Analyzing Historical Time Tracking Data When Making Business Decisions
The Intervals team is headquartered in Santa Barbara, California, a small city with an unusually large tech presence. It’s hard to walk a few blocks without running into someone we’ve worked with in the past, be it a tech partner, mentor, or a web site design and development client.
I recently bumped into a past client while grabbing and iced tea at the local CBTL. We were talking about the good old days of web design and development circa 2004, when he stopped to ask, “how many hours do you think you’ve put into our web site over the years?” It was a rhetorical question, but I answered it in all seriousness. “I can look that up and tell you if you’d like?” I responded.
Later in the day, I did look it up. The answer is 876.025 hours, to be exact. While meant to be more an introspective exercise, this recent experience does bring up some interesting questions. Most importantly, what can be learned from analyzing 10 years worth of time tracking data?
The time tracking trends report from Intervals, showing the amount of time spent on this client since 2004.
The last two or three years of time tracking data are quite useful. We can use the data to accurately estimate web design and development projects, by comparing client needs to similar projects we’ve managed and tracked in the past. But data from five to ten years ago? Is it useful data?
I can think of several questions (I am positive there are more) we can answer with this trove of historical time tracking data. Thankfully, we have this time tracking data in the first place, so that our agency can interpret it and identify useful trends. Two questions that immediately come to mind…
How much residual income have we made?
If you can maintain a profitable working relationship with a client, your agency will have less cash flow issues. Our historical time tracking data shows us that long-term client relationships result in steady and consistent revenue, with one or two big projects thrown in. These are the best type of client an agency can have, hands down.
How has our agency evolved?
When we first started Pelago as a web design and development agency, we were certain we’d be focusing on front end web design and development, the visual bits. We ended up going in a completely different direction and became experts in back end development. Our historical time tracking data shows this transition quite well, as we can see that our design hours are more prominent in the beginning, but quickly give way to several hourly rates related to databases, server-side scripting, and system administration.
Whether or not you are billing your clients based on hourly work, it’s important to track your time so you can make educated and informed business decisions. It’s hard to argue with data, and the more of it you have, the less emotion will taint your decision making process.
Photo credit: tkksummers
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