I think it is fair to say that any folks reading this will know what project planning is and how to build a project plan.
But how clued up are you when it comes to resource planning and building a resource plan? And the differences between resource planning and resource capacity planning (hint – they are different!).
What is resource planning?
Resource planning is a resource management technique which helps you ensure you get the right people working on the right projects.
It involves balancing and allocating resources between multiple projects so that the resourcing requirements of the projects are met.
It is used to work out how best to allocate your resources to the projects you want to do to ensure:
- The most valuable projects get resources allocated first.
- Resources are not over-utilized or under-utilized.
- Project managers understand which resources are going to work on their projects.
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.
For a deeper dive into the differences between resource planning and capacity planning look at this article.
Why do resource planning?
The simple answer is that all organizations operate in a multi project environment and have a finite supply of resources.
They may have 20 projects in progress, various business as usual activities (such as support etc.) plus other smaller pieces of work all wanting resources.
Traditional project planning tools (such as MS Project) assume you are dealing with one project at a time. Which is plainly not the case.
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.
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 favorite project get the resources at the expense of other projects.
How to create a resource plan?
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.
1. 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 resources 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:
- When the work is to happen.
- The skill sets required and required days or FTE per period.
- The relative priorities of the work (i.e. which projects are more important than others).
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 who need to do the work. And on the right a timeline showing when we want this work to happen.
2. 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 resource it is important to take into account other things which your resources do (things like administration and meetings) as this will likely reduce the time they have available to work on your projects.
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 final step is to allocate skills (sometimes called roles) to each resource. A skill will be something like project manager, engineer etc.
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.
3. 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 the 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 resource allocated.
4. 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 resource).
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.
5. 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 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 which 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 resource or reduce resource).
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.
6. 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.
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.