THE NEED FOR RESOURCE PLANNING AND FORECASTING
. This article elaborates about Resource Planning for Project and Portfolio Management and discusses why you need it.
Resource planning and utilization can often be overwhelming because of its complexity. Internal resource management is just as demanding as external management, if not more. In an organization with more than 500 employees, there is a growing need to layout the tasks at hand, plan for future tasks, and ensure the availability of resources beforehand. At the same time, you need to forecast resource availability so that you can plan your resources the right way. Hence, you have to have a more systematic approach while focusing on resource need and availability.
In this article, we aim to provide you with a comprehensive idea of resource planning and forecasting. Additionally, we’ll also depict why it is crucial for your organization in this time and age. But first, let’s have a thorough idea of what resource management means.
What is Resource Management?
Resources can refer to space, staff, and equipment. Broadly put, resource management indicates the process of planning, tracking, and optimizing resource utilization to smoothly streamline project delivery.
As such, resource management involves planning, managing, as well as forecasting. You check the availability of resources, allocate those resources, manage resource conflicts or dependencies, and monitor your resources during the entire process to adapt to changes.
The Importance of Resource Planning & Forecasting
Business is about its people and you’re only as good as the people you attract and retain. When you’re dealing with an entire organization, meticulous management is required at all times. Neither overworking nor under-utilization can bring the best results for you and your team.
And that is exactly why you need resource planning and forecasting because the objective here is to solve this problem. Resource forecasting refers to predicting your future requirements of resources. This is crucial to allocating and estimating resources for internal planning within the organization.
As a project manager, you can use planning and forecasting to make sure each of the projects at hand and the ones to come are sufficiently staffed. Resource planning and forecasting has a number of benefits, including but not limited to:
1. Assurance of The Proper Use of Resources
Once you plan your resources right, there will be the little scope of facing chaos in the middle of a project. It is thus key to maximize the utilization of resources.
Again, resource planning for any industry not only focuses on the proper use of resources but also on keeping them happy. This will require a deep knowledge of the strengths and weaknesses of your team. You need to understand what task a team will find comfortable working on.
As such, you should know the following about each of your human resources:
- Past working record
- Top skills
- Strengths and weaknesses
- Results of past projects
Matching the right resource with the right project can help you have a much happier workforce. It’s a simple trick that does wonders.
This can be a huge task in itself. One way to solve this problem is by using a simple and user-friendly resource management tool. An effective resource management software will enable project managers to assign the right tasks to the right people and plan all the workload. An efficient resource management tool like PPM Express will also integrate timesheets and schedules to facilitate projects to be updated in real-time.
Hence, when dealt with properly and by the right tools, resource planning and forecasting can determine how resources can be utilized for maximum output.
Why Do You Need A Resource Management Software?
Resource management software will make your project manager’s life a lot easier. The right platform will make it easy to plan, schedule as well as reschedule projects. Additionally, it will allow you to allocate and later monitor who’s working on which project and for how long.
With a tool like PPM Express, it will be easy for you to see resource capacity and availability within the organization. You can view available skills, schedule, and also provide reports to show past and forecasted resource utilization.
2. Predicting Resource Needs and Hiring Requirements
Resource planning addresses the need of staff while resource forecasting identifies what additions, deductions, or substitutions will be required for upcoming projects.
All these factors are crucial to a project’s success and can help offer solid evidence to develop your organization’s workflow. When you plan for your future projects, you have to have a clear picture of your availability. You can do this by taking a keen look at the past projects to see which resources were over or under-utilized.
With a resource management tool like PPM Express, you can accomplish all of the above and more. In modern-day industries, it’s pretty natural for organizations to outsource resources. Having a grip on resource forecasting will help you understand whether or not you need a freelance content writer or a full-time graphics designer to complete your project.
3. Anticipating Industry Trends And Meeting Demands
Today, every organization is directly or indirectly involved with technology. With shifts in trends, the demand for technological innovation shifts accordingly.
As such, a programming language that was highly in demand three years ago might become obsolete within the next three months. As a project manager, you need to be able to predict such trends and avail your resources accordingly.
The former chairman of General Electric, Reginald Jones, said in Harvard Business Review: “I didn’t realize it at the time but we were a company with 30,000 electromechanical engineers becoming a company that needed electronics engineers. We didn’t plan for this change in 1970, and it caused us big problems by the mid-1970s.”
It is quite evident from this excerpt that resource planning and forecasting gives you a holistic view of your niche industry and the forces that shape it. So, if there are up and coming trends, you can take that into account while making resourcing decisions.
At the same time, identifying trends will also enable you to develop training solutions. Project managers can thus work in cohesion with HR managers to train teams for upcoming trends.
Guide To Project Portfolio Resource Planning & Forecasting
At this point, the need for resource planning and forecasting is pretty evident. It is a key factor that contributes toward the overall development of your organization. The only question that’s left to ask is how you can do it.
Now, at its core, resource planning and forecasting is the measurement of three factors – your past work records, your current team capacity, and your ability to maintain future workload. To ensure successful resource planning and forecasting, you need to take the following metrics into account.
1. Growth of Your Organization
One of the primary things you need to consider in case of resource planning and forecasting is noting the growth of your organization. Often, during forecasting resources, a resource manager may have a project-level view of the upcoming resource needs. This tells him what projects he needs to prepare for. However, it doesn’t show him whether or not his organization is equipped to handle the required changes.
As such, it is crucial for resource managers to know these details of the organization:
- How fast is the organization growing?
- Is the business expanding in a certain sector?
- Is the organization equipped to support personnel changes?
- How strong is the organization’s financial status in terms of adapting to changes?
Your approach will vary depending on the overall growth of your business. If your organization is flourishing, you will have to prepare your team accordingly. At the same time, poor growth would mean factoring that metric into your resource planning decisions.
2. Evolving Technology Trends
Now that you have the right resources for your existing projects, you need to factor in evolving technology. Without that, you’ll often find yourself falling short of meeting future demands. Tracking technological trends is crucial to proper resource planning and forecasting. As such, you need to do to the following:
- Monitor the demand for existing sets of skills to see how efficiently your existing teams will keep up with future involvements. If you see the demand for a certain skill is going up, you need to train more employees in that arena. Likewise, if the demand for a particular skill is becoming obsolete, you need to downsize accordingly.
- Track the upcoming market needs before you make the training and hiring decisions of your organization.
3. Other Factors
Besides the ones mentioned above, you need to take into account the following factors while making resource planning and forecasting decisions.
- Ad-hoc project needs: Ad-hoc project requirements refer to the resource requirements for a particular project. You need to ensure you have the right balance of talent and efficiency in your team to meet the necessary project demands.
- Ideal buffer size: More often than not, there will be differences in your estimated time to finish a project as compared to how long it actually takes. As such, take your past records into account to understand the mismatch and use those to forecast the ideal buffer size for upcoming projects.
- Work pipeline requirements: You need to forecast upcoming project demands based on your existing requirements. Track this demand to understand how you can maximize resource allocation and utilization.
Tips for Resource Planning & Forecasting
The thing about resource planning and forecasting is that there are countless approaches to this process. These include trend analysis, management judgment, workload analysis, etc. Going through each of these would require a separate blog post in itself.
However, no matter what approach you go for, here are some general tips you can follow for better resource planning and forecasting.
1. Forecasting At Employee-level
While resource planning at an organizational level can be extremely helpful, it doesn’t take the unique nature of individual work into account. For this reason, your forecasting must be at an employee-level to make the right decisions based on individual work habits and skills.
For instance, if an employee is known for being exceptional but slow, you need to factor that in. Again, if another employee works brilliant on short-term projects but struggles with big and long-term projects, you need to take that into consideration for proper forecasting as well. Adopting such an approach will ensure a satisfied workforce and provide better forecasting results.
2. Adopting An Integrative Approach
Your Project and Portfolio Resource Planning and forecasting can either take a top-down approach where senior management addresses business directions and allocate resources or have a bottom-up approach where project managers identify which resources are necessary for the business at present.
However, if you want accurate planning and forecasting results, you need to adopt an integrative approach where project managers collaborate with top management. As a result, they can plan future resource needs and business requirements together.
In such a scenario, management provides project managers with the right business direction, whereas project managers come up with a solution to meet those requirements. In an ever-changing work environment, this approach brings clarity in resource planning and forecasting.
3. Having Contingency Plans
At the end of the day, no matter how much you plan and forecast, some resources will under-perform while others over-perform. It’s an inevitable part of any organization which is why you can never predict with 100% accuracy how a project might turn out.
Therefore, it is important for you to have contingency plans. You need to forecast the worst-case scenarios. What would be your course of action if an employee decides to leave? How will you cover up if another employee does not perform as expected? Forecast a buffer time that will ensure you can deal with any issue that arises in the middle of a project.
As a project manager, you need to bridge the differences between what’s expected and what actually happens. So, the more contingency plans you have, the better you’ll work out your options.
Though resource management as a whole may seem daunting, choosing the right tools like PPM Express can make this process seem seamless. It is no surprise that resource planning and forecasting is one of the most important aspects of project management. If done right, it can take your business to new heights. Proper resource planning and forecasting ensures a happier workforce with engaging employees. And satisfied employees would mean satisfied customers.