Resource capacity planning and portfolio management

The ultimate guide to resource capacity planning_chapter_6

In part 6 of our guide to resource capacity planning learn how to incorporate capacity planning into the portfolio management process.

Create a project inventory

First step is to gather up information on all your current and planned projects and the number and type of resources they will require. This should be a simple process if you have a PMO keeping track of things. If not then a bit of “digging around” will be required to gather this information. For each project assign an approval status i.e. requested, under consideration, approved, rejected, started and completed.

Evaluate projects

The next steps involve taking the list of projects and vetting the projects to sift out any that have questionable value, are too vague or do not have sufficient detail behind the proposals. At this stage you should also identify any projects that have to be done for perhaps regulatory compliance reasons.

When evaluating projects the review should also attempt to identify projects that overlap or projects that naturally would fit together.

Prioritize your projects

After the evaluation stage, most organizations will still end up with more projects than they can actually fund. So the next step is to take your list of projects and prioritize them.

There are many different approaches to project prioritization and explaining the different methods in detail is outside the scope of this article. You can use easy relatively simple metrics like CD3 or more encompassing methods which score projects on a number of criteria such as strategic alignment, cost reduction, regulatory compliance etc. However, whatever method is chosen it should be easy for people to understand and use.

Using your project prioritization criteria and your list of projects (current and planned) next prioritize your projects. The output of this process should be a clear list of prioritized work.

Resource capacity planning

Now you have your list of prioritized work, the next step is to compare this to your resource capacity. Resources should be assigned to the highest priority projects first before assigning remaining resources to the lower priority projects. Eventually as each project in turn is allocated resource you will get to a point where you can no longer fit in any project work. Essentially a line has been drawn between the projects we can do and those we cannot based on resource capacity.

Optimize the resource plan

At this stage the power of resource planning tools like Kelloo really come to the fore. Your initial resource capacity plan ranked by priority will probably not be particularly well optimized in terms of resources.

There will be resource roles who are under-utilized and those which are over-utilized and shifting work between them or changing the resource levels within roles can make a drastic impact on your plan. Simple changes like changing the sequencing of projects can also make a big impact. So at this point you want to model changes to your plan to improve utilization, shorten delivery dates and reduce costs. It may even be possible to squeeze in additional projects.

Decisions that can be made at this stage include:

  • Should we hire more resources?
  • Can we deploy underutilized resources onto other projects?
  • Can we change the sequence of projects to improve things?
  • To understand the impact of any portfolio changes they will need to be modelled and the capacity analysis checked again.

Ongoing portfolio management

Capacity planning and portfolio management is not a one-time exercise so a process then needs to be established for the ongoing review and update of the portfolio and capacity plan.

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