PCRE. Capacity is the constraint.
4 areas decide whether an agency makes money. Check them together each period, and hire or reprice before chasing more work.
Pipeline
Qualified opportunities against the next 2 quarters of capacity.
Example · Cover 1.4× · Last 1.1×Capacity
Billable hours available against hours already sold.
Example · 94% sold · Last 86%Revenue
Recognised revenue against plan, and how much of it is recurring.
Example · 97% of plan · 58% recurringEfficiency
Delivered hours against sold hours. Where the margin leaks.
Example · 1.06× delivered · Last 1.12×The 4 parts.
Pipeline
Count only qualified opportunities, then compare them with the hours you can actually deliver over the next 2 quarters. A full pipeline against no capacity is a problem, not a win.
Capacity
The constraint most agencies miss. When sold hours approach available hours, more pipeline makes things worse. Hire or reprice first.
Revenue
Recognised revenue, not billed or booked. Track the recurring share alongside it, because that is what makes the next period predictable.
Efficiency
Every hour delivered beyond what was sold comes straight out of margin. This is where scope creep shows up first.
How to use it.
Pull 4 numbers for the period: qualified pipeline, sold and available hours, recognised revenue, delivered hours.
Set a status for each part, with its word, and compare it with last period.
Act on the weakest part first. If Capacity is constrained, hire or reprice before chasing more work.