Frank Patrick made an excellent point on the misconception of resource utilization on his blog a few days ago that I somehow missed! (Thanks, Frank, for pointing this out)
Im glad Im not the only one that sees organizations striving to over-allocate their resources! The worst part of this kind of overallocation is that it is disguised as perfect allocation. Applications like Microsoft Project ask you to define the threshold it will use to determine if a resource is "overallocated". In Project this is called the "Max Units" field. Then you assign resources at a given Units value and if Project sees that for any given time period the sum of the assignment units for a given resource is greater than their Max Units value that resource is seen as "overallocated". So the sticky part is where to set Max Units. 100% is the default out of the box and there are organizations that think that is a goal. It makes sense when you first think about it. "I want my resource to be fully allocated." Well sure. Who would not want that! But if you have someone assigned to even a single project (because you have recognized the evil that is multi-tasking) at 100% then they are not OVER allocated on paper. But they really are because NOBODY is available 100% of their X-hour work day. They answer email, go to meetings, get asked questions by coworkers and sometimes they even get up to go to the bathroom!
Most 'authorities' agree that the real amount of availability for a resource is somewhere between 65% and 80%. Im kind of in the middle of these two figures at about 70%. That gives a resource about 2.5 hours a day to "other things". This also acts as a buffer so that if a resource does have to push it and work more than that 70% they are not automatically in OT territory.
So if you are using Microsoft Project to manage your schedules/resource usage then make a note to examine the Max Units values for your resources. If they are at 100% you may want to rethink it to take these concepts into account.