For one thing, both often cause attrition. Employees leave either because they are stressed for long stretches, or don;t have enough work. But the real problems can be even deeper.
Low utilization can mean: – Lack of proper management oversight, leading team members to be relatively slack in terms of work
- Inadequate inputs from client, causing the team to be less productive
- Tendency to have a slow start on fixed cost projects, creating future pressure to meet deadlines
- In T&M projects, assuming that low productivity does not matter, since revenue is assured
All of these mean a significant (and often hidden) hit to revenue and/or profitability.
Overloaded teams also reflect serious under-estimation of effort, poor management (tendency to push team too hard), unreasonable client pressure (on T&M contracts), other operational issues. These can help improve profitability on future projects by making effort calculations more accurate, or being able to negotiate higher headcount on T&M deals.
With Sapience, you can improve governance significantly, head off potential problems, and boost revenue and profit.