In project management, resources refer to everything needed to get a project completed. This includes people, materials, tools, and finances. Effectively managing resources is a key aspect to ensure project success. It involves organising and improving these resources to meet project objectives within the allocated time and budget.
What is resource planning?
Resource planning involves identifying, allocating, and optimising the various resources required to successfully execute a project.
Resource planning aims to ensure that resources are available when needed and that they are utilised efficiently. For instance, it wouldn't make sense to have too many workers on a construction site when there's not enough work to do. Just as it wouldn't be practical to run out of building materials during a construction.
Resource planning typically includes:
· Identifying the scope of work
· Estimating the resource requirements
· Allocating these resources to various tasks
· Scheduling them effectively
· Continuously monitoring to ensure the project remains on track
What is capacity planning?
Capacity planning is an integral part of ensuring that an organisation can operate efficiently and meet its objectives. It’s the strategic process of understanding an organisation's ability to meet its current and future demands. It involves assessing and optimising an organisation's resources to ensure they are aligned with the projected workload.
In essence, capacity planning aims to answer several key questions:
- What is our current capacity? This involves assessing the current capabilities and resources of the organisation.
- What is our expected demand? Organisations need to forecast the demand for their projects.
- Do we have enough capacity to meet this demand? By comparing the current capacity to the expected demand, an organisation can understand whether it has the necessary resources to fulfil its duties.
- How can we adjust our capacity? If there's a shortfall, capacity planning helps to figure out how to bridge the gap.
How to calculate capacity planning
Capacity planning for human resources involves assessing the organisation's current and future workforce needs. Here’s 5 steps to help calculate capacity planning:
- Measure current capacity: Calculate the current project resource capacity by considering the number of available working hours or labour resources. For example, if you have 20 full-time employees working 40 hours a week, your current project resource capacity is 800 hours per week. Remember, you need to consider any specialist resources you may have too and their capacity.
- Forecast project resource demand: Forecast the demand for human resources based on various projects including anticipated projects. Again, remember to account for specialist roles.
- Determine project resource utilisation: Calculate the current use of your project resources by comparing the actual work hours to the total available hours. If your team is working 640 hours out of 800 available hours, the utilisation is 80%.
- Plan for project resource adjustments: If the forecasted project resource demand exceeds current capacity, plan for adjustments. This could involve hiring more employees, cross-training existing staff, or outsourcing certain tasks.
- Use project resource capacity planning tools: Use software to streamline the process. Great tools can automate data collection, analysis, and forecasting, making project resource capacity planning more efficient and accurate.
Capacity planning is vital for managing workforce productivity and ensuring that workloads are balanced. It’s also important to proactively address staffing needs as the organisation evolves. It helps organisations allocate human resources effectively to meet their strategic objectives and respond to changing market demands.
How to create a resource plan
As we know, resource planning goes far beyond just planning for the human resources needed. Resource planning in project management involves a detailed process. Here's some steps to create a resource plan:
- Determine project scope and requirements: Start by defining the scope and requirements of your project. Understand the specific tasks, deliverables, and goals that need to be accomplished. This clarity is essential for working out the resources needed.
- Identify resource types: Categorise the types of resources required, such as equipment and materials.
- Estimate resource quantities: For each resource type, estimate the amount needed.
- Allocate resources to tasks: Assign the estimated resources to specific project tasks. This involves deciding what equipment is needed for each task.
- Consider resource availability: Assess the availability of the resources. Understand if the necessary resources are currently available or if additional hiring or contracting is required.
- Calculate resource costs: Determine rental or purchase costs.
- Create a resource plan: Collect all the calculated data into a comprehensive resource plan. This plan should detail the types, quantities, costs, and allocation of resources for each project task. You can then add other resources to this too, for example human and financial.
- Monitor and adjust: Resource planning is an ongoing process. Continuously monitor the actual resource usage compared to the plan and make adjustments as necessary. If any discrepancies or resource shortages are identified, take corrective actions to keep the project on track.
- Use resource planning software: Fluid offers resource planning modules that automate and streamline this process. These tools can provide real-time insights, making resource planning more efficient and accurate.
By following these steps and utilising appropriate tools, you can conduct resource planning that helps ensure your projects are adequately resourced.
Types of resource capacity planning strategies
Capacity planning strategies are essential to ensure that organisations have the right resources in place to meet their business goals. There are several types of capacity planning strategies, each with its own focus and benefits:
- Lag Strategy:
Reactive approach: In the lag strategy, organisations wait until after experiencing an increase in demand before expanding their capacity. This strategy is often cost-effective initially, as it avoids upfront investments. However, it can result in longer lead times, potential stakeholder dissatisfaction due to delays, and challenges in responding to unexpected demand spikes.
- Lead Strategy:
Proactive planning: The lead strategy, conversely, involves preparing for anticipated increases in demand. Organisations assess historical data, market trends, and other factors to forecast future demand. They then gradually increase capacity in advance of expected demand growth. This approach ensures readiness to meet customer needs promptly, but it may require higher initial investments.
- Match Strategy:
Aligning capacity with demand: The match strategy aims to closely align capacity with actual demand. Organisations continually adjust their capacity to match current demand levels, ensuring that they neither overcommit nor underutilise resources. Just-in-Time (JIT) manufacturing is a classic example of this approach, promoting efficient resource utilisation.
- Adjustment Strategy:
Flexibility and responsiveness: The adjustment strategy focuses on flexibility and adaptability. Organisations monitor demand closely and make real-time capacity adjustments as needed. This strategy allows for rapid responses to changing conditions, reducing the risk of overcapacity or underperformance. It is particularly useful in dynamic or uncertain markets.
These capacity planning strategies serve different purposes and offer various advantages and disadvantages. The choice of strategy should align with an organisation's specific goals, industry, resources, and risk tolerance. By selecting the most suitable strategy, businesses can ensure they have the right capacity to meet customer demand efficiently.
5 key capabilities for resource planning software
Whether it’s resource capacity planning or resource planning, it’s clear to see that project management software is a must have! The right software not only makes life easier and planning more efficient, it’s also more effective by allowing for data-driven decisions. Here’s a list of 5 key capabilities that you need from a software solution to make resource planning more effective:
- Resource allocation and scheduling:
- The software should allow you to allocate resources to specific tasks or projects and create schedules that consider resource availability and workload. It should provide a visual representation of resource allocation, making it easy to identify overbooked or underutilised team members.
- Real-time visibility:
- Real-time data on resource allocation, task progress, and project timelines are essential. This capability ensures that you have up-to-the-minute information, enabling you to make informed decisions and quickly address resource allocation issues.
- Collaboration and communication tools:
- Effective resource planning often involves collaboration among team members, stakeholders, and managers. The software should offer communication and collaboration tools, such as comment threads, chat, or notifications, to facilitate real-time discussions and updates.
- Workflow automation:
- Automation features can streamline resource planning by automating repetitive tasks, such as resource allocation and time tracking. Workflows can be customised to match your organisation's resource planning processes.
- Integration with other tools:
- Seamless integration with other tools, such as calendars, timesheets, or financial systems, is crucial. This allows you to centralise data and streamline resource planning by connecting relevant information sources. Having built-in timesheets like Fluid does is even better!
These capabilities enable you to efficiently plan, allocate, and manage resources for your projects, ensuring that you meet project goals and deliverables while maintaining a balanced workload for your team.