Necessary Capacity Planning Tools

Capacity planning is a process that balances the available hours of teams against what the project needs. Capacity in this case is the most work that can be done over a certain time frame. It can be a delicate balancing act as there could be several items needing attention at once, such as the availability of the team, the money in the budget for those hours and what is demanded by the client, stakeholder or customer. Planning is how one schedules the hours of the team members so that the work gets done in time.

The first question to address when planning for capacity within an organization is whether or not there is any capacity, or the resources, to do the work. Regardless of the situation, the information will not be worth much unless there is a way to measure and track these resources, such as a resource management tool. Only then can an educated decision on capacity planning be made.

It’s a matter of supply and demand, are the resources available? Those resources can be people, who can be reallocated from other projects that have been cancelled. If it’s skill, then there’s training to close the gap.

While the terms are sometimes used interchangeably, they are not the same. The process is different. The differences have been listed below.

Capacity Planning

  • It’s a planning process designed to help determine if the organization has enough people resources according to skill sets.
  • It looks at the availability of those resources at the skill set/team level.
  • Then it facilitates the decision-making process to hire resources or defer/approve/cancel projects.
  • Capacity planning is about supply and demand.

Resource Planning

  • It’s a planning process that coordinates and allocates actual resources to projects based on skills required.
  • It provides a plan to project managers, which resources they can plan to use for their projects and when.
  • Resource planning is people resource utilization.

Capacity Planning Checklist

The following is a short checklist for high-level capacity planning.

  1. Establish Cross-Functional Team: To collaborate and communicate about resources, as you’re looking across different projects or programs, it can assist a cross-functional team as required with different levels and different functions.
  2. Calculate Resource Capacity: Before planning can occur, there must be an idea of what tool is required, which is why it’s important to note the gap between what is wanted and what is need, and then figure out how to narrow it.
  3. Determine Resources required by the Project: For each project, look at the scope and what resources are required to do the task for the project.
  4. Prioritize Projects: Which projects are most important, and which can be put aside for the time being? Remember everything cannot be done at once.
  5. Allocate Resources Based on Project Priority: Allocate those prioritized projects and make sure that they are aligned with the goals of the organization.

The following are three tips for capacity planning.

  1. Keep the lines of communications open between executives, project management leaders and stakeholders.
  2. Document known risks (such as union strikes, weather, government regulations) that stop a project or create new ones unexpectedly.
  3. Plan for how to handle too much capacity (where is it and how to resolve it, such as reassigning) or not enough capacity (again, where/how.)

Related to capacity planning is capacity requirements planning, which is when an organization decides how much it needs to produce and whether it is capable of doing so. Therefore, capacity requirements planning allows companies to meet supply and demand.

This applies to IT, as they must access the demand for their service and determine their ability to meet that demand with whatever supply they have, be that people or technology. In order to do this successfully, any enterprise must look at internal and external forces and how they impact the business.

Capacity requirements planning is the macro to capacity plannings micro. That is, capacity requirements planning is the big picture that takes in the whole business landscape to see where the company’s production fits. While capacity planning is for the specific projects the company engages in.

Capacity planning is linked to resource management. Projectmanagementcompanion.com has a selection of resource management tools that provide control over planning, scheduling and sourcing. Workload can be balanced and reassign tasks to keep team members from being idle. The resource management tools allows managers to see what their teams are doing, when they’re doing it and how much it costs to do it. Resources can be tracked and see progress, which allows managers to make better decisions. To get a full picture of the costs involved, hourly rates can be added for teams and contractors across project or portfolio. As team members log their hours, their actual costs are automatically calculated and can be compared to the costs that were planned, so adjustments to capacity can be made as needed.

Holidays and working days can also be accounted, whether they’re local or international. These off days are blocked in the calendar, so resources can be better managed. Once capacity planning is completed then the use of the resources can be planned, as to use them more wisely to accomplish project goals.

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