Part one of our ultimate guide to resource planning looks at a common question – what is resource capacity planning?
What is Resource capacity planning?
First let’s clarify what we mean by resources. In the context of resource capacity planning we are talking about human resources and not things like machines, equipment etc.
Resource capacity planning is a process organizations use to determine the resources they need to perform the work they want to do. The goal being to understand if they have sufficient resource and if they do not to allow them to make decisions about hiring resource, deferring or re-prioritizing work. Cool idea hey – just like checking you have enough money in your pocket before trying to buy a drink from a store.
Compare demand vs. supply
Two terms often crop up when talking about resource capacity planning – demand and supply. So it would be helpful to explain these terms. Supply (also known as capacity) records the total number of resources you have available through a time period. Commonly this is summarized by skill type and month. On the flip side, demand records the work that resources are required to do. Again this is normally recorded by skill type and month. Look at the variance between your supply and your demand and you will know if you have a problem.
An organization has 10 engineers. They currently have 20 projects underway and another 5 they are being asked to start up. Management need to understand if they can perform all this work. They know that each engineer can work on two projects at a time. So to work on 25 projects they will need 12.5 engineers – so they need to hire engineers, delay or defer some of the planned work.
Capacity planning vs resource planning
The terms capacity planning and resource planning are often used interchangeably. However they are different processes with different outputs. Capacity planning has a longer term focus on resource levels and what work the organization has the capability to do. Resource planning is concerned with which resources will be working on what projects. This article what is the difference between resource planning and resource capacity planning explores this in more depth.
Ready to read more? Then continue onto chapter two which looks at the benefits organizations gain by implementing effective capacity planning processes.