What Is Resource Planning? The Complete Guide

10 min read

Are you struggling to allocate your company’s most valuable assets efficiently? Resource planning is the key to optimizing your workforce, finances, and materials. 

In this comprehensive guide, we’ll take you on a journey through the world of project management resource planning, from its fundamental principles to advanced strategies. 

Discover how to succeed by using resources effectively. Ignite productivity, drive profitability, and achieve operational excellence. 

Let’s start with a definition of resource planning.

What is resource planning?

Resource planning is a strategic process that organizations use to effectively manage and allocate their critical assets to achieve their project goals and objectives. These assets can encompass a wide range of elements, including:

  • Human resources
  • Financial capital
  • Equipment and technology
  • Time
  • Materials

At its core, resource planning is about making informed decisions on deploying resources efficiently, ensuring that they are used optimally to meet project deadlines, financial targets, and operational needs. 

This process involves assessing current resource availability, forecasting future requirements, and devising strategies to bridge the gap between supply and demand (to better avoid resource constraints).

Planning resources is not limited to a single department or function within an organization; instead, it permeates various levels and departments, from human resource management to financial planning and project management. It is a holistic approach that takes into account the interplay of resources across the entire organization.

The ultimate goal of resource planning is to enhance an organization’s ability to make better decisions, improve productivity, minimize wastage, reduce costs, and achieve strategic objectives. 

By aligning resources with an organization’s overall strategy, resource planning becomes a powerful tool for achieving sustainable growth and competitiveness in today’s dynamic business environment.

Now that we’ve explored what resource planning entails, let’s dive into how it differs from resource forecasting.

What is the difference between resource planning and resource forecasting?

Resource planning and resource forecasting are two essential components of effective resource management. While closely related, they serve distinct purposes within an organization’s operational framework. 

Resource forecasting primarily focuses on predicting future resource needs based on historical data, trends, and projections. 

It involves analyzing past resource usage and external factors impacting resource demand. Resource forecasting answers questions:

  • How many hours of specialized workforce will be required in the upcoming quarter to complete critical project tasks?
  • How many subcontractors or external consultants will be needed for specialized project tasks in the upcoming quarter, and what qualifications should they possess?
  • What training or skill development programs should be scheduled for team members in the next quarter to meet project requirements?

Pro tip: If you’re searching for a compelling project management certification to enhance your career prospects, we have compiled a comprehensive list of project management certifications.

  • How much money should be allocated for a specific project over the next fiscal year?
  • Are there any potential resource bottlenecks or constraints that need to be addressed in the project plan, and if so, how can they be mitigated?
  • What are the anticipated resource costs associated with project execution, and how can they be managed to stay within budget?
  • Considering historical data, what fluctuations in resource demand are expected for the next quarter, and how can we proactively address them?

Resource forecasting provides organizations with a forward-looking view of their resource requirements. It helps management to anticipate potential resource shortages or surpluses and allows for proactive planning to meet future demands. 

However, resource forecasting alone does not address how to allocate and manage resources effectively; that’s where resource planning in project management comes into play.

Resource planning is a broader and more proactive process that involves predicting resource needs and making decisions on allocating and using resources efficiently. 

It aims to align available resources with organizational goals and strategies. Planning of resources answers questions like:

  • How should we distribute our workforce to various projects to maximize productivity and meet deadlines?
  • What is the optimal budget allocation for different departments to ensure financial stability and growth?
  • What strategies can balance the workload across different departments or teams to optimize resource utilization?
  • Are there any upcoming skill gaps within the workforce, and how should we address them through training or recruitment?
  • What measures can be implemented to prevent resource conflicts and ensure smooth collaboration between teams working on multiple projects?
  • What contingency plans should be in place to address unexpected resource shortages, such as a sudden increase in project demands?

Resource planning transforms the insights gained from resource forecasting into actionable strategies. It involves making informed choices about resource allocation, scheduling, and prioritization to optimize resource utilization and achieve desired outcomes.

Now that we’ve clarified the distinction between resource planning and resource forecasting, let’s examine how project resource planning differs from capacity planning.

What is the difference between resource planning and capacity planning?

While resource and capacity planning are often used interchangeably, they represent different facets of project resource management. Let’s discover their differences.

Resource planning focuses on the “who” and “what” aspects of project resource management, ensuring that personnel and materials are in place to meet project objectives.

Key aspects of planning resources in project management include:

  • Resource allocation: Assigning specific resources to project tasks, considering their skills, availability, and suitability for the job.
  • Resource scheduling: Creating a timeline that outlines when each resource will be utilized during the project’s life cycle. We recommend using PPM Express with its roadmap feature.
  • Resource optimization: Maximizing resource utilization while minimizing waste and downtime, which can contribute to project delays and increased costs.

On the other hand, capacity planning is a subset of project management resource planning that specifically addresses the capabilities and limitations of resources, primarily human resources.

Capacity planning answers the question, “Do we have the capacity within our workforce to take on additional projects or tasks?” It assesses the workforce’s ability to handle workloads and responsibilities (consider using the RACI framework) effectively.

Key aspects of capacity planning in project management include:

  • Workforce assessment: Evaluating the skills, expertise, and availability of the project team to determine if they can accommodate additional work.
  • Resource constraints: Identifying bottlenecks and limitations within the existing workforce that may impact the ability to take on new projects or tasks.
  • Resource balancing: Ensuring the workload is evenly distributed among team members to prevent burnout and maintain productivity. Utilizing one of 200+ pre-built Power BI dashboards in PPM Express for resource management is highly beneficial.

Capacity planning is crucial for avoiding the overloading of resources, which can lead to lower-quality work, missed deadlines, and employee burnout.

Pro tip: It’s also crucial to continuously enhance your team’s productivity, particularly in remote settings. We have a guide on managing remote teams for you to explore.

Now that we’ve established the fundamentals of resource planning, let’s explore the key phases involved in the process.

How can you create a resource plan in 6 steps?

Resource planning is a systematic process involving several phases to ensure an organization efficiently allocates and manages its resources. 

Here, we will explore the typical stages of resource planning:

1. Assessment and analysis form the foundation of resource planning in project management, where organizations meticulously identify their resource needs and inventory their existing assets. 

This phase sets the stage for effective resource allocation and utilization by offering a clear picture of which resources are available and what the organization requires.

  • Define your objectives: Start by clearly outlining your organization’s objectives and key results, and goals for the upcoming period. Be specific about what you aim to achieve, whether launching a new product, completing projects, or achieving financial targets.
  • Identifying resource needs: The next step is identifying the types and quantities required to support organizational goals and projects. This involves assessing current and future resource demands as a part of capacity planning.
  • Resource inventory: Organizations take stock of their existing resources, including human resources, equipment, materials, and financial assets. This inventory helps in understanding what is readily available. Consider using the resource breakdown structure to clarify the resource inventory.

2. In the forecasting phase, resource planners leverage historical data and predictive analysis to anticipate future resource demands and supply (commonly connected and called resource forecasting). 

Accurate forecasting is essential for proactively addressing resource needs and ensuring the organization can meet its objectives.

  • Demand forecasting: Resource planners use historical data, market trends, project requirements, and other relevant factors to forecast future resource needs. This involves predicting resource demand over a specific period, which is crucial for proactive planning.
  • Supply forecasting: In addition to demand forecasting, organizations assess the availability of resources. This includes estimating how many resources will be available based on hiring plans, procurement, and resource utilization.

3. Resource allocation is when organizations align available resources with identified needs, making critical decisions about which projects or departments receive specific resources based on priorities and constraints. 

It’s a strategic process that directly impacts the successful execution of projects and initiatives.

  • Prioritize projects and tasks: Evaluate the importance and urgency of each project or task with your objectives. Prioritize them based on their impact on achieving your goals. Use criteria like ROI, strategic alignment, and criticality.
  • Resource allocation: This phase involves aligning available resources with the forecasted demands. Resource planners decide which projects or tasks will receive specific resources based on priorities, skills, and constraints. Utilize PPM Express for precise resource allocation.
  • Budget allocation: Allocating financial resources is a critical aspect of resource planning in project management. Organizations determine how much budget will be assigned to different departments or projects based on their strategic importance and resource requirements.

Pro tip: Struggling with budget management? We can assist you with our project budget management guide.

4. Scheduling is the practical implementation of resource allocation, creating timelines that specify when and how long each resource will be utilized in various tasks or projects. 

Effective scheduling ensures that resources are optimally utilized, and project timelines are met.

  • Resource timelines: Once resources have been allocated, the next step is to create a timeline or schedule for their utilization. This includes determining when and for how long each resource will be engaged in specific tasks or projects.

Pro tip: In search of a Gantt chart tool to create an aesthetically pleasing and practical project schedule? We have a list of 36 Gantt chart tools for you to explore.

  • Resource load balancing: Avoiding resource bottlenecks and overallocation is essential. Load balancing (resource leveling and smoothing) ensures that resources are distributed evenly to prevent burnout and delays.

5. In the monitoring and adjusting phase, resource planners continually evaluate resource utilization and project progress, making real-time adjustments as necessary. 

This ongoing assessment allows for Agile resource management and optimization.

  • Continuous evaluation: Resource planners continually monitor resource utilization, project progress, and changes in resource requirements. This ongoing assessment allows for adjustments to be made as needed.
  • Resource optimization: Organizations strive to optimize resource usage by identifying inefficiencies, reducing waste, and making real-time resource allocation adjustments to meet evolving project needs.

6. Reporting and documentation are vital for transparency and accountability in project resource planning. Organizations maintain records of allocation decisions and create project reports that provide stakeholders with insights into resource utilization and alignment with strategic goals, facilitating informed decision-making and future planning.

  • Documentation: Maintaining records of resource allocation decisions, schedules, and performance metrics is crucial for accountability and future reference.

Pro tip: Struggling with documentation? Use ChatGPT and our extensive prompt library to assist you.

  • Reporting: Resource planning reports provide stakeholders with insights into resource utilization, project status, and alignment with organizational goals.

Now that we’ve outlined how to create a resource plan, let’s explore why using a resource planning template can be beneficial, with a practical example included.

Why should you consider using a resource planning template? [With resource plan example]

To facilitate the resource planning (and resource management) process, consider using resource management templates. These offer several advantages:

  • Consistency: Templates provide a standardized structure for resource management plans, ensuring that essential elements are consistently included and organized. This consistency helps in clear communication and understanding among team members and stakeholders.
  • Time savings: Creating a resource management plan from scratch can be time-consuming. Templates offer a ready-made framework that allows you to focus on customizing the plan to your specific project or organizational needs, saving valuable time.
  • Best practices: Many project resource management plan templates incorporate industry best practices and proven methodologies. By utilizing such templates, you can benefit from established techniques and guidelines for effective resource planning.
  • Efficiency: The resource plan template streamlines the planning process, making it more efficient. They prompt you to consider critical factors and provide prompts for gathering necessary information, reducing the chances of overlooking important details.
  • Adaptability: Resource management needs can vary between projects and organizations. A well-designed template can be customized to suit your unique requirements while still adhering to the core principles of resource planning.

We have developed a comprehensive resource planning Excel template to aid you in your resource management endeavors. 

This template is designed to help you create a structured and effective plan for planning and managing your organization’s valuable resources. In a user-friendly format, it covers key aspects of resource planning, including resource allocation, utilization, and project monitoring.

Pro tip: In addition to the template, we highly recommend using PPM Express features to streamline your planning and execution phases.

Now that we’ve outlined the steps for creating a resource plan and helped you with our resource planning template (Excel-based), let’s examine the consequences of not planning resources effectively.

What happens when you don’t plan resources?

A lack of resource planning can have significant repercussions on both short-term and long-term success. 

Failing to plan resources effectively can lead to the following challenges and negative outcomes:

  • Inefficient resource usage: Without proper planning, resources can be wasted through underutilization or overallocation, impacting productivity and opportunities.
  • Project delays: Inadequate resource planning in project management increases the risk of delays due to shortages or conflicts, affecting timelines and budgets.
  • Resource conflicts: Competing projects can lead to resource conflicts, causing tension and hindering effective work prioritization.
  • Cost overruns: Poor planning may result in cost overruns, especially in rushed procurement or last-minute resource allocation.
  • Employee burnout: Overloading employees due to insufficient planning can lead to burnout, reduced morale, and increased turnover.

Pro tip: Unsure how to boost your team’s productivity or feeling less productive yourself? We have a productivity guide for you.

  • Missed opportunities: Organizations may miss out on growth opportunities and new projects without proper resource allocation.
  • Strategic misalignment: Inadequate planning resources can lead to misallocation, diverting resources from strategic goals and OKRs.
  • Stakeholder dissatisfaction: Failing to meet promises due to resource issues can lead to stakeholder dissatisfaction and harm the organization’s reputation.
  • Lack of adaptability: Inflexibility in project management resource planning can hinder an organization’s ability to respond to changing market conditions and opportunities.
  • Operational inefficiencies: Poor planning of resources impacts day-to-day operations, potentially leading to inefficiencies that affect competitiveness.

Having discussed resource planning challenges, let’s explore the tools that can help overcome these challenges effectively.

What is the best resource planning software?

Effective resource planning is greatly aided by specialized resource management software tools that streamline the process, enhance collaboration, and provide valuable insights. Nevertheless, only 23% of project managers use resource management platforms for their projects.

Here are some of the best resource planning tools available:

  • PPM Express: This comprehensive portfolio and project management tool excels in resource planning and allocation. It provides real-time visibility into resource availability, project progress, and financial tracking. 

Pro tip: If you’re not considering changing your existing project management and resource planning tool, PPM Express simplifies resource management by seamlessly integrating with major project management tools such as Azure DevOps Boards, Jira Software, Microsoft Project, Microsoft Planner, Smartsheet, and Monday.com. This means you don’t need to migrate.

  • Microsoft Project: This powerful project management tool offers robust resource planning capabilities. It allows users to create detailed project plans, allocate resources, and track progress effectively. If you’re looking to migrate from MS Project, we have a comprehensive guide for you.
  • Smartsheet: This versatile work management platform enables resource planning, project management, and collaboration. It offers customizable templates and automation features for efficient planning.
  • Monday.com: This work operating system simplifies the planning of resources and project tracking. It provides a visual interface for managing workloads and prioritizing tasks. 
  • Jira: This widely used project management and issue-tracking tool supports resource planning and allocation. Regarding resource planning, Jira offers robust features, including resource allocation, workload management, and capacity planning.

Resource planning tools empower project managers to optimize resource allocation, ensuring that the right people are assigned to the right tasks at the right time.

Pro tip: If you’re still using Excel to plan and allocate your resources, we’ve prepared a list of Excel alternatives for you to consider.

These tools provide real-time visibility into resource availability, prevent overallocation, and enable efficient workload distribution, ultimately enhancing project efficiency and success.

Ready to streamline your resource planning and enhance your project management capabilities? Try PPM Express and gain real-time insights, improve resource allocation, and boost your organization’s efficiency. 

Sign up for a free trial today and experience the difference in resource planning.

What Is Resource Planning? The Complete Guide
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