What is needed for good capacity planning?
Capacity planning is an issue of supply and demand, which has the ability to derail a project. It 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 timeframe. It’s a bit of a juggling act that has to keep several balls in the air, 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. Capacity and planning obviously go hand-in-glove. Planning is how one schedules the hours of the team members so that the work gets done in time.
The first questions to address when planning for capacity within an organization is whether or not there is sufficient capacity, or the resources, to do the work. Regardless of the situation, there will be a lack of understanding unless there is a way to measure and track 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 or not? Those resources can be people, which can be acquired from other projects that are cancelled. If it’s skill, then there’s training to close the gap. 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 timeframe.
While the terms are sometimes used interchangeably, they are not the same. The process is different. Below is a list to understand the differences,
- 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.
- 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.
Here is a short checklist for high-level capacity planning.
- Establish Cross-Functional Team: To collaborate and communicate about resources, while looking across different projects or programs, the preference is for a cross-functional team with different levels and different functions.
- Calculate Resource Capacity: Before planning can occur, there must be an idea of what is available, which is why it’s important to note the gap between what is wanted and what is needed, and then figure out how to narrow it.
- 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.
- Prioritize Projects: Which projects are most important, and which can be put aside for the time being? Not everything can be done at once.
- Allocate Resources Based on Project Priority: Now allocate those prioritized projects and make sure that they are aligned with the goals of the organization.
The following are three capacity planning tips.
- Keep the lines of communications open between executives, project management leaders and stakeholders.
- Document known risks (such as union strikes, weather, government regulations) that stop a project or create new ones unexpectedly.
- 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 also 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 planning’s 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 tool that provides control over planning, scheduling and sourcing. Enabling a balance of workload and the ability to reassign tasks to keep team members from being idle.
The resource management tools allow managers to see what their teams are doing, when they’re doing it and how much it costs to do it. Providing the ability to track resources and see progress, which allows managers to make better decisions.
To get a full picture of the costs involved, add hourly rates for teams and contractors across projects or portfolios. As team members log their hours, their actual costs are automatically calculated and can be compared to the costs that were planned, so they can be capacity adjusted as needed.
Holidays can be planned and working days for team members determined, whether they’re local or international. These off days are blocked on the calendar, to better manage resources. Once the capacity is known then resource availability can be more wisely determined to accomplish project goals.
Capacity planning requires the right tools to give managers insight into workforce and how it aligns with budgets. Projectmanagementcompanion.com is a project reference site that provides insight to assist in real-smart business decisions.
The resource management tools listed provides a window into team’s resources and helps for a better planning process by using plan online Gantt charts. To see how we can help you manage your next project better, try any one of the tools found on Projectmanagementcompanion.com.