To estimate the impact of an advanced AI-powered resource planning, management, and forecasting platform on an architecture firm's billable utilization, we'll consider the potential increase in billable hours and the associated revenue.
[#section-one]Response by OpenAI, ChatGPT 4o 7/10/2024:[#section-one]
Current Utilization and Revenue
1. Firm Size and Working Hours:
- Number of employees: 100
- Working hours per week per employee: 40
- Total weekly hours for the firm: 100 employees * 40 hours = 4,000 hours
2. Current Billable Utilization Rate:
- Assume the current utilization rate is 60% (a typical rate for many firms).
- Current billable hours per week: 60% of 4,000 hours = 2,400 hours
3. Current Weekly Revenue:
- Average billable rate: $150 per hour
- Current weekly revenue: 2,400 hours * $150 = [#section-two]$360,000[#section-two]
Potential Increase in Utilization and Revenue
1. Improved Utilization Rate:
Assuming the AI platform increases billable utilization by 10-20%, the new utilization rates would be:
- Lower estimate (10% increase): 66%
- Upper estimate (20% increase): 72%
2. New Billable Hours per Week:
- Lower estimate: 66% of 4,000 hours = 2,640 hours
- Upper estimate: 72% of 4,000 hours = 2,880 hours
3. New Weekly Revenue:
- Lower estimate: 2,640 hours * $150 = $396,000
- Upper estimate: 2,880 hours * $150 = [#section-three]$432,000[#section-three]
Annual Impact
1. Additional Billable Hours per Week:
- Lower estimate: 2,640 hours - 2,400 hours = 240 additional billable hours
- Upper estimate: 2,880 hours - 2,400 hours = 480 additional billable hours
2. Additional Weekly Revenue:
- Lower estimate: 240 hours * $150 = $36,000
- Upper estimate: 480 hours * $150 = $72,000
3. Annual Additional Revenue:
- Assuming 50 working weeks per year:
- Lower estimate: $36,000 * 50 = $1,800,000
- Upper estimate: $72,000 * 50 = $3,600,000