What is resource planning?

what is resource planning

I think it’s fair to say that any folks reading this will know what project planning is and how to build a project plan.

Yet, let me pose a question: How well-versed are you when it comes to resource planning and the steps involved in building a resource plan? And do you understand the differences between resource planning and its close relation resource capacity planning?

Join me as we delve into the world of resource planning and learn what it is, the process and steps involved, and much more.

Table of contents

What is resource planning?

Resource planning is a resource management technique that ensures you get the right people working on the right projects. It involves a delicate dance to ensure you balance and allocate resources between multiple projects so that the resourcing requirements of all your projects are met.

The key aims of resource planning are:

Optimize resource utilization: Ensure the efficient use of resources to prevent overallocation or underutilization.

Align resources to project needs: Align resource allocation with project timelines to ensure resources are allocated to projects when needed.

Balance workloads: Improve team performance by balancing workloads and matching the right resources to the right work.

Plan for the future. Resource planning monitors both current and upcoming workloads so you can be proactive about any resourcing needs or issues that arise.

Resource planning involves the juggling of resources to projects to get the best outcome for the organization and the resources involved.

What is resource planning?

Kelloo's resource management tools

Resource planning, forecasting and reporting in one place. We help you get the most from your projects and people.

What is the difference between resource planning and capacity planning?

Capacity planning and resource planning are not the same thing. Unfortunately, the terms are often used interchangeably which causes confusion.

Organizations will always be asked to do more work than they can handle.

So capacity planning is used to work out which projects they can realistically take on given the resources they have and who they can hire. It looks at the organizations strategic priorities and the overall capacity of skills to help make decisions on which projects to approve.

Whereas resource planning is used to best allocate resources to the projects approved to be run. Resource planning involves spreading and allocating resources across the projects to minimize resource utilization issues and reduce project timings where possible.

Capacity planning answers big picture questions about what resource levels and skills your organization needs and what projects you can take on given the resources you have. Resource planning is all about allocating the right resources to the right projects.

The benefits of using resource planning

All organizations operate in a multi-project environment and have a finite supply of resources. They may have numerous projects in progress, various business-as-usual activities (such as support, etc.) plus other smaller pieces of work all wanting resources. To complicate things, resources are often planned onto multiple projects at the same time.

Without an effective resource planning process in place, organizations are flying blind when it comes to resource planning and allocating their resources to projects.

What tends to happen is the project manager who shouts loudest or the CEO’s pet project gets the resources at the expense of other projects.

Resource planning is an essential process in any organization that runs multiple projects. It ensures resources are effectively allocated across the projects being run.

Resource planning process and steps

A resource plan identifies which resources are working on which projects and when. It is not a detailed plan – it is used to ensure resources are effectively balanced and allocated to projects and that the project managers understand which resources and teams they are working with.

Here are the 6 key steps to build a resource plan. We use some screenshots from Kelloo to help explain the process.

List out the work and projects you want to do

In resource management, we call the required work the demand as it is the demand being made on your resource’s time.

Your resource plan should contain all the things your organization is working on. So this is not just projects but all the other things your resources do such as customer support and business-as-usual activities (BAU).

It is important that you record all the demand that is competing for your resources time. Ideally, you will already have this information to hand. If not then you will have to spend some time pulling this list together.

For each project or piece of work, you need to record:

  1. When the work is to happen.
  2. The skill sets required and required days or FTE per period.
  3. The relative priorities of the work (i.e. which projects are more important than others).

When recording your demand, you need to decide what level of detail you need to work at. For most organizations is it fine to record demand at the monthly level. But if you run very short projects weekly periods may be more appropriate.

How best to record the work required? There are two options days or FTE (you could also use hours if you need to be really accurate - but this is normally too low level for resource planning).FTE means full time equivalent- in essence it means the amount of work one full time person can do. So if we were planning at a weekly level and we wanted one person to work full time for a week, we could record this as 5 days or 1 FTE (assuming a full time person worked 5 days). If 10 days work was required in the week this would be 10 days or 2 FTE.

If we take a look at the example resource plan from Kelloo we can see a list of projects and work on the left along with the types of resources that need to do the work. And on the right a timeline showing when we want this work to happen.
Resource Planning Software

Understand your resource supply

Your resource plan needs to know about your resources and how much work time they provide your organization.

This is called resource supply.

When figuring out your supply of resources it is important to take into account other things that your resources do (things like administration and meetings) as this will likely reduce the time they have available to work on your projects.

For example, a resource may be contracted to work 8 hours per day. But they may spend 2 hours per day on other activities meaning they only have 6 hours per day to actually work on protects. When resource planning, we need to know about supply once these other things have been accounted for.

The other factor that will affect your resource supply is absence (sickness, vacations, etc). So in your resource plan, you want to take account of this also.

The easiest way to do this is to look historically and estimate how many days off people tend to have per month.

The final step is to allocate skills (sometimes called roles) to each resource. Skill will be something like project manager, engineer, etc.

When recording your resource supply it makes sense to record it in the same factor as your demand. So if your demand is in days, record your supply in days.

You will now have a resource pool showing you the resources you have and their skills and how much time they are available for work per period.

Here is how the resource pool looks in Kelloo. A neat feature in Kelloo is that as you change your resource pool (for example adding resources, entering vacations, etc) it automatically works out the new supply figures for you.

Kelloo resources pool

Allocate resources to projects and work

The next step is to allocate your resources to your projects and work. 

Here is the process to follow:

1. Start with your highest priority project.

2. Allocate the required resource supply to the project (to meet the demand) over the timescales required.

3. Reduce the supply of resources accordingly. For example, if resource “Bill” has a supply of 5 days per week and you allocate him to Project Alpha for 2 days a week, his remaining supply is 3 days.

4. Continue this process until all projects have resources allocated.

If you come to allocate a resource to a project but there is no resource supply remaining for the period you should still record the demand. This will show as an over-utilization which will highlight a problem you need to solve. Another strategy is to allocate a placeholder resource showing the skill required. A placeholder clearly shows the type of resource needed and will highlight the shortage of resource on the project.

Identify resource utilization issues and conflicts

At this point, you will normally have a resource plan with various issues that need resolving:

1. Some resources with periods of over-utilization (too much work to do).

2. Other resources with periods of under-utilization (too little work to do).

3. Projects allocated placeholder resources (due to lack of resources).

To identify the above issues, it is necessary that your resource plan clearly highlights periods where there is a gap between your resource supply and demand. The normal way of illustrating this is via a resource heat map.

We can see an example below of the heat map in Kelloo clearly showing the resources with utilization issues alongside the timeline planner in the top window.

Resource planning software

Refine your resource plan

As outlined above, your resource plan will normally show various resource issues until you have refined it:

1. Over-utilized resources and under-utilized resources.

2. Projects allocated placeholder resources in the absence of an actual resource to assign.

In addition, you may have project timescales that are unacceptable as they are running past the required delivery dates.

To solve these issues you can make changes to resource demand and resource supply.

Demand factors can be changed to reduce or increase the demands being made on resources. There are also supply side factors that can be changed to increase or reduce the supply of resources.

Demand side factors:

These are the things you can change in your resource plan to affect the level of demand in your plan:

1. Change the priority of work.

2. Change work estimates.

3. Move the work to a different period.

Supply side factors:

These are the things you can change in your resource plan to affect the level of supply in your plan:

1. Change resource levels (hire additional resources or reduce resources).

2. Increase the amount of time resources are available for work (overtime).

3. Re-allocate resources to non-project work.

4. Change which resource is allocated to work.

Evaluate different plan options

When resource planning there will always be options to consider. This is because resource planning is essentially a series of trade-offs. For example, deferring a project may mean you can squeeze another five projects in.

Trying to understand and compare different resource plan options requires the use of scenarios. These are almost like versions of a plan that can be compared to each other and outcomes reviewed.

Select scenario

Should you use software or spreadsheets for resource planning?

When starting out, most folks tend to use an Excel spreadsheet for resource planning.

This kind of works for very small teams and a limited number of projects.

But as volumes increase it will become a major headache (and very error-prone) to manage your resource planning in Excel.

Furthermore, without developing complex macros in Excel it is impossible to incorporate essential resource planning features such as what-if analysis, scenario modelling and prioritization into an Excel sheet.

Resource planning and resource planning tools provide a way to balance, spread, and allocate resources across the various projects and work you are being asked to do.

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