Key KPIs from Project Time Tracking Data
by Alexander Huber
Project time tracking is more than recording attendance. It provides valuable company KPIs, especially for IT service providers and other white‑collar teams. Executives, project leads, HR, and controllers can derive many KPIs from recorded project time to measure productivity, efficiency, and project profitability. This article explains which KPIs you can obtain from project time data and how they support steering the business. (Note: focus is on project time, not only attendance.)
Resource utilization
A central KPI for service companies is resource utilization, the share of working time employees spend productively on projects. A common metric is the share of project hours:
Project hours / total work time
for individuals or the whole team. It shows how much of available work time flows into project activities.
Equally important is billable utilization: which hours are billable to customers? The calculation is straightforward:
Billable utilization = (billable hours / total available hours) × 100
Example: Someone works 40 hours in a week and spends 30 hours on client projects. That equates to 75% billable utilization (Scoro). Benchmarks in consulting are often around four productive days per week. Five would be ideal, but administration and internal work reduce the available time (Consultport). In practice, 80% utilization is considered optimal in professional services (PSOhub). Values from about 75% are considered good, while significantly lower values indicate unused capacity. If utilization is near 100%, overwork and quality loss become risks. Balance matters (PSOhub).
This KPI is directly tied to revenue and efficiency. Example: 60% utilization signals that 40% of work time is not used on projects. There may be potential to improve processes or acquire additional work. Conversely, very high utilization over time may indicate a need to plan more staff to avoid overload.
Measuring productivity in IT services
Productivity in projects measures output per time spent. A common definition is output per unit of work time (Personio). A simple formula is:
Labor productivity = Output / work time
What counts as output depends on the work. In IT projects, it can be completed tickets, implemented features, delivered modules, or simply revenue. Example: a development team completes 50 features in 100 hours of work. Productivity is 0.5 features per hour. In support, 120 resolved tickets in 40 hours equals 3 tickets per hour. These numbers help assess how efficiently teams work and where optimization is needed (Personio). At company level, productivity‑adjacent KPIs such as revenue per employee (annual revenue / headcount) are used as rough indicators.
Important: Productivity KPIs need context. A single value says little about quality or sustainability (Personio). The simple formula does not consider costs or resources beyond time. Also, knowledge work is not always measurable in units. Fewer hours of high‑quality code can beat more hours of error‑prone code. Always combine productivity with other KPIs, for example quality, defect rates, or customer satisfaction. Nevertheless, time data provides necessary input to make team performance transparent and to identify trends.
Plan vs. actual: progress and deadlines
Project leads need to know whether a project is on schedule, both in time and effort. From time data, several KPIs help:
- On‑time delivery of milestones: share of planned milestones achieved on schedule. Also track overdue tasks. If 2 of 10 milestones are late, milestone punctuality is 80%. This shows whether phases finish on plan or delays occur.
- Percent complete: progress in percent measured against total planned hours or deliverables. If a work package has 100 planned hours and 50 hours are booked, percent complete can be estimated at 50% (assuming effort is proportional to time). Together with schedule adherence, this highlights whether you are behind.
- Effort variance (planned vs. actual): often called project overrun. A simple definition:
Project overrun = planned hours – actual hours
If the result is negative, more hours were spent than planned. If positive, you are under plan. Even without earned‑value management, you can track effort compliance per project. It is crucial to track variances and understand causes. Root causes include inaccurate estimates, additional customer requests, or inefficient work. Regular reviews reveal whether certain project types or teams systematically exceed plans and help you respond (better estimation methods, buffers).
In professional project controlling, earned value metrics are proven indicators. The Cost Performance Index and Schedule Performance Index are commonly used (Haufe). They relate earned value to cost or time elapsed. Values near 1 mean cost and schedule are on plan. Values below 1 indicate overruns. Even without a full EVMS, these efficiency KPIs help detect deviations early.
Plan vs. actual KPIs provide a base to actively steer projects. Leads see where corrective action is needed (for example, add resources if delayed). Controllers get a view of projects that regularly exceed budget or schedule.
Cost and profitability KPIs from time data
Besides time and performance, financial KPIs are essential. Project time is the base for allocating costs and analyzing profitability:
- Cost per project hour: calculate the average cost per project hour. An example:
Office hourly rate = total costs / project hours
It relates all personnel and overhead costs to productive time. If this rate falls, you set less cost per hour. Causes include cost reduction or higher utilization. If it rises, personnel cost or unproductive time could be the reason. For more detail, many companies use different standard cost rates per group (for example senior vs. junior).
- Share of billable hours: this shows what share of recorded hours was invoiced. A high share near 100% means most work flows into billable services. A low value indicates internal or unproductive effort. In research models of project controlling, KPIs such as share of billable project hours and time to collect receivables are often cited.
- Project profitability (margin): companies want to know how profitable each project is. Margin is often calculated as
(project revenue – project costs) / project revenue. You need cleanly recorded project hours valued with cost rates to know actual project costs. If this is missing, hidden inefficiencies arise. Example: a project yields €100,000 revenue but required 1,500 hours. If full cost per hour is €60, total cost is €90,000 and margin is 10%. Accurate time and cost tracking reveal and compare such numbers. In consulting, revenue per billable resource and revenue per employee are also tracked. - Budget consumption: monitor the share of budget used (hours or costs) relative to the planned budget per project. From time data, build cumulative actual costs and compare with budget. For example, 80% of the hours budget consumed while only 60% of the planned time elapsed is a warning signal. This often appears in status reports and complements earned value metrics.
Faster invoicing: use time data for cash flow and HR
Finally, consider how quickly recorded time turns into cash, relevant for controlling and HR (motivation). Time data enables timely invoicing. Ideally, recorded project hours are invoiced promptly. The time from delivery to invoice indicates internal efficiency and liquidity. Long pre‑financing burdens cash flow. Equally important is customer payment behavior: Days Sales Outstanding measures days from invoice to cash. Outstanding project revenue should be low and short. As a rule of thumb, investigate root causes from around 50 overdue days: customer fit, dunning, or general liquidity risk. Time data helps indirectly: transparent time billing enables faster and more regular invoicing, which reduces DSO. Controllers can monitor the average collection cycle and counter negative trends.
Time data also supports HR KPIs. Persistently high project hours per person may indicate overload. Overtime ratios and their trend complement classic HR metrics such as sick days. HR also watches how much time goes into training or internal projects versus client work to keep personnel development in view. These analyses enable strategic capacity planning: hire in time if team utilization is above, for example, 85% for an extended period, or create internal relief.
Conclusion: make success measurable with time tracking
A professional project time tracking system such as time cockpit provides the data foundation for many KPIs needed to steer projects and the company. From project efficiency (effort variance, earned value), team productivity (output per hour), and employee utilization to profitability (project margins, revenue per hour/employee), all these KPIs can be derived from well‑maintained time data. IT and consulting firms can objectively analyze where they stand and where optimization is possible. Choose KPIs carefully and observe them over time to spot real trends rather than isolated snapshots. When the right KPIs are measured continuously, executives and controllers can make informed decisions about pricing, resource planning, and process improvements. Leads keep progress and budget consumption in view, while HR sees whether the workload is healthy.
In short: use time data for KPIs to make your organization measurable and steerable. Transparency about recorded hours and results builds trust and enables management to evaluate project success and efficiency with data. Those who not only record time but also analyze it gain real competitive advantage because projects are more likely to finish on schedule, within budget, and profitably.