Using resource capacity planning as a key part of project management success
Resource capacity planning is a critical part of project and portfolio management. No matter the size and scope of the project, there is always only a limited amount of resources available. Therefore it’s vital to understand whether those resources are adequate to complete the program of work.
While this sounds like a simple process, however, in reality it can be quite a complicated exercise to carry out. It requires well-developed forecasts of future calls on resources, along with detailed information about staff time available. At DRMcNatty, we have extensive expertise in carrying out resource capacity planning across multiple industries. We have compiled this guide to the process to help give an overview of resource planning and explore why it should matter to you.
Resource capacity planning is a valuable project management tool
What is Resource Capacity Planning?
The process of resource capacity planning allows a project manager to compare that amount of resource with the demands of the project, thus highlighting whether there are enough resources to complete the work as it stands, or for a portfolio, to highlight whether there is the capacity to take on additional work. In essence, it’s the process of balancing the amount of available resources with the demands of a project or portfolio of work.
Why is Resource Capacity Planning important?
A failure to compare future work demands with a realistic view of available resources can lead to problems.
Firstly, the performance on a specific project may be compromised if there are not enough resources available to complete the work as planned. This can lead to delay on the schedule or the need for an increased spend to bring in additional staff to complete the work within the allotted time.
Secondly, the performance across a portfolio of work may be compromised if a commitment is made to take on additional work, but resources were already over-committed. This is likely to lead to the need for undesirable actions like adding more resources at a significant cost or reducing the scope of projects to fit actual availability.
To avoid either of these outcomes, therefore, it’s essential to work through the process of resource capacity planning to ensure that your resources match your requirements. A good resource planning exercise can help you to identify gaps that need to be addressed and filled, both in terms of the numbers of staff working on a project, and also in terms of the skills of those staff. If you can identify a skills shortage at an early stage, then it’s possible to plan for that shortage, filling it before it becomes a strain on delivery.
Resource capacity planning avoids future problems with staffing and scheduling
Three key elements of Resource Capacity Planning
The following elements are important for resource capacity planning:
Resource forecasting
One of the key inputs of capacity planning is a set of resource forecasts for each relevant project. These forecasts are best provided by the individual PMs linked to each project, as they have the most in-depth understanding of likely future resource requirements.
These forecasts should be closely linked to the project planning process. Project plans will consider things like project scope, a breakdown of tasks required, scheduling considerations, a split of resources, and task dependencies. The forecasts should therefore encompass all of these considerations to produce a comprehensive overview of future resource requirements.
Analysis of available information
Having collected together the resource forecasts, an analysis and interpretation exercise is required. This analysis is especially important if capacity planning is being carried out at portfolio level. The purpose of this analysis is to collate, aggregate, and report the forecasts together as a cohesive whole. This gives a comprehensive overview of what resources will be needed at portfolio level moving forward.
It’s crucial that the project governance board owns this analysis and clearly understands likely future resource requirements. As good governance is a fundamental part of project success, this is an essential element to get right.
Analysis of available information is a key component of resource capacity planning
Comparison with available resources
The other element required is a clear understanding of the amount of resources available within the project team to complete the work required. It can help focus on your most critical resources- the ‘bottlenecks’ without which a project can’t proceed.
The important thing is to be realistic. While it can be tempting to say that a full-time employee can work on a project on a full-time basis, in reality, the number of hours that can be dedicated fully to project work is likely to be less due to other ‘transactional’ elements of their jobs. By this, we mean things like training, emails, administrative tasks, attending meetings, etc.
Resource forecasting requires an understanding of the ‘real’ number of hours available to each project, leading to specific and accurate forecasts, which in turn help produce a good quality capacity planning exercise.
The outcome: Answers to two key questions
Working through the steps above, the aim is to answer two questions:
- ‘Do we have enough resources to complete our existing work?’ and,
- ‘Do we have enough resources available to allow us to take on more work?’
The answers to these questions are the end goal of resource capacity planning. They can be brought into play when new project requests are received or if questions are asked about the project team’s ability to deliver on existing projects within budget and schedule.
How to overcome the challenges of Resource Capacity Planning
The theory of resource capacity planning is simple; however, it can be complicated to carry out correctly, and there are a couple of specific challenges that can arise:
Accuracy of forecasts
As previously mentioned, the accuracy of forecasts is of paramount importance in the capacity planning process. Inaccurate or incomplete forecasts can lead to overstretching of resources as new work requests come in.
Ensure that individual project managers are involved in the forecasting process and link the forecasts to project plans. If the plans are comprehensive and robust, then the forecasts should accurately reflect the actual resources needed.
Engagement of the governance team
One of the potential outcomes of resource capacity planning can be an acceptance that resources are limited, and therefore negotiation about how those resources will be used will be needed. This negotiation requires the engagement of senior management and the governance team.
It’s therefore crucial to ensure your capacity planning is transparent and rooted in data. This helps counter any objections about the outcome, as there will be a demonstrable strain on resources that cannot be ignored.
Engagement of the governance team is an important part of the process
The fluidity of the project environment
Projects are run in a dynamic environment, and things rarely remain static for long. This might mean that certain specialist members of staff change roles or leave the organization, or budgets alter, or the scope of a project may change. All of these will have an impact on capacity planning.
We already know that project management trends are changing, and projects can evolve during their life-cycle. It’s therefore essential to treat capacity planning as a dynamic process in its own right. As the project environment alters, so will the resource demands of a project or portfolio, along with the capacity for delivery that is available. Frequent reviews of the capacity planning process will keep your information up to date and ensure that your resources do not end up over-stretched due to these types of changes.
Resource Capacity Planning should be a key part of your project management approach
Carrying out a resource capacity planning exercise is well worth the effort taken in compiling the information required. The results can prevent expensive over-commitments of time and staff and help avoid reputational damage if work cannot be completed as promised. It can also help identify shortages of particular skills and anticipate potential threats to delivery before they materialize. Understanding any potential surplus of available resources can also prove very beneficial from a business development point of view, as it paves the way to take on more work with the confidence of being able to deliver.
Our expert team has experience carrying out resource planning across a range of industries and for all sizes of business. We can provide advice and guidance on the process from start to finish, and work alongside your PMO to guide you through the steps. Contact our knowledgeable team for a straightforward conversation about the services we can offer and a discussion about how we can help your capacity planning process succeed.
