hours Σ engagements' fees billed = firm billed fees
Attainers' norm: utilization 72 percent, realization 88 percent.
| Consultant | Practice | Utilization | Realization | Quadrant | Cause |
|---|---|---|---|---|---|
| C-04 | Operations | 94% | 51% | Busy, unprofitable | Two fixed-fee engagements at 160% of budget |
| C-11 | Strategy | 76% | 92% | Busy, profitable | |
| C-17 | Operations | 58% | 95% | Underused, well billed | Bench time; sold work is profitable |
| C-22 | Digital | 61% | 62% | Underused, discounted | Discounted time-and-materials |
Consultant C-04 is the practice's most utilized person and the least profitable. Two fixed-fee engagements explain it, and the engagement view names them.
| Engagement | Fee type | Budget hours | Hours to date | Realization | Consultants |
|---|---|---|---|---|---|
| E-2207 | Fixed | 400 | 640 | 63% | C-04, C-09 |
| E-4471 | Fixed | 250 | 410 | 61% | C-04 |
The overruns are the finding. Utilization would have called them success.
| Practice | Utilization | Realization | Fixed-fee share of hours | Fixed-fee realization |
|---|---|---|---|---|
| Operations | 84% | 66% | 61% | 58% |
| Strategy | 71% | 90% | 20% | 84% |
Operations is the busiest practice and the least profitable, and its fixed-fee work is why.
Utilization as the measure. The overrun rewarded.
Realization at engagement level only. The consultant carrying it invisible.
Fixed fees excluded from realization. The biggest leak unmeasured.
Targets from a benchmark. The firm's own attainers are the norm.
Mapped once, the time entries, bills, engagement terms and roster produce utilization and realization per consultant, practice and engagement, the quadrant and the identities every month. Covirage builds this from the exports as they are. The professional services page describes the setup, and the sold work against bench guide covers the capacity side that utilization alone was standing in for.
Because a chargeable hour on an engagement that will not bill it is a cost, and utilization counts it as good. A consultant at ninety-five percent on an overrun fixed fee is fully utilized and losing the firm money every hour. Realization is what the hours turned into.
Fees billed on the engagement over the hours recorded at standard rate. An engagement priced at two hundred hours and delivered in three hundred realizes two thirds, whatever the invoice says. Per consultant, their share of the engagement's hours carries their share of its realization.
The firm's own attainers: utilization and realization among the consultants whose engagements were profitable over the year. Not a benchmark. The four-quadrant view against those two figures is the reading.