Overview

LINQ provides an automated approach to calculating and allocating costs and emissions across an organisation's infrastructure, systems, roles, people and actions. The methodology ensures that costs are assigned based on actual work effort and time allocation, allowing businesses to make data-driven decisions.


This section explains:

✅ How action hours are calculated

✅ How capacity is calculated and used

✅ How action hours are allocated to roles, systems, people, and infrastructure

✅ How percentage modelled affects capacity and costs


LINQ Language Structure

Let’s recap how the LINQ model is structured to support cost and capacity allocation. LINQ models people, roles, systems, infrastructure, actions and information. Within a model these are called nodes and the relationships between them edges.

  • People or teams fulfil roles: John fulfils Accounts management, and the accounting team fulfils Accounts management and Customer support.
  • Infrastructure support systems: Laptops support Excel and Word.
  • Roles use systems to perform actions. Accounts management uses Excel to Enter sales data and Customer support uses Word to Create customer letter.
 

These relationships are used to allocate time, capacity, costs and carbon to each node.  For more detailed guidance of LINQ language structure, see the Node Description and Usage section. 



1. Calculating action hours

When modeling and quantifying a process in LINQ, you enter the duration and frequency for each action node. These inputs define how long an action takes (duration) and how often it occurs (frequency). LINQ uses this information to calculate total action hours, which are then used to distribute time and costs across roles, systems, and infrastructure. 


LINQ defines these key inputs as:

  • Duration – The time required to complete a single instance of an action. 
  • Frequency – How often the action occurs within a given timeframe (e.g., daily, weekly, annually). 


LINQ automatically calculates total action hours based on these values. 

 

By multiplying duration by frequency, LINQ calculates total action hours for each activity. 

Action Hours= Frequency × Duration


These hours are then summed across all modeled actions, forming the basis for distributing time, costs, and emissions across roles, systems, and infrastructure. 


Note: The frequency (or number of times an action occurs) may be inherited based on the number of information items coming into the action. Please refer to the help on quantifying a model for details.


2. Calculate capacity

In LINQ, capacity represents the total time that people can do work, and hence time available to roles.


Accurately defining capacity ensures:

✅ Accurate cost allocation 
✅ Workload understanding, guiding better skills and staff management


Each person/teams capacity is calculated based on the duration and frequency entered for that person. If it is a team, this is multiplied by the number of people in the team to get a total capacity. The same is done for each role that is not attached to people (the role defines its own capacity).

Modelled capacity is calculated by multiplying the percentage modelled by the total capacity. As more of the role or person's time is modelled the percentage modelled should be adjusted.


If you're confident that all the actions and processes performed by a role have been modeled, you can leave the percentage modelled set at the default of 100%. However, if you know that only part of the role's activity has been included—such as 80%—you should enter 80% in the percentage modelled field. Once the rest of the role's work has been modeled, you can update the value to 100% to reflect the complete picture. 

 

Roles that are attached to people are allocated capacity based on the percentage of each persons time that is allocated to each role. 


System Capacity is calculated based on how the system is used.  For systems used by people, modelled capacity is determined by the time roles spend using the system, as a proportion of their total time and modelled capacity. Automated system's capacity is set to the same as work performed.


3. Allocation Time to Roles, Systems, People and Infrastructure

Once action hours are calculated, LINQ distributes this time to associated roles, systems, people, and infrastructure.      


Step 1: Assign Action Hours to Roles & Systems

Each associated role and system get allocated the action time. If multiple roles perform the same action, they each get the total time of that action.  

 


Step 2: Allocate Time from Roles to People & from Systems to Infrastructure 

Each role's hours are proportioned to associated people/teams based on each person/team's allocation of time (capacity) to that role.

 

Each system's hours are added to their associated infrastructure.


Each node ends up with:

  • Allocated hours: total of action hours allocated
  • Unallocated hours: modelled capacity of the node minus allocated hours
  • Unmodelled hours: total capacity minus modelled capacity


If you don’t set capacity on roles, LINQ will set the capacity equal to the work, which means you won't be able to compare workload with capacity.  



4. Calculating Costs

After action hours have been allocated to roles, systems, people, and infrastructure, LINQ uses this information to calculate costs and distribute these costs to actions.


The following is a list of costs that can be defined in LINQ:

  • Per unit cost: Fixed annual cost per unit of infrastructure. Infrastructure only
  • Per person cost: Fixed annual cost per person. 
  • Fixed annual cost: Fixed cost per annum
  • Hourly cost: Cost per hour of work.


LINQ calculates costs for people, role, system and infrastructure by combining both fixed and variable components:

  • Fixed costs are divided by the total capacity to determine an effective fixed hourly rate.

  • Hourly costs are added to the effective fixed hourly rate to give a total effective hourly rate


This rate is multiplied by hours to give costs:

  • Allocated costs: Effective hourly rate multiplied by allocated hours
  • Unallocated cost: Effective hourly rate multiplied by unallocated hours 
  • Unmodelled costs: Effective hourly rate multiplied by unmodelled hours 


Once calculated, these costs are proportionally allocated to the roles, systems, and actions that used the resource. This ensures that the cost reflects actual usage and helps identify allocated, unallocated, and unmodelled portions.

Cost Types in LINQ

LINQ splits cost into three distinct categories to provide insight into modelled and unmodelled resource usage: 


A. Allocated Costs

Allocated costs represent expenses directly assigned to actions, roles, and systems based on modelled capacity. These costs scale proportionally with system usage, ensuring financial accuracy.

  • Formula: Allocated Cost=Hourly Rate× Allocated Hours
  • Example: If a system is used for 10 hours at a rate of $200 per hour, the allocated cost is $2,000. 


B. Unallocated Costs

Unallocated costs arise when resources have modeled capacity that isn’t fully utilized. These costs highlight underutilized systems, roles, or infrastructure and signal inefficiencies in the organisation’s cost structure. 

  • Formula: Unallocated Cost=Hourly Rate× (Modelled Capacity−Used Hours)
  • Example: A software license costs $5,000 per year but is only used for half of the modelled capacity. The remaining $2,500 is an unallocated cost.


C. Unmodelled Costs  

Unmodelled costs represent expenses not captured in the current LINQ model. These are estimated based on missing hours in the dataset. 

  • Formula: Unmodelled Cost=Hourly Rate× (Total Capacity−Modelled Capacity)
  • Example: If a role has a full-time salary but only half of its tasks are modelled in LINQ, the remaining portion is flagged as an unmodelled cost. This cost should move to allocated costs as more of the role is modelled.


5. Insights 

By structuring cost allocation using capacity-driven modeling, hierarchical distribution, and dynamic calculations, LINQ enables organisations to:

✅ Identify Financial Inefficiencies – Track unallocated costs to pinpoint resource wastage.
✅ Optimize Workforce Utilization – Balance workloads across roles and systems to improve efficiency.
✅ Improve Cost Transparency – Visualize where expenses are concentrated to refine financial planning.
✅ Enhance Strategic Decision-Making – Use real-time insights to simulate cost-saving scenarios before making structural changes.


 


For more information, please refer to the Insights section.