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Term Definition
“Bench time” is non-billable time.
Analysts and consultants use this term to refer to the time period when they are not working on a client-specific project or assignment, and as such not producing revenue. Technology consultants might offer their customers a subscription maintenance plan to optimize “bench time.” In this way, they are able to stabilize their cash flow and ride out the inevitable highs and lows of consulting.
Consultants might also use bench time to learn a new skill or programming language in order to broaden their scope of work and reduce future bench time. In project management, bench time occurs as a result of low margin projects, ineffective allocation and management of resources or unexpected delays. However, this can be more difficult to manage in large IT consulting firms. These firms may manage domestic and overseas clients and have a number of concurrent projects. If clients reduce their IT budget, then consultants may go on the bench once they have completed an assignment. In this case, bench time is not due to an ineffective allocation of resources but a change in financial allocation by the client.
In response to this, some companies utilize a modified Activities Based Costing model. In this business model, activities (rather than projects) are managed. Rather than having consultants move from one project to another the organization will slice their pipeline of projects into activities. For example, common project activities such as user interface development and communication networking are managed rather than the individual project. In this way people would be assigned to the activity, not the project, which helps to control costs and revenues.
In businesses where revenues are not dependent on product sales, such as legal, consulting and engineering, organizations strive for minimal bench time. In these organizations, time and expenses are carefully tracked and billed to clients. In order to be sustainable, resources must be maximally utilized on billable time and activities.
Area of Application
Project Management
Time Accounting
Time Management
Related Terms
Time and Billing
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