How to Effectively Estimate Resource Capacity against Resource Demand

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To those in the know, the need to understand resource capacity is self-evident! In the area of project management right now, there are two words that are capturing the imagination:

  • Capacity in how much do we have
  • Capability in what can they do

All one needs to do is look around, there are too many projects and not enough people. With most project driven organisations, new initiatives keep coming in without regard for other activities or whether there are enough people to do the work, let alone the right people. As a result, everything gets behind, project delivery windows are missed, and the levels of  frustration can increase day by day. And then we forget about the capacity to do other things that are important to us. And yes you guessed it, we continue in this cycle until somebody starts to talk about resource capacity planning.

Capacity planning can yield multiple benefits in making sure to reserve the most resources for the most important projects – rather than for unimportant ones. Having a complete overview of all resources and their assignments to projects and basic load; this will keep you informed about the overall resource utilization at all times is critical. Thus knowing which additional projects you can start and carry out is done by identifying resource bottlenecks in good time and being able to react to them according to corporate strategy

Now that you’re among the ones in the know, why not look into implementing or improving these vital processes. By doing so, you’ll help your organisation gain business agility, a greater capacity to innovate, and a more productive and focused set of project teams. And who can argue with that. So lets look at the steps to do this:

Step 1: Establish the Necessary Processes with the Right Staff. Different companies tend to undergo the strategic planning process at different intervals:

  • One to four times a yearfor companies developing and making products
  • Possibly monthlyfor companies offering services
  • Only on occasion for companies planning few major projects

Those involved in the strategic planning process are management with strategic targets, team leaders and heads of department who have to provide resource information, project managers who have to update running projects by the due date and the PMO preparing new projects properly and controlling the overall process.

Step 2: Ensure Complete and Up-to-Date Project Data. First, you register all projects with the essential information in a central database. This requires details such as:

  • name
  • project manager
  • sponsor
  • start
  • finish
  • traffic light indicators for status and resource requirements

For running projects, the realistic remaining effort is most relevant – based on the current situation. For new projects, it is necessary to meet the minimum requirement for resource planning. This means you have to plan all required skills – not necessarily persons – per month or quarter. It is definitely not enough to look only at the total work without the distribution over time.

Step 3: Identify the Actually Available Capacities. It does not make sense to analyze each person individually. While this would be desirable, it would be too much effort. It would be confusing, too. Displaying the total capacity of all employees in one ch

art is not wise either. Employees have different skills which you have to deploy as required. A clear and sensible level of detail can be obtained by consolidation at skill level. Some companies also form teams according to skills. In so

me circumstances, this permits planning at the level of these teams. In most cases, this is easy to implement. The level of detail regarding the skills should bear relation to the effort. The planning must remain easy to understand at all times. The above principle also applies here: as rough as possible, as detailed as necessary.

Step 4: Consolidate Capacities and Requirements. Both the capacities of the skills and the requirements from the projects are at hand. Now, you have to examine how these fit together. In order to control them, all skills and their utilization have to be view able on one page in an appropriate way. After all, a project usually involves various skills. With every change you make, the effect on all skills should be visible at once. This requires the appropriate resource diagrams showing multiple skills on one screen

No matter whether they are about bringing in external resources or postponing projects: The decisions remain human decisions. But you should always make them based on the best possible data. To obtain this data, you need suitable software tools. Without the appropriate tool support for strategic resource planning, you will find the tasks involved hard to master.



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