Enterprise Resource Capacity Planning
Enterprise resource capacity planning is a high priority for most businesses. The information provided in this article will help in optimizing your resource management, allowing you to run your business as effectively and efficiently as possible.
What is Resource Management?
Simply stated, resource management is the effective and efficient allocation and deployment of an organization’s resources, when and where they are needed. Coordinating resources can be challenging. However, when businesses master this skill, many benefits are noticeable.
Benefits of Resource Management
Resource Visibility
Resource visibility gives businesses the ability to see where people are placed versus where they actually are. Having this capability helps companies make decisions. Without it, businesses may lack the knowledge to determine if they have the capacity to fulfill commitments they’ve undertaken. Resource visibility promotes making informed and strategic commitments.
Increase Business Value
By incorporating good business management practices into the overall project intake and demand process, organizations can ensure they are getting the best out of their resources.
Save Time and Money
Effective resource management can lead to greater efficiency. It helps save time and money by avoiding duplication of efforts or using inappropriate resources for certain tasks. Optimizing resource allocation can make jobs easier, quicker, and cheaper, leading to more cost-effective delivery.
Increase Project Success Rate
Making better commitments based on accurate representation of resources can increase the project success rate. By making better-informed commitments, organizations can achieve targets more often. Missing targets often occurs because of overcommitments, which can be prevented through improved resource management.
Accommodate Demand
Effective resource management allows businesses to decide how to best utilize resources as new tasks come in. Sometimes, that means suspending current activities to prioritize something more important. This ensures that resources are directed toward high-priority tasks.
Employee Satisfaction
Improper resource management can lead to high employee turnover due to burnout from overuse. Ensuring proper management of resource allocation can improve employee satisfaction by avoiding overworking.
Challenges of Resource Management
Like most things, benefits often come with challenges. Below are some common challenges organizations face in resource management:
Resource Ownership
In a highly matrixed structure, functional managers own the resources, but project managers need these resources to fulfill projects. Effective resource utilization requires negotiation and allocation between the functional and project managers.
Resource Focused Allocation
Organizations receive demands from different places, requiring resources to focus on strategic or operational tasks. Determining which focus should take priority can be challenging, but resolving this issue is crucial to business success.
Non-Project Workload
Non-operational work, such as administrative tasks, often takes priority and siphons resources away from projects, affecting business efficiency.
Resource Tracking
Scheduled resource allocation does not always match actual utilization. Tracking how time and effort are spent helps identify where adjustments are needed. Without effective tracking, resource utilization suffers, resulting in wasted time and money, along with employee dissatisfaction.
Manual Reporting
Manual reporting is time-consuming and often wastes effort that could be spent on higher-value activities.
Too Much Information
Overcomplicated resource management data can overwhelm people and lead to inefficient decision-making. Avoiding unnecessary data overload is key to effective resource management.
Steps to Resource Management
Here are five steps to effective resource management:
- Resource Capacity Planning – Assess how much of a resource you have and how much is needed to fulfill commitments.
- Resource Allocation – Break a project or initiative into specific work elements and assign them to individuals, allowing better understanding of task ownership.
- Resource Work Management – Manage both production and operational sectors to improve business efficiency.
- Teamwork Management – Enhance team dynamics to improve task delivery as a group, increasing overall efficiency.
- Personal Work Management – Provide individuals with resources to become more effective in prioritizing and delivering work assigned to them.
Maturity Models of Resource Management
There are three maturity stages for resource management:
Crawl Stage
This stage includes basic resource allocation and capacity planning. It also involves prioritizing projects and programs and defining high-level project roles.
Walking Stage
Resource capacity planning meets refined demand requirements, including detailed resource allocation, skill matching, and proper assignment duration.
Run Stage
This stage focuses on team dynamics, human resource management, project performance monitoring, and encouraging personal productivity.
Resource Management Dimensions
Roles
Resource planning depends on the roles and resources available. Understanding the input required to achieve desired output is crucial.
Planning or Tracking Granularity
Granularity plays a role in data sustainability. The organization must determine if they can maintain the capacity level over time.
Resource Costs
Track resource costs to understand the implications and determine if the expenditure is resulting in the best outcomes.
Forecasting Compared to Actuals
Compare forecasted data with actual results to ensure accuracy and better decision-making for future projects.
Governance and Prioritizing
Prioritize resources to ensure projects that yield the most benefit take precedence. Effective governance maximizes resource return on investment.
Approval and Negotiation
Approval and negotiation between project and functional teams ensure that resources are properly allocated to projects with clear priorities.
Balancing Top-Down with Bottom-Up
Effective resource capacity planning involves balancing top-down project plans with bottom-up execution. Good communication is essential for reconciling these perspectives effectively.
Understanding Resource Capacity
Understanding resource capacity involves reconciling resource availability with demand:
Capacity Examples:
- How many people are available to work on a project?
- For how long are they available?
- What roles will they fulfill?
Demand Examples:
- Number of resources needed for project completion.
- Prioritizing projects.
- Allocating resources based on roles and priorities.
Next Steps of Resource Management
- Understand your business’s readiness.
- Understand your resource management maturity.
- Understand the environment in which you are working.
- Build a resource management roadmap.
- Develop a practical action plan to move to the next maturity level.
- Define your process first, then automate in a solution.
How Organizations Manage Resources Today
Excel is a common tool for resource management, but it comes with limitations:
- Manual and static model.
- Easy to break formulas.
- Lacks standards.
- No dynamic visibility of resource capacity.
- Disconnected from project management information.
Alternative options to Excel include:
- Embedded processes for non-fragmented data.
- Centralized database storage.
- Actionable intelligence for accurate decision-making.
OnePlan: Connecting Strategy to Execution
OnePlan offers strategic portfolio, financial, and resource management solutions tailored to PMO needs. It is easy to use, integrates with Microsoft Project, Office 365 Planner, Azure DevOps, Jira, and more, providing a complete enterprise work view.
How OnePlan Can Help In:
Visual Resource Capacity Planning Within Projects
- Detail time-phased resource estimates.
- Plan from ideation to execution.
- Provide accurate information, such as FTE, percentage, and hours.
- View existing commitments and demand during planning.
Resource Capacity Planning Organization-Wide
- High-level capacity and demand management with a visual user experience.
- See proposed and committed resources across all projects.
- Balance resources with drag-and-drop reassignments.
- Match resources with project requirements by role, skill, and availability.
Leverage for Strategic Portfolio Analysis
OnePlan enables modeling different scenarios to determine the best strategic path, weighing proposals against business drivers and constraints.
Financial Planning
- Flexible cost types and categories.
- Track original estimates, budgets, and actuals.
- Time-phased costing.
- Integrate with ongoing project execution.
Dynamic Reporting and Analysis
OnePlan provides visibility through reporting and analytics, enabling effective capacity planning, efficiency monitoring, and compliance improvement.
The Bottom Line
- Resource management is crucial for PPM success.
- Approach and process should align with organizational readiness and maturity, creating a clear roadmap.
- High-level capacity planning helps identify business demand and capacity.
- OnePlan offers a superior platform for PPM compared to Excel.
- OnePlan extends planning capabilities and supports top-down strategic analysis.
- Embedded into the Microsoft Cloud, OnePlan provides actionable intelligence for informed decision-making.
