Resource planning is no easy feat!
Work is unpredictable, and sometimes people are not very good at estimating. Despite best efforts, about 78% of projects still experience budget overruns or delays. This means that resource managers must focus on:
- Better resource prediction
- Risk management
- Forecasting
Beyond planning your team’s time, you must match the right people to the right projects, measure progress, distribute workloads, and juggle shifting priorities.
Yep, that’s a lot.
Even if you have a clear vision of what you want, where you want to go, and how you will reach there, you may not always put everything together and predict what kind of resources will be required. That’s where resource planning comes in. It refers to figuring out how much time, money, manpower, and other resources will be required for a project or an initiative.
Of course, this also involves managing resources to ensure the completion of the project, involving stages in a project lifecycle. Hence, resource managers must be prepared for strategic challenges, ensure proper coordination across units, and properly execute formulated strategies.
So, where do you start?
Assembling the right team for the projects
Imagine a marketing team at a consulting firm. A new client has signed on for a large project requiring various marketing materials. The marketing manager, pressed for time, assigns tasks based on who is immediately available. Jessie, the social media expert, gets overloaded with creating content for multiple clients, including the new one. Frank, the graphic designer, finishes his existing projects quickly and ends up with idle time waiting for Sarah’s content to arrive.
While this may look normal on the outside, there are some major problems associated with this approach –
- Leads to missed deadlines
- Rushed work results in compromised quality
- Idle time leads to waste of billable hours, impacting the firm’s financial performance
Now, imagine the same marketing team approaching the new client differently. The manager takes time to understand:
- The team’s ongoing projects
- Existing deadlines that might conflict with the new project
- Each member’s skillset
- Time required for each task
Here are some changes in this scenario:
- Jessie is able to meet deadlines comfortably
- Frank is assigned tasks early, such as initial design concepts for the social media visuals, and so on
- High quality content due to balanced workload
- Maximized billable hours and minimized time wastage
As seen in the second example, the manager’s informed decisions were made possible by what we call ‘Resource Capacity Planning.’
In simpler terms, resource capacity planning predicts future project needs compared to the available workforce. As you have seen in the example above, the manager used data to predict the resources needed for the new project, ensuring there are no capacity gaps or overloads.
Resource capacity planning centralizes data on skills, schedules, and availability – helping organizations avoid over or underutilization while also reducing costs and improving project outcomes. In the example, the manager had centralized data on team members’ skills, current project schedules, and upcoming vacations. It allowed for efficient resource allocation, preventing both underutilization and overloading of resources.
As a result, project costs are minimized, and outcomes are consistently improved.
Once resource capacity planning is done, one can move on to resource planning. Resource capacity planning informs resource planning.
Phases of resource planning, geared towards organizational performance
While resource capacity planning and resource planning sound similar, they serve different purposes.
Let’s use an analogy. Imagine running a restaurant and predicting rush hours, to ensure that you have enough chefs, waitstaff, and ingredients ready to meet the demand. Based on this, you schedule specific staff for each shift, assign them to particular roles, and manage daily inventory to ensure smooth operations.
What happens when you don’t consider resource availability and predict project demands?
This is what happens:
- Since you failed to predict rush hours, you may underestimate the number of customers, leading to insufficient staff on hand.
- You might not account for staff vacations or sick days, leaving you understaffed during busy times.
- You might understaff during peak hours, and staff schedules may overlap inefficiently.
As a result, you end up with overwhelmed employees, longer wait times, and dissatisfied customers. This is why RCP (Resource Capacity Planning) drives resource planning. Similarly, in a business context, failing to ensure the availability of right resources for future or current projects can lead to project delays, lower productivity, and increased costs.
In a nutshell, resource capacity planning ensures right resource availability while resource planning involves proper allocation and management of the same resources for current projects.
Let’s now explore how you can get resource planning right, while going through its phases.
1. Resource identification
It is the process of identifying and categorizing various resources required for a project or within an organization. This includes human resources, physical resources, financial resources, and technological resources. The primary goal of resource identification is to make sure all necessary resources are available to support the execution of projects.
But here’s where most make a mistake – inadequate assessment of future project needs. This often leads to underestimating required resources which makes execution of project challenging. Increasingly, managers now rely on historical data and trend analysis to predict resource needs based on project demands. Using technology seamlessly involves department heads, financial experts, and so on – ensuring smoother project execution. On average, 70% of organizations use some kind of tools or software for resource planning and management. Most high performing projects are also known to have used some kind of software.
2. Resource allocation
Once you identify the resources, the next crucial task is their strategic allocation. The aim is to match resources with tasks that align with each worker’s skill sets, strengths, expertise, and availability – leading to heightened efficiency. As mentioned in the beginning, about 78% of projects experience delays, and it is sometimes attributed to inefficient resource allocation. Most resource managers assign tasks that do not correspond to individual skill sets and workloads, often leading to overburdening or underutilization of resources.
A solution to this issue is to implement a skill-based resource allocation system, where each team member’s skills, experience, and strengths are maintained in skills inventory. You can gather detailed information about each employee and categorize their skills. To create such a database, you can use a suitable platform or software. This could range from simple spreadsheets to more modern professional services software, like Keka’s PSA software. While spreadsheets are reliable during the initial stages, as the company grows, it becomes complex and difficult to manage a growing workforce. Make sure you don’t wait until your workforce grows, or it may lead to negative financial impact due to unbilled hours, idle time, and compromised quality of work.
Keka’s PSA software also helps continuously monitor and track the current and upcoming workload of each team member, thereby avoiding overloading or underutilization.
3. Resource optimization
Resource optimization is the process of making the most of your available resources, including allocation and managing resources in the most efficient way possible. By carefully managing resource allocation, you can optimize the utilization of human resources throughout the project lifecycle. This means – minimizing costs, maximizing productivity. For instance, in the restaurant analogy used above, imagine the optimization of:
- Staffing, where you perform optimal scheduling and skills matching.
- Inventory management. You use data to predict project demands and manage resources accordingly.
- Technology and equipment. This involves maintaining equipment to prevent breakdowns and using automation tools to streamline repetitive tasks, allowing for more strategic activities.
The best way to ensure optimal resource utilization is to leverage data analytics to gain insights and identify areas for improvement.
4. Resource monitoring
In resource optimization, you adjust and improve the allocation and usage of resources to maximize productivity, while in resource monitoring, you evaluate how well the resources are performing. This process includes keeping an eye on how resources are being utilized and collecting data on the same. This helps detect problems like bottlenecks or inefficiencies early, while providing insights and reports on resource performance and usage to the upper management. Hence, the main aim is to ensure the resources are being used as intended.
However, most resource managers fail to act on the data collected. Collecting data on resource performance is only the first step. This leads to underperformance and missed opportunities for improvement. To tackle this, you can routinely analyze the data collected to identify root causes of inefficiencies, taking informed decisions about resource allocation and management.
5. Reporting and analysis
This refers to collecting, evaluating, and presenting data on resource utilization, performance, and project outcomes. It ensures that resource managers have the insights needed to make strategic decisions. Unfortunately, most managers make decisions based on inaccurate or incomplete data, which is caused by manual data entry and siloed data. Human errors and outdated entries fail to reflect the current state of resources and projects, leading to poor resource allocation and project outcomes.
By implementing automated data collection and reporting tools, you can ensure accuracy and reliable insights for decision-making.
Navigating resource planning throughout the project lifecycle
Resource planning plays a critical role in every stage of the project, from initial planning to execution and completion. It assumes different roles in each stage of the project. Navigating resource planning throughout these stages ensures that projects stay on track, resources are utilized effectively, and organizational goals are achieved.
1. Project planning
During the project planning phase, resource planning helps with accurate estimation of resource capacity, human resources, cost rates, and operational expenses. Additionally, using data analytics and project management tools helps in creating detailed resource plans, avoiding overallocation, shortages, and risks.
2. Project execution
No matter how much you have planned, some challenges are likely to occur. For instance, unplanned absences, equipment failures, or changes in project scope, which impact project timelines and deliverables. Effective resource management techniques, such as real-time monitoring and agile adjustments, are required to maintain project progress.
3. Project completion
At project completion, evaluating key metrics – such as resource utilization rates, budget adherence, and stakeholder satisfaction – inform post-project reviews and enables you to perform better resource allocation and management.
Predicting resource demand for informed hiring in a tight labor market
Predicting resource demand accurately enables companies to hire the right talent at the right time, ensuring operational efficiency and competitive advantage.
When resource allocation is simplified and resource requests are centralized, you can view hiring requests so that you can allocate resources strategically. With a clear view of upcoming opportunities, project status, and resource allocation, you can analyze information in real-time and predict resource needs ahead of time.
This is especially important, considering the tight labor market in the US. Workforce participation remains below pre-pandemic levels. Around 1.7 million Americans from the workforce are missing, when compared to February of 2020. This is due to factors like lack of remote work, increase in part-time jobs, personal growth, and government aid packages.
To hire specialized role that require niche skills, start the hiring process at least 4-6 months in advance. It takes almost 2 months to fill the average position in the United States. Also, use data analytics and big data to analyze past data on projects, integrated HR platforms to take informed decisions, and capacity planning tools to identify gaps that need to be filled through hiring.
Some simple ways you can hire in a tight labor market are:
1. Hire inexperienced workers while considering internal training
2. Update EVP : One thing that has changed after the pandemic is employees’ expectations. As mentioned above, they are seeking remote options, flexibility, and personal growth.
3. Diverse workforce
- More than half of the US workforce demands more diversity.
- Consider redeploying workforce, as in internal mobility or career advancement
Project prioritization can make or break your resource plan!
Around 14% of strategies fall short, due to lack of clear priorities, per Gartner.
Imagine this: You are a leading project manager of a company with limited resources. The decisions you make about which projects to prioritize can make or break your success. That’s where project prioritization comes in. It is the process of determining the best order for completing a group of projects or tasks. It may be based on criteria like financial goals, staff availability, potential for success, how the work impacts business, and so on.
It’s like having a guide that helps you navigate towards the project that deserves your attention and resources. Let’s break down how it works with a project prioritization chart:
Here, you can observe that project priorities are divided into five, based on their level of effort and impact.
- Effort: Resources and time required for each project
- Urgency: Sensitivity of a project, those that require immediate attention
- Impact: Contribution of a project to organizational objectives, offering highest strategic value
Evaluate first: When a project demands high resources or time, consider its urgency to prioritize. This category requires careful consideration before a final decision is made, making sure that resources are allocated to achieve the desired impact without unnecessary delays.
Prioritize: Projects here are characterized by their high impact despite requiring minimal resources. These should be tackled first to capitalize on their potential.
Evaluate next: Here, projects offer moderate benefits but demand more resources compared to high-priority projects. Evaluate their potential ROI and urgency to decide their sequencing in the project timeline.
Consider later: These are projects with moderate benefits that require low effort. They are suitable for later consideration, especially when higher-priority projects tasks are completed. Urgency remains a factor in their scheduling, making sure they align with the strategic timelines and resource availability.
Defer or delegate: You may postpone these projects until resources are more readily available or until their relevance increases. Alternatively, they can be delegated to others or outsourced entirely, optimizing resource allocation for immediate priorities.
Even with proper resource allocation, prioritizing the wrong project can spell misery. Project prioritization is not just about allocation, but also maximizing productivity by directing resources where they matter most. This approach cuts down burnout, missed deadlines, and multitasking – ensuring every ounce of capacity is used efficiently.
On the flip slide, poor prioritization leads to overcommitment, resource underutilization, and misalignment. It’s important to ensure that the resources are directed towards the right value. Without project prioritization, it’s like you have a map without a destination – it leads you nowhere.
Experience live project prioritization with Keka’s dahboard and client overview
Start making the most of your resources!
To optimize your resources effectively, gaining complete visibility into resource allocation and utilization is necessary. You also need real-time data on project health to identify inefficiencies and enhance profitability. By leveraging tools like Keka, which centralize resource management processes, organizations can ensure strategic, optimal resource allocation to meet project demands. To start transforming your resource management capabilities and grow with Keka, click here.
