So you are sold on the idea of implementing a capacity planning process. Here we share our experience on best practices you should incorporate into your capacity planning.
Set up a centralized system
As easy as it appears to set up a resource planning spreadsheet, the downsides quickly exceed the upsides. Resource planning is a collaborative process that involves the sharing of information and spreadsheets are not an ideal tool for this. Even small organizations often have more than one person responsible for resource planning, which leads to separate spreadsheets per team or location and silos of information. Finally resource planning spreadsheets necessitate repeating formulas per project and resource type. It is too easy to make mistakes that are impossible to spot. It is far easier, safer and more cost effective to use a dedicated resource planning solution.
Ensure you capture all of your demand and overheads
A common mistake organizations make is to fail to account for all of their demand and overheads. It is essential that your resource plans include all the work your resources are expected to work on. This means both currently approved and in-flight work and work in your pipeline.
Don’t get too detailed
The purpose of a capacity plan is to give the organization a heads up about its capability to deliver on existing work and take on new work. It is not concerned with which individual resource is working on what project or task on which day. For most organizations the capacity plan should be working at the resource role (skill) level and for each project record the resource roles needed by month.
Account for holidays, vacations and absence
When calculating the capacity of your resources don’t forget about absence time. As it is impossible to predict months in advance what absence people will have, the easiest way to model this is using trends.
Show me the money
In many organizations there could be different resources with the same resource role who could perform the same work. What often differentiates them is the cost to the organization. So you should be able to visualize your resource plan in terms of money to help you make sense of these options.
Allocate resources to the highest priority projects first
Wherever possible, resources should always be allocated to mandatory (i.e. regulatory / compliance) projects first. Then in turn to the highest priority projects in the portfolio (continuing until you run out of projects or resources). So it is essential that a prioritization technique is used alongside the capacity planning.
Shout about the benefits to all
The benefits of resource capacity planning impact all people in the project environment. Better forecasting of resource needs mean resources are less likely to be over worked or handed impossible deadlines. Project managers are more likely to have the required levels of resource they need to deliver their projects. Resource managers will have less headaches trying to juggle and allocate scarce resources to projects. Executives can better align their strategic vision with the organizations ability to actually deliver it.
Incorporate into the portfolio management process (PPM)
Ideally capacity planning should be performed alongside your organization’s portfolio management as they feed information into each other. If your organization does not operate a full PPM process, even just adopting basic principles such as a project approval process, basic prioritization criteria and regular monitoring of the portfolio health will help.