Resource Capacity planning improving project performance
A project is deemed successful when the deliverables are met to the client’s expectations and are completed within time and budget. However, it is not as easy as it sounds. Project managers need to meticulously plan every aspect and track the performance at all levels to be successful.
In actual fact a project succeeds when there is a detailed project plan with deliverables documented against each milestone. The project manager then needs to track them at every stage and take corrective action if something goes wrong
The project’s requirement spans from niche competencies to equipment, material, asset, and so on. It is crucial to assign the right resources to the right project. If this doesn’t happen then the project can run the risk of not delivering on time and add unnecessary cost.
Capacity Planning helps with the prediction of shortfall or excess of resources in advance. It allows the project managers to be better prepared for future projects and avoids any last-minute hurdles. With proper resource planning, the project can be successfully delivered.
The comprehensive process of forecasting the capacity and demand gap and implementing the right resourcing treatments to bridge the gap is known as resource capacity planning. It empowers data-driven decision-making by centralizing and gathering relevant information on resource availability and utilization in real-time. This creates transparency and facilitates managers to stay informed of enterprise-wide resource metrics at all times. Moreover, accurate prediction of the metrics allows them to form a full-proof action plan in time. All these benefits put together make resource capacity planning an incumbent process in the project and resource management realm.
There are five ways that capacity planning improved project performance
Capacity planning provides enterprise-wide visibility of the resource demand, their capacity, attributes like role, skills, costs, location, etc. Being forewarned about the project demand, managers get enough lead-time to hire or request the right resource at the right time and cost.
With a unified view of the workforce, they can also leverage the cost-effective global resource across matrix boundaries to maintain any project’s financial health. Simultaneously, upskilling the benched resources and planned hiring minimizes last-minute hiring cycles curbing the costs substantially. All these measures cumulatively reduce project resource costs significantly.
When a project is in the pipeline, managers get an overview of the future requirement in advance. Leveraging this information, they can evaluate the existing resource pool, competencies, schedules, and availability. It will allow them to understand if there is a shortage or excess of resources. If the resources are in excess (capacity exceeds the demand), managers can bring forward additional pipeline projects, sell the excess capacity, and so on.
In case there is a resource crunch, managers can hire permanent talent, contingent workers, or contractors to bridge the gap. Or they can go ahead and train the existing resources. When an appropriate measure is implemented, managers can plug the skills gap in advance and ascertain timely delivery of projects keeping the client’s expectation in mind.
With transparency in project tasks, their skills demand, resources’ schedules, and their profiles, managers can allocate the competent resources to the respective tasks. Using the capacity planning solution, they can take a ‘best resource, best fit’ approach instead of a ‘first visible, first fit’ approach.
After procuring the workforce to execute the project, the next step is to understand the resource schedules and their availability. If a resource is booked for another project, managers need to ensure that their allocation does not lead to overutilization. Otherwise, resources may experience burnout. At the same time, the expertise level of every employee must be considered. For instance, a low-experienced resource may take more time to accomplish a task than a highly experienced resource. Based on their proficiency, managers have to design the schedules. Capacity planning makes this process a breeze by providing an overview of resource allocation, utilization, and schedules on one single platform.
Given the ability to forecast future opportunities and their requirements, capacity planning brings together the pipeline and delivery process. Pipeline projects can either come from the sales team or they can be internal projects to meet the company’s strategic objectives.
Proactive planning allows the team to take on more projects as the delivery team formulates a working framework for the approval process. Thus, capacity planning also plays a critical role in enhancing the revenue generation activities for the firm.
One of the most important factors to consider while managing projects is the resource health index. If the resources are experiencing burnout, or if a highly-skilled resource is working on admin or mundane tasks, or an instance of mismatched skillset, it can all boil down to lowered productivity.
Capacity planning helps managers combat this challenge. It can provide actionable insights into resource utilization and availability. If a resource is working on a non-billable project or admin work, managers can mobilize them to either strategic or billable work. It allows efficient utilization of their expertise, enhancing their productivity. Similarly, if a resource is over-utilized, managers can deploy the right optimization technique (resource levelling or smoothing) to even out the workload.
Understanding the impact of capacity planning on a project’s performance will assist a project manager to achieve their goal of successful delivery. Some further aspects to consider when capacity planning is to streamline the process, by establishing an advanced capacity planning and forecasting process to enhance efficiency. Stay vigilant of resource requirements or of the project pipeline to fill the demand gap in advance. Assess the capacity against the demand gap report diligently before implementing the resourcing treatment. Organize internal or external training sessions periodically for employees who need further training so they can be used in the future. Leverage the matrix organizational structure to form a cross-functional team and reduce the hiring/firing cycle. Let us know the capacity planning approach you take on your projects we would like to hear from you.
All the very best on your project management journey.