Use the Labor Utilization Tolerances settings to specify the actual-to-budget (or actual-to-target) variance percentages that trigger alerts in the Labor Utilization Analytics.
The alerts appear in the Direct Detailed Analysis table and Non-Direct Detailed Analysis table on the Labor Utilization tab in Costpoint Analytics – Employee. When an alert is triggered, the table cell that displays the variance percentage has either a yellow or red background, depending on the type of alert.
The tolerances for under-utilization also control alerts for the summary Labor Utilization Analytics in Costpoint Analytics – Summary. The alerts appear as background color in the bullet graphs and as colored borders around variance amounts in the tables.
The same tolerance settings apply to all of your companies and organizations. For example, you cannot specify one set of labor utilization tolerances for one of your companies and a different set of labor utilization tolerances for another company.
You set up two sets of alerts, one set triggered by over-utilization and one set triggered by under-utilization.
Each set includes the following alerts:
Cautionary alert — Enter the variance percentage that marks the threshold between acceptable and cautionary status. Variances with the cautionary status display with a yellow background.
Urgent alert — Enter the variance percentage that marks the threshold between cautionary and urgent status. Variances with the urgent status display with a red background.
You enter the following tolerances:
Urgent Alert When Above: 10.00
Cautionary Alert When Above: 5.00
Cautionary Alert When Below: 5.00
Urgent Alert When Below: 10.00
If the budget labor utilization rate is 80.00 and actual rate is 78.00, the under-utilization variance is 2.5 percent, an acceptable variance based on the tolerances. A 5% variance, exactly matching the cautionary alert threshold, is also acceptable.
However, with the same alert settings, if the actual rate is 74.00, a 7.5% variance, the Detailed Analysis tables on the Labor Utilization tab display that variance with a yellow background to indicate a cautionary status. If the actual revenue is 70.00, a 12.5% variance, the variance background is red to alert you to an urgent status.
The over-utilization alerts work the same way if utilization exceeds the budget rate.
As part of Costpoint Analytics implementation, determine the over- and under-utilization cautionary and urgent tolerances, and enter those percentages under Labor Utilization Tolerances.
Normally, you do not change the tolerances after the initial configuration. However, you can change them at any time if you determine that the current settings are not what you want.