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?
Before we go any further let me explain that we are talking about resource planning of human resources – not enterprise resource planning / ERP.
Resource planning is all about figuring out if you have the right number of resources with the right skills mix to deliver on the projects, programmes and business as usual work you have coming up.
Why do resource planning?
Quite simply, without an effective resource planning process in place, organizations are flying blind when it comes to resource availability. In most organizations, people are the biggest expense and planning resource levels effectively can make a massive difference to outcomes.
How to create a resource plan
Let’s look at what a resource plan contains and also pin down some terminology.
Demand. 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). We call this demand. It is important that you look at all the demand that is competing for your resources time.
The demand should then be tagged to indicate the status of the work (i.e. currently being worked on, requested, approved etc). This will help us when we try to optimize our resource plan as we are more likely to delay work on projects that have not yet started yet.
Finally, for each piece of demand we need to know what “type” of resources are needed to work on it (i.e. the required skill) and how much time they need to work on it (the work estimate).
Supply. Your resource plan needs to know about your resources and how much work time they provide your organization. We call this 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).
So while a resource may be contracted to work 8 hours per day, 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. Most resource planners will use historic trend values to incorporate these into the resource plan.
Finally, the resource supply should be categorized by skill so we can understand the resource levels we have for different skill sets.
Priorities. A resource plan should be organized by priority as the highest priority work should be where we deploy our resources to first.
Once we have a list of the demand, our resource supply worked out and our priorities, we are in a good place to put our resource plan together. Your resource plan wants to highlight the differences between your resource supply and demand. If your supply exceeds your demand, you need to reduce headcount or take on more work. If your supply is less than your demand you need to increase headcount or put work on hold.
Resource planning what if (scenario modelling)
Within our resource plan there are various “levers” we want to be able to pull to see how different things will affect our resource planning outcomes. This is typically called what if analysis or scenario modelling and without this your resource plan is not really going to reflect real life. Things change and you need to be able to run the slide rule and see how these changes will affect your outcomes So examples of this might be that we want to see what impact hiring 5 more project managers may have, or putting our biggest project on hold.
So what are the types of levers we can pull?
- Change priority of work
- Change work estimates
- Hire or fire staff
- Staff work more or less hours
Where to build your resource plan
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 amount of demand. 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 what if and scenario modelling, into an Excel sheet. So that is why using a dedicated resource planning tool such as Kelloo can accelerate your resource planning.