Best Practices for Resource Capacity Planning

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Resource capacity planning is one of the most commonly cited functions of project portfolio management. Senior leadership rightly wants to understand whether they have adequate resources to take on more project work and whether their existing work will get done on time. Most companies recognize the scarcity of resources to do project work and thereby look for portfolio capacity views to answer these two important questions:

1) When can we take on new projects?
2) Can we get our existing work done?

Best practices for resource capacity planning (project planning):
Conduct consistent planning across projects
Regardless of methodology, clarify high-level scope for every project
Involve project team members in planning and estimation
Learn techniques that will help improve estimation over time
Communicate with Resource Managers about team assignments; never rely on software to replace good old communication

Best practices for resource capacity planning (project resource planning):

Keep it simple
Estimate resource time at the project level (or phase level if appropriate)
Do not try to capture granular task-level utilization
Do not try to capture skill-based information to start; knowing key roles is good enough to get started
Start with simple ‘top-down’ resource forecasts across the needed time frame and adjust the utilization as needed (also known as resource profiling)
Monthly utilization is often good enough for portfolio capacity planning
Do not try to estimate everyone’s time; focus on those critical resources who are in high demand. This will still yield high value from a portfolio capacity perspective.
Resource plans should be developed in the initiation or planning phases of a project
During project execution, the resource plans should be updated periodically (keeping the resource plan simple makes it easier to maintain)
The goal is ‘good’ data, not ‘perfect’ data

Best practices for resource capacity planning (Portfolio Manager):
Identify at least one person responsible for coordinating and analyzing resource data
Give the Portfolio Manager oversight of the process
Data analysis skills
Soft leadership skills for working with Project Managers
Develop recommendations for the Portfolio Governance team based on resource analysis
Share resource capacity analysis as part of the portfolio communication plan

Best practices for resource capacity planning (Resource Data Analysis):
Use simple resource utilization categories such as “Available”, “At Risk”, “Over-Utilized”
Define thresholds for when roles and individuals are “available”, “at risk”, or “over-utilized”; this will make the analysis much easier.
Start by looking at the over-utilized roles and then drill down to specific people. It is possible for a team to be over-utilized yet have at least one person who can take on more work (this usually means that someone else has too much work that needs to be re-assigned).
Resource teams with an average utilization that puts them “at risk” or “over-utilized” represents a real resource risk to the portfolio.
Keep it simple; filter out noise by focusing on key resource roles and a few specific individuals; too much data will over-complicate resource analysis.

Best practices for resource capacity planning (Portfolio Governance Team):
Utilize resource capacity information during key decision-making meetings such as reviewing new proposals or Phase-Gate reviews
Let the Portfolio Governance team review options based on resource capacity information in order to make better decisions