# Capacity as Professional Services KPIDefinition, Calculation, Example

Why is capacity an important metric? How is capacity calculated and measured?

## Capacity definition

Capacity is the maximum possible output of a company, usually in numbers of hours.

## Why capacity is important metric

Capacity shows the amount of work an organization can do. Capacity planning is an important activity to be sure that an agency has the right amount of resources for current and future projects.

## How to calculate capacity

The capacity calculation is a summary of all consultants' available time. Some consultants work part time, and the calculation takes this into account:
$$Capacity\; =\; \underset { number }{ Consultants } \; ×\; \underset { per\; consultant\; in\; hours }{ Availability }$$

## Capacity calculation example

There are 5 full-time (40 hours per week) billable employees in an agency and 3 part-time (20 hours per week) consultants. The 4-weeks capacity of the agency is 1,040 hours.
$$Capacity\; =\; 4\; ×\; (5\; ×\; 40\; +\; 3\; ×\; 20)\; =\; 1,040$$

## How to measure capacity

The Project Management Office (PMO) uses a resource scheduling tool like Float to monitor the load and availability of employees, plan projects, and allocate resources.

Questions to answer with capacity measurement:
• What is the working capacity and workload throughout the year?
• How do we grow?
• Which help might we need in future to deliver a project?

Metric.ai can use data from resource scheduling services to show the current and planned capacity together with total tracked hours with segmentation by the office, department, and role.