In project-based organizations, proper resource capacity planning is the technique that ensures efficient resource utilization, timely project delivery, and minimizes the risk of cost overruns. But despite its importance, a great number of organizations face challenges when planning their resources for current and future projects.
Read the article to explore the typical resource capacity planning challenges and how specific capacity planning tools can help overcome the difficulties.
Top 5 Challenges of Resource Capacity Planning
Resource capacity planning bridges the resource demand coming from projects and the available supply. In other words, it answers the questions: Do we have enough skilled resources to complete projects? Are we utilizing resources efficiently? Can we add one more project to the current environment without overloading the resources?
In many cases, resource capacity planning becomes challenging. Let’s consider the main difficulties that companies face.
Challenge #1. Poor visibility into resource-related data
Accurate and relevant resource-related data (resource availability, capacity, workload) is critical for performing capacity planning effectively. At the same time, many organizations still rely on spreadsheets or disconnected tools to keep and manage this data. Of course, this can make resource capacity planning ineffective, as these tools don’t provide a full picture of people’s availability and capacity.
What can you do about this?
To overcome this challenge and keep this data in one place, companies can use centralized resource management systems. Also, you should make sure that this data is updated regularly, either manually or automatically.
Challenge #2. Conflicting priorities.
In multi-project environments, projects often share the same resources. Without comprehensive visibility and effective prioritization, this can result in unavailability of required resources, overallocation of employees, and project delays.
What can you do about this?
You should establish effective prioritization mechanisms for projects: e.g., based on business value, resource availability, or other parameters. Also, you can use capacity planning tools with predictive capabilities: they can forecast resource demand and identify bottlenecks, which will prevent resource conflicts.
Challenges #3. Overload and burnout.
In a multi-project environment, improper resource capacity planning can lead to overbooking employees and overloading them with work. As a result, they become stressed, lose productivity and engagement, and can make mistakes that require rework and cause delays. The most harmful thing is that even one overloaded employee can hamper the work of their colleagues, which will lead to delays across the entire project environment.
What can you do about this?
First of all, you should prioritize projects. “Everything is important” kind of mentality is the main reason for excessive workloads and burnout. Also, you should leave some capacity for non-project activities and unplanned work – this is called a capacity buffer.
Challenge #4. Inaccurate forecasting.
Forecasting future demand for resources is a critical component of effective resource capacity planning. However, doing it accurately is not that simple as it seems, especially when you work with large amounts of data. Also, there’s always uncertainty about the future, and you cannot plan for every factor that can affect resource availability.
What can you do about this?
Use capacity planning tools with forecasting functionality; they can quickly analyze massive amounts of data and make accurate predictions.
Challenge #5. A lack of flexibility.
You can never predict every change and uncertainty that can occur and affect resource availability in a multi-project environment: a shift in customers’ demand, employee illness, project scope changes, etc. The key to smooth project flow and effective work of resources is flexibility – you need to be prepared for possible changes and respond to them properly. Otherwise, these changes will turn your project environment into chaos.
What can you do about this?
Establish time and capacity buffers when planning projects and resources. Remember that you cannot assign tasks for 100% of a person’s capacity and should leave some buffer for unplanned events and changes. Finally, performing scenario simulations will help you prepare the most effective responses for possible risks, changes, and uncertainties.
As you see, overcoming the capacity planning challenges is almost impossible without the right capacity planning tools. Let’s consider their impact in more detail.
Overcoming Resource Capacity Planning Challenges with Capacity Planning Tools
Here are the key capabilities that facilitate effective resource capacity planning.
- Providing comprehensive visibility: Capacity planning tools keep the data on employees’ skills, capacity, and availability, which is essential for effective capacity planning – project and resource managers can quickly identify who is available.
- Resource allocation: Capacity planning tools can use the above-mentioned data plus the information on location, experience or other essential attributes to suggest the right person for completing a certain task, says LinkedIn.
- Forecasting capacity and workloads: Capacity planning tools can provide insights into resources’ future capacity and workload distribution, which makes capacity planning more accurate.
- Workload management: Resource capacity planning software can identify periods of imbalanced workloads and suggest ways to adjust the situation.
- Scenario analysis: AI-driven capacity planning solutions can help you run simulations and address a variety of issues most effectively; you can see what happens if you reallocate resources, add or remove projects, move the due date, etc.
These capabilities make capacity planning tools invaluable helpers of project and resource managers striving to succeed in resource capacity planning.
The functions that we’ve reviewed are available for users of Epicflow, a multi-project resource management tool with capacity planning capabilities. It focuses on achieving resource efficiency across multiple projects, resolving bottlenecks, and delivering every project successfully.
Conclusions
The importance of effective resource capacity planning cannot be overestimated for successful project delivery, efficient utilization of resources, and achieving strategic growth. But at the same time, performing it effectively is rather challenging. For example, it can be caused by a lack of visibility, inaccurate forecasting, improper workloads, and conflicting priorities. One of the main prerequisites for overcoming these challenges is leveraging capacity planning tools. Their capabilities provide comprehensive assistance with forecasting, resource allocation, workload balancing, and decision-making.
