Overhead calculation in Tempo Budgets

Question

How is the overhead calculated within Tempo Budgets?

Answer

Tempo Budgets is well known for its financial capabilities, but did you know that it is also a great tool to estimate deliverables and see the efficiency of the team(s) working on your Folio?

The Staff section of Tempo Budgets displays the overhead of the team assigned to the Folio; an overhead of 0% means that team members are working according to the plan and an overhead of 100% means that your team members are not working at all on the issues within the scope of your Folio.

In the example below, I will explain in detail how the overhead is calculated. We will focus on Robert Glass and examine some of his details. Robert is assigned to the Folio at 100% with a total estimated availability until the end of the Folio (Feb 10th 2019) of 1,184 hours. We also see that Robert already has logged 240h of hours on the issues within the scope of the Folio so far.

In order to calculate the overhead correctly, we will need to know the calendar progress of our Folio. We get this information from the Folio's overview page.

Tempo Budgets shows us that the calendar progress is already 72.3%. That means we can assume that Robert should have worked: 1,184h x 0.723 = 856h. As we stated earlier Robert has only logged 240h so far. In order to have an overhead of 0% Robert should have worked 856h instead of the 240h. The overhead can be calculated as: 100% - (240h / 856h x 100%) = 71.96%. Or the other way round: Robert has worked 28.04% according to schedule.

From the calculation we can see that Tempo Budgets gives you information on how efficient your staff is working according to the planned effort. But be careful: the overhead can never be below 0% and never above 100%. Of course, an overhead of 0% is great, but also means that you should check if your staff has logged too many hours on the issues within the scope of the Folio.

If your staff availability is also used for your estimated costs, you can identify under-allocated staff members as the actual costs will be greater than the planned costs. Similarly, an overhead of 100% will result in a far lower actual cost as planned. In these cases you should verify that everyone is accurately logging their time.