According to a PMI survey, “26% of companies with a dedicated resource planning solution can estimate and allocate resources to deliver projects on time.”
Therefore, it’s a no-brainer that organizations should implement a systematic resource planning process to ensure successful project completion. Resource planning helps organizations identify, forecast, and allocate different business resources to various projects at the right time and cost. As a result, it enhances employee performance and ensures timely project delivery within budget.
However, when managers fail to create an effective resource plan, it can lead to low productivity, burnout, compromised project quality, etc. Additionally, it can cause budget and schedule overruns, which can completely derail the project. Therefore, creating an efficient resource plan is the need of the hour for organizations.
This blog explains the significance of resource planning and the steps to create an efficient one using Saviom’s resource management solution.
Why is efficient resource planning important for an organization?
Resource planning is a vital part of the project management process. It allows you to predict the resource requirement and create a plan for the pipeline projects in advance. In addition, it enables managers to identify resource excess or shortage by comparing resource demand against capacity. Based on this, they can take the right measures to bridge the capacity vs. demand gap.
Further, resource planning helps in effectively distributing all the available resources to diverse projects according to their skills, experience, qualifications, etc. Moreover, with an effective resource plan, managers can make data-driven decisions to reduce project resource costs. For instance, they can identify and allocate cost-effective global resources to the projects. Also, they can conduct planned hiring and create a judicious resource mix ahead of time and avoid last-minute activities.
In addition, managers can check whether a resource is working under billable or non-billable projects. Thus, they can mobilize them from non-billable to billable and strategic projects based on their skill set. This ascertains optimum resource utilization and ensures profitability.
Given the significance of resource planning, let’s look into some best practices for the same.
5 steps to build an efficient resource plan
Here are five ways in which you can build a resource plan effectively-
1. Forecast and bridge the capacity gap in advance
When project managers do not foresee and estimate resource demand in advance or request at the last minute, resource managers don’t get sufficient lead time to identify competent resources before the project’s onset. This triggers last-minute firefighting and increased hiring costs. Thus, they need to gain foresight into pipeline projects and analyze the gap between the current capacity against the demand.
Resource planning helps identify excess or shortage of resources and implement course corrective measures to bridge the gap. Firstly, if there is an excess of resources, managers can bring forward project timelines, or sell additional capacity, etc. Alternatively, a shortfall of resources can be mitigated by bringing in employees from other departments or implementing training and upskilling. Further, it will enable them to conduct planned hiring, eliminating the hassle of last-minute hiring.
2. Ensure competent resource allocation
The availability of competent resources at the right cost and time is essential for a project’s successful delivery. Once the project manager raises resource requests, the resource manager should identify the employees whose skill set aligns with the demand.
To accomplish this, they can analyze the resources by various attributes such as skills, locations, availability, utilization, cost rate, etc., and then allocate the best-fit resource to the suitable projects. Conversely, for non-human resources such as equipment, tools, etc., they should determine the different specifications before allocating it to a task. It will ensure that resources are uniformly distributed across multiple projects, thereby enhancing engagement.
3. Form the right resource mix that suits the project budget
A balanced mix of the permanent and contingent workforce helps firms cater to evolving client expectations and prevents last-minute firefighting, thereby minimizing high-resourcing costs. For this, managers can assess the nature of skill requirements for a project along with the budget and determine if the skill demand is a short-term or long-term requirement.
Depending on that, they can hire a permanent or on-demand workforce. Furthermore, managers will not have to unnecessarily hire and then release resources in the future, thus reducing the unwanted hiring-firing cycle. For example, During the seasonal peak, an audit and accounting firm often have a high workforce demand for a short-term assignment. Here, managers can hire temporary workers and complete the project within the cost. This will let you keep resourcing costs in check and helps eliminate unnecessary hiring/firing cycles.
4. Create a training and development plan to address resource constraint
An organization facing resource constraints may not be able to start a project on time, leading to project delays or even failure. Thus, before using external channels to reduce resource constraints, managers must leverage internal channels to train or upskill the resources. For this, they can create learning and development plans for the resources according to their needs. It will help them develop new skills and enhance their career portfolio.
Moreover, managers can also provide career-building opportunities, peer-to-peer coaching, reverse mentoring, on-the-job training, webinars, and conferences to diversify employee skill sets. This will help address resource constraints, minimize bench size, and improve billability.
5. Facilitate succession planning for critical roles
When critical resources suddenly retire or resign, the projects can derail due to the organization’s lack of succession planning. Effective resource planning can be leveraged by firms to review key roles and resources. This will help them identify and prepare suitable employees to fill critical positions when current employees leave their jobs
Further, they can even track the performance of the resources and identify the top performers. They can also upskill and train these resources to take up higher roles. This way, effective succession planning ensures smooth role transition and business continuation.
Now that we know the steps, let’s look at how resource management software can assist.
How can advanced resource management software help?
Saviom’s advanced resource management software enables managers to create an intelligent resource plan and utilize their resources to the maximum potential.
The tool offers 360-degree visibility of all resources and their attributes, such as skills, experience, capacity, availability, etc. This allows managers to find the best-suited resource with the right skills for the projects.
Further, the tool’s forecasting capabilities and capacity-vs-demand report help foresee the skill gaps by leveraging appropriate internal and external channels. It, thus, reduces the last-minute and high-cost resourcing hassle.
Moreover, managers can leverage the modeling and simulation functionality of the tool. It helps analyze various scenarios and compare different outcomes by changing various metrics such as availability, cost rate, etc. This allows them to arrive at the most viable outcome and apply it to the actual resource plan.
The Bottom Line
Resource planning enables an organization to accomplish more projects on time and within budget. Using the above-mentioned steps coupled with the right resource management software will help you create an efficient plan and derive the best possible results. Thus, increasing organizational profitability and sustainability in the long run.
So, are you ready to create an efficient resource plan?