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Firm Capacity

  • 1.  Firm Capacity

    Posted 04-20-2018 09:59
    Good Morning Everyone!  I have been asked by one of our firm's most valuable clients to quantify our firm's capacity to provide services.  The client is ramping up a significant building project that will result in 2x-3x the amount of work we have consistently executed for the client in the past.  I am doing research to see if there are any industry accepted methodologies of estimating a firm's capacity to provide services.  But, so far, I have been unsuccessful.  Does anyone in the community have any resources they can point me toward that might could help?

    Methodologies I am currently looking at include estimation of capacity using total billable hours of our staff compared against the estimated fees associated with the upcoming projects on a yearly basis.  I am also looking at average yearly revenue of the firm over the last 3 years as compared to the estimated fees associated with the client's upcoming projects.  I think both of these metrics are logical; but, I would love an outside resource that I can present to the client that justifies my methodology as an industry accepted standard and not just my own.

    Thanks for your help!

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    David Donovan AIA
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  • 2.  RE: Firm Capacity

    Posted 04-23-2018 19:08

    I'm not sure I would feel so free with offering up information about billings and revenue.

    Maybe the billable hours, or "hours devoted to your projects in the last X years".  Help them understand that more than about 80% utilization is hard.

    I think that in a way they want to know if you have enough folks to do their work, and enough folks who are familiar with Their Projects.  I'd be frank about telling them that there would be a ramp-up process, reassigning some people from other jobs, and hiring of staff.  But, any one else that they would bring in would have an even longer learning curve.  Stress your understanding of their work and internal flexibility to shift workloads during the ramp-up time.

    Don't forget to tell them about how your consultants will be able to handle the influx of work.  If recruiting additional consulting power is part of the process, tell them how you go about finding appropriate consultants.

    Is this work expansion going to take you to states where you're not practicing now?  Tell them how the NCARB and state registration process works, and the range of time it may take you to start up there (including, as needed, details of corporate practice and having a designated representative in those other states).

    A long time ago - almost 20 years now - the firm of which I was a principal was approached by a major international clothing retailer which was planning a massive new store roll-out.  We used the same CADD software (how they got our name) and in the courtship phase we made a good impression.  In the space of about 2 years we did about 60 stores for them, around 25% of the total.  I became registered in 14 states (facilitated getting work assignments).  We started with about 3 of us, were at about 6 maximum, and then ... things slowed way down.  There will be challenges for you in keeping staff motivated, so whatever you can do to elevate people who already are familiar with the client's work will help make it clear that working on the XYZ account is not a dead-end situation.  Be sure that your co-owners understand the benefit of the cash flow from this client, and do everything that you can to make connections between your staff and their staff.  Everyone needs to think of themself as a marketer and understand that meeting deadlines and thinking ahead will enhance the ability to get more work.

    Best wishes.  It's a fun roller coaster to be on.



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    Joel Niemi AIA
    Joel Niemi Architect
    Snohomish, WA
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  • 3.  RE: Firm Capacity

    Posted 04-24-2018 17:50
    Some great advice! It's really none of their business how many people you have or what your annual revenue is. There are plenty of outsourcing opportunities that would not necessarily require full onboarding of staff, as well as the capital investments that would be required.

    My local networking group recently discussed "24-hour working" by utilizing overseas drafting services, but no one had a positive experience, except in the case when a former employee re-located overseas but remained a consultant/employee to the company and knew their processes.

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    Betsy Nickless, FSDA
    Mark Scheurer Architect, Inc.
    Newport Beach CA
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  • 4.  RE: Firm Capacity

    Posted 04-25-2018 23:18
    It is true, that not everybody would have had a positive experience with "outsourcing" done domestically or overseas. But there are many who have been able to utilize such resources. Success depends solely on communication.

    When you have an inhouse person, you just walk up to that person and give instructions. In the other model, you need to write down your instructions and once the email is sent, you have no way to go back and say "actually I did not mean this......".
    :-)

    Continuing this discussion, I have become aware of 4 probable models. Will watch out for more thoughts expressed here....


  • 5.  RE: Firm Capacity

    Posted 04-26-2018 13:38

    Yes, some great advice in this thread.  I do believe, however, that it absolutely a client's right to inquire about and be provided with information about a firm's resources and abilities to undertake an increased scope of work.  This might include size of the firm, number of people with specific expertise, a focused workplan about how the client's project will be staffed, how a firm will accommodate spikes in schedule or workload, additional resources available, etc.

    As architects, we have an obligation to take on work only if we reasonably believe that we can meet a client's requirements and expectations.  And client's have a responsibility to perform reasonable due diligence before engaging a design professional.  We should not shy away from providing information.  Rather, we should take this as an opportunity to discuss our capabilities and approach, as well as what we need from each client in order to deliver on their expectations.



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    Michael Strogoff, FAIA
    Chair Emeritus, PMKC Advisory Group
    President, Strogoff Consulting, Inc.
    Mill Valley, CA 94941
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  • 6.  RE: Firm Capacity

    Posted 04-24-2018 01:32
    You could probably expand you methodology, (for small/medium projects only, not for large project) (for medium sized firms) by probably considering these 2 metrics.

    Method 1: Count of "Tier 2 Leadership" Method (If your firm has separate teams for SD/DD and CD)
    Method 2 : Count of "Independent Team" Method (If your workflow has a single team for delivering the project)

    Note :
    1. At this end, we count the number of "Tier 2 Architect" that exist within the firm (Each T2 can handle can approx a strength of 15-20 architectural staff); Then we limit the Tier 2 team to have at max 3-4 "Tier 3" persons;
    2. Each Tier 3 efficiently handles a team o max 4 people;
    If I were to expand or plan to expand my own capacity (with a Short Time Outlook), I would look at:
    1. Collaboration with other smaller firms;
    2. Seek external Staffing help while maintaining Control over "Instruments of architectural services" by inhouse "Tier 3" staff;

    I have realized that I need to evolve new workflows every couple of years, because of variable work load. Hope this helps.


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    Rohit Jain
    Founder Partner
    rohit@rsms-arch.com
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