Making sure that a company has enough resources to complete its projects successfully is one of the primary objectives of a resource manager’s work.
But it can be rather difficult to predict how many employees you’ll require to staff projects. What is more, in a multi-project environment, where you have to balance out the increasing number of project tasks and available employees, this challenge becomes even more significant and problematic.
One of the means that makes it possible to cope with these concerns and ensure sufficient and proper project staffing is resource capacity planning. Let’s explore this process in more detail.
What is Resource Capacity Planning?
To ensure timely and successful delivery of projects running in an organization, you have to understand and plan your resources’ capacity beforehand. Resource capacity planning in project management is the process of determining the number of resources you’re expected to require to meet the project needs. In other words, it’s about forecasting the gap between available resources and the required ones. This will give grounds for informed decision-making: e.g., whether you will need more employees to complete the current and upcoming projects, or maybe it’s reasonable to postpone a new project for later. Let’s look at the other advantages of capacity planning.
Benefits of planning resource capacity
- It prevents unexpected resource shortages.
- It helps avoid cost overrun – when you analyze the resource demand and plan corresponding capacity beforehand, there will be little chances for resource shortages and unbudgeted expenditure correspondingly.
- It optimizes employees’ workload and prevents them from being overwhelmed.
- It contributes to more reasonable utilization of available resources, which is a top-priority task for a multi-project environment with a shared resource pool.
- It makes it possible to forecast skill gaps; having identified one, a project/resource manager can take corresponding measures to solve the problem (reskilling, upskilling).
- It prevents project delays resulting from employees’ unavailability.
Finally, if we talk about a multi-project environment, the need for forecasting the resource demand and capacity becomes even more urgent. Assigning resources in a multi-project environment is rather challenging, because:
- available employees are required for several projects at the same time;
- projects have resource dependencies – e.g., if an employee takes a sick leave, it will affect more than one project;
- the impact of external factors: e.g., office politics or management by decibels – when a critical employee is assigned to the project that has lower priority, but serves someone’s interests.
One of the ways to eliminate the negative impact of these factors is to plan resource capacity in advance, which will become the basis for making reasonable decisions.
Capacity Planning Steps
The main landmarks in the resource capacity planning process are as follows:
- Determine your workforce capacity (all the available employees you have and the number of hours they work; take into account public holidays, vacations, sick leaves, training, etc.).
- Gain insight into all the current and upcoming projects.
- Forecast resource demand for these projects.
- Determine the highest priority projects.
- Identify the gap between resource demand and capacity.
- Plan how you are going to bridge this gap between required and available resources (hire new employees, retrain the existing ones, apply resource management techniques, etc.).
There are several strategies to bridge the gap between resource demand and capacity. Let’s consider them in the section below.
Capacity Planning Strategies
The choice of a capacity planning strategy will depend on the size of an organization as well as the number of projects and resources in it.
This strategy aims to meet the forecasted resource demand, e.g., hiring more employees to staff the anticipated increasing number of projects.
It’s about having enough resources to meet the actual demand. This strategy is beneficial for projects with limited budgets or for small companies. However, it may cause bottlenecks in case the resource demand grows.
This strategy is a combination of the two previous approaches. It involves more frequent monitoring of the demand along with external factors (e.g. changes in the industry or market trends) with subsequent capacity planning. The match strategy requires more effort, but it’s the most flexible approach.
Let’s explore some recommendations on how to do capacity planning with ease.
Tips on Effective Resource Capacity Planning
Set priorities between projects
It’s the basic prerequisite for successful management of a multi-project environment in general and effective resource allocation across all projects in particular. It’s no less significant for planning resources’ capacity. Companies cannot hire an endless number of resources (and sometimes cannot afford to hire new employees due to limited budget), so they always have a resource constraint – i.e., a limited number of employees to staff projects. With this in mind, before planning resource capacity for every new project, you should analyze its feasibility: whether there are enough human and material resources to complete it without employees’ overload (or enough budget for hiring more employees) or it should be better postponed; as well as determine its relevance in terms of business needs.
Planning resource capacity for the highest priority projects and tasks will make it possible to deliver the most significant projects successfully and at the same time avoid cost overrun.
Keep track of employees’ competences
Along with project prioritization, having information on employees’ skills and experience at hand is the other important component of resource capacity planning. It will not only facilitate proper resource allocation, but will provide a resource manager with options on how to solve the problem of insufficient project staffing. For example, whether there are employees from other departments with necessary skills and capacity to perform a certain task or whether it’s reasonable for a company to invest in some employees’ reskilling/upskilling to create a team of interchangeable resources.
Take care of team members’ workload
When planning resource capacity, you should bear in mind that their workload must be balanced, and overload should be avoided through every possible means. It’s easy to put too much on a plate of a high performer, especially under conditions of limited time and budget. But having employees overwhelmed with their tasks is a straight road to putting the whole project in jeopardy.
Prepare for risks and uncertainty
Unexpected events can lead to a significant disruption of project workflow, which can among other things result in unforeseen demand for additional resources. How can you get ready for contingencies?
- First, create a risk management plan to be ready to respond to any hazard and avoid its negative effects.
- Second, you can prepare for uncertainty by adding time and budget buffers to project estimates. So, if something goes wrong, your projects are more likely to stay on track.
Utilize a resource management tool with advanced functionality
Of course, it’s extremely difficult to do the capacity planning manually. For example, you cannot bear in mind the information on each employee’s competences; and requesting information on resources’ days off or sick leaves from the human resources department is really time-consuming. That’s why, leveraging resource management software is a great solution to simplify the resource capacity planning process.
As stated above, performing resource capacity planning in a multi-project environment is twice as difficult. For this reason, let’s consider RM tools’ contribution to capacity planning through the example of Epicflow, which is a multi-project resource management solution. Below are some of Epiclow’s functions that can be helpful for planning resource capacity.
Providing insight into team members’ capacity
In a multi-project environment, it’s impossible to bear in mind each employee’s capacity when making resource allocation decisions. Epicflow provides a resource manager with the data on team members’ remaining capacity based on their involvement in various projects. For more convenient resource allocation, it is represented in the form of batteries and marked with different colors.
Integration with HRM systems
To plan resource capacity, you’ll need the information on employees’ vacations/days off, sick leaves, or training. As long as Epicflow provides integrations with human resource management systems, you won’t have to turn to the HR department everytime you need this data – all the changes in an employee’s availability will be reflected in the system. Also, if a resource is unavailable for certain dates, the system can automatically change the schedule and suggest an employee to replace the unavailable one. Such a solution significantly simplifies the resource capacity planning process and saves a resource manager’s time.
Keeping track of employees’ competences when there are hundreds of them is an impossible task. However, all this information is available in the Epicflow system: it makes it possible to add each employee’s competences and their levels as well as specify required competence level for every project task. It also provides great assistance in the resource allocation process, as the system can suggest a perfect candidate to assign a certain task to. But what is more, you can easily access necessary information on team members’ competences and capacity, which significantly simplifies the whole resource management process.
Prioritization of projects and tasks
Setting the right priorities between projects and their task is a must for planning resource capacity in a multi-project environment. But how to gain insight into which of them require most attention at the moment? Epicflow can release you from this cumbersome task: it automatically prioritizes projects and tasks across the whole multi-project environment. Therefore, a project/resource manager always knows what projects require most of their attention, while project team members have a clear idea of what they should work on at the moment. In addition, when you add a new project, the priorities are recalculated automatically, which means that you always know what matters most for the moment.
Forecasting resource bottlenecks
When planning resource capacity, you’d probably need the information on employees’ workload in the future. Epicflow can provide you with this data: based on the information on team members’ current tasks, the Future Load Graph shows what their workload is going to be in the future. Therefore, a resource manager gets the idea of employees’ future capacity and can take corrective measures if necessary.
Grounds for making informed decisions
As we’ve noted before, every upcoming project should be analyzed in terms of its feasibility. With Epicflow, you can test various scenarios and see how your project environment will react to certain changes: e.g. what happens if you add one more project to your setting, whether your resources will be overloaded, whether you’ll be able to deliver current projects on time and within budget, and more. In such a way, you’ll have the basis for making most reasonable decisions.
Let’s sum up, how Epicflow can assist you in resource capacity planning:
- prioritizes projects and tasks;
- gives insight into employees’ competences and availability;
- provides opportunities for simulating project flow changes and forecasting possible bottlenecks, which will become the basis for informed decision-making.
In fact, it offers much more opportunities for effective and efficient resource management and streamlined management of multiple projects. Feel free to book a call with Epicflow experts if you want to explore more of its functionalities.