Improving project resource management and capacity planning

Jerry Manas
July 8, 2013

Top pain point is “constant change”. This is followed by “not enough visibility into capacity” and “ineffective demand prioritisation.” Lower maturity organisations have less insight into demand, making project prioritisation challenging.

Top business risks are “lost productivity” and “remaining in crisis mode”.
The risk of remaining in crisis mode, which leads to stress, haphazard resource assignments, and a project portfolio in chaos, reduces by half or more as organisations move up the maturity spectrum. “Delayed time to market” and “wasting high-value resources on low-value projects” tied for the third-highest business risk.

Mature organisations use software. More than 60% of mature organisations use enterprise software, and in particular project portfolio management (PPM) solutions, better enabling them to select the right opportunities and match the right people to them. By contrast, nearly 70% of less mature companies use spreadsheets and standalone project management software as their primary tools, making basic visibility into demand or capacity challenging.

Here’s what one of the survey participants said about the benefits of moving from spreadsheets to software: “When we decided to put in enterprise software (for resource management and capacity planning) we had way too many projects for the number of people we have. We were using spreadsheets and company-wide we had about 80 projects and a widely dispersed team. Our primary goal was resource management and we needed a better idea looking forward on what projects they needed to work on. Our goal now is to automate financial and return analysis into our financial systems and roll the cost back to groups. Once we do that, we consider our organisation at an ‘optimised’ maturity level.”

Mature organisations share characteristics

According to the study, mature organisations share characteristics and best practices that enable them to optimise their resources in support of high payoff opportunities for their businesses. These organisations:

  • Have resource management and capacity planning functions (or roles) at the company.
  • Have enterprise software and more specifically PPM software to manage resource management and capacity planning.
  • Agree that the top three best practices are: prioritisation; ability to perform what-if analysis; and management buy-in.
  • Are better at estimating projects and have more effective processes in place than lower maturity levels.
  • Use both a top-down and bottom-up approach to capacity planning and resource management, allowing everyone in the organisation to share responsibility for resource management.
  • Have the ability to see clearly what resources are working on, identify bottlenecks, and run scenarios on-demand to adapt to change.

As the study shows, companies can move up the maturity scale by adopting these best practices. Probably the biggest takeaway is the relationship of having a resource management and capacity planning function to success. Clearly this is not an area to ignore or minimise.

Regardless, success does not come overnight. A wise approach is required.

One of the study respondents summed it up best: “Our pearls of wisdom for someone just starting out is to be realistic and don’t boil the ocean. Have an overall vision for your resource management and capacity planning approach and decide how to attack it. If you can find a few people doing it well on spreadsheets, get them involved in your proof of concept for implementing enterprise software to help champion it, start small and be successful. Then move on up the maturity model.”

Fortunately, the study illuminates the path by highlighting the practices that have helped others climb the maturity ladder. In this way, it serves as a blueprint for improving resource management and capacity planning. And if there’s one thing I’ve learnt over the years, it’s to never try to achieve a lofty vision without a blueprint.

Author avatar
Jerry Manas
Jerry Manas is the author of the bestselling books Napoleon on Project Management and Managing the Gray Areas. Throughout his career as an author, speaker, and consultant, Jerry has built a reputation for taking complex information and processes and making them clear and accessible. As senior editor at Planview, he applies this passion to developing best practices that help organisations achieve breakthrough performance across a framework of processes and roles.
Read more