What is Resource Capacity Planning? An Ultimate Guide for Every Project Manager
What is Resource Capacity Planning? An Ultimate Guide for Every Project Manager
Blog Article
Resource capacity planning predicts the gap between future project demand and workforce capacity to identify the shortfall or excesses of resources. Based on the analysis, one can develop a resource capacity plan to bridge the gap proactively for successful project delivery while ensuring every resource is utilized optimally.
Therefore, it is an essential step before allocation/scheduling that ensures all necessary resources are available before the project’s onset. At the same time, it helps organizations minimize capacity wastage and, in turn, billable losses.
A comprehensive resource capacity planning process requires firms to centralize critical information from various systems and establish a single source of truth. It includes collating real-time data on key metrics such as skill sets, current and pipeline project schedules, workforce capacity, vacations, and non-project activities. This data helps them assess whether they can meet all their immediate and future project requirements.
Let’s understand this critical process through a resource capacity planning example.
Resource Capacity Planning Example
In an audit & accounting firm, there are five projects in the pipeline that have reached the probability stage. At this point, the resource managers begin the capacity planning process to understand whether they have the right talent to take on these upcoming opportunities.
Managers first gather the resource demand of these pipeline projects. This includes outlining the number of resources and their types, skillsets, expertise levels, and timeline required for the complete project lifecycle. Once they have these insights, managers look into the internal channels and thoroughly analyze the existing workforce capacity.
The next step involves a detailed comparison between the project resource demand and the available capacity to identify any skill gaps or shortages in the workforce. For instance, if Project A requires three senior auditors with expertise in financial audits and the firm only has two available, this is noted as a critical gap.
After identifying gaps, managers explore solutions to bridge these gaps. They consider options such as upskilling existing employees through targeted training programs, hiring temporary or permanent staff, or reallocating resources from other projects that are winding down.
Furthermore, managers perform scenario analysis to anticipate different outcomes and accordingly prepare contingency plans. This might involve creating a buffer for additional freelance consultants who can be called upon if there is an unexpected increase in workload or last-minute project scope changes.
By following a systematic resource capacity planning process, the audit & accounting firm can successfully manage multiple projects and ensure profitability.
Next, let’s learn about the various steps involved in the resource capacity planning process.
Resource Capacity Planning Process
A well-defined resource capacity planning process includes the following steps:
Estimate Resource Demand
The first step is to accurately forecast the resource requirements of pipeline projects. For this, managers must carefully evaluate the project scope, tasks, budget, and timelines to determine the specific resources required for each activity. In other words, it involves understanding the skill sets, types, and duration of resources needed for the entire project lifecycle.
Assess the Resource Capacity
The next step is to assess the overall resource capacity for a specified period. Managers must look into internal and external channels to calculate the cumulative workforce capacity, which includes full or part-time employees, contractors, and temporary personnel. Moreover, they must also consider planned leaves, contract terminations, and ongoing recruitment to make an accurate assessment.
Perform Capacity vs. Demand Gap Analysis
Once the project demand and workforce capacity are calculated, managers must conduct a capacity vs. demand gap analysis. It helps them identify the gaps between the resources needed for future projects and the ones available within the organization. This allows managers to verify whether they have an excess or shortage of resource capacity.
Bridge the Demand Gaps
Based on the findings of the capacity analysis, managers can formulate a resource capacity plan to bridge the gap. For resource deficit, they can proactively initiate training/upskilling or staggered hiring to acquire the necessary skill sets. On the other hand, for resource surplus, they can bring forth project timelines or sell the extra capacity at discounted rates.
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