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The Holygrail of Resource Planning in Project Management

Last Updated On September 22, 2021

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#1. What is Resource Planning in Project Management?

#2. Importance of Resource Planning in Project Management

#3. Essential Components of Resource Planning Template

#4. Common mistakes of Resource Planning in Project Management

#5. Responsibilities of Project Managers and Resource Managers

#6. Resource Planning within different Project Management Methodologies

“How many and what kind of resources do I need for the coming weeks, months,
quarters, or years”? “Should I hire more people to meet future demands or leverage
sales efforts to keep everyone occupied with work”? “How can I avoid billing loss and
control project costs before it’s too late?”
 These are the pertinent questions that stakeholders ask themselves on an everyday
basis. To get the right answers, we need resource planning inTRY
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Without implementing the right process and technique, taking any

decision will be like throwing darts in the air.

Resource planning can address these challenges in today’s dynamic business

conditions. It helps plan resources intelligently from the ground up and continuously
optimize your workforce. This guide is curated for enterprises to gain a detailed
understanding of resource planning in project management.

Saviom Enterprise Resource Management

Let us define resource planning in project management:

#1. What is Resource Planning in Project

Management?
Resource planning in project management is the process of identifying and allocating
the best-fit resources to the projects. It also ensures the effective and efficient
 utilization of the resources across the business.
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On the other hand, project planning is the process of identifying, organizing, and

scheduling detailed tasks for completing a project successfully. While formulating a

project plan, several parameters like delivery, budget, duration, tasks, resources,
milestones, and stakeholder reviews are considered.

Resource and Project planning are two sides of the same coin. Its synchronization is
the key that determines a project’s success or failure. Resource planning in project
management is usually carried out during the initiation phase. But the intensity or
rigor slows down once the initial fulfillment goal is achieved in most cases. It should
be a regular activity throughout the life cycle as the resource requirement fluctuates
due to continually changing project demands.

#2. Importance of Resource Planning in Project

Management
Achieving project goals within the given constraints is one of the significant
challenges of project management. Project managers are expected to manage their
time between multiple projects, including their capacities, priorities, and skillset. A
resource plan plays an important role in this project management process.

Here are five different ways by which resource planning can help in project
management:
 Reduce Project Resource Costs significantly
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Allocating the right resource to the right project ensures the timely delivery of the

project within the budget. Planning for resources eliminates the deployment of over
and under-skilled resources on project tasks. If resources are under-qualified, a delay
in project timelines is inevitable, and if overqualified, can spike project costs.

According to Deloitte Global Cost survey 2020: “Reducing project resource cost
takes precedence over other business initiatives”

Forecast and Improve Profitable Resource Utilization

Resource planning and forecasting provide foresight into utilization within a project.
A structured resource plan includes mobilizing resources from non-billable to
strategic/billable projects for increased revenue. It also prevents under or
overutilization of resources and helps in improving employee satisfaction.

Facilitate Efficient Resource Planning and allocation

Resource planning in project management identifies and assigns resources to project
tasks based on skills, availability, cost, and other selection criteria. It also helps to
allocate global resources from low-cost locations and control project costs. Strategic
resources are not assigned to only high priority projects and instead uniformly
distributed across all projects.

Foresee and Plan Pipeline Project Resource Requirements

Resource planning and forecasting pipeline estimate project resource requirements
in advance. Capacity planning identifies the gap, and proactive measures are
applied to bridge the difference. It helps reduce last-minute hiring activities, which
can lead to cost escalation and compromise the quality.
 Ensure Successful Delivery using Project Resource Planning
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Proper planning ensures that all project resource requirements are identified and

fulfilled. It is also revisited throughout the project life cycle as resource demand
fluctuates from time to time. It also maintains continuity by preventing resource
movements within projects unless it comes under strategic decision. These steps
allow the timely delivery of projects within a specified budget.

PwC Project Management Insights states that “30% of Projects fail due to a lack of
Resources”

#3. Essential Components of Resource Planning

Template
We describe some of the salient features of resource planning techniques and tools
that aid in the project management process.

Multi-dimensional Resource Planner

Resource planner allows you to allocate appropriate resources in real-time to the
projects across the organization. It helps to decide the best-available-best- fit
instead of the first-visible-first-fit resource. It also helps you also in viewing and
 tracking allocations across multiple dimensions such as team, department, location,
and more. TRY IT FREE BOOK DEMO

Project Pipeline Planning

Planning and forecasting resource demand for potential projects in the sales pipeline
is essential to avoid last-minute scuffle for competencies. Resource planner allows
resourcing treatments such as training or hiring in advance and out rotation/backfill
strategy for niche resources. It also lets you avoid wasteful hiring/firing cycles to
ensure projects are successfully delivered.

Resource Utilization Forecasting

Forecasting techniques enable you to optimize billable and strategic utilization. It
allows you to mobilize resources from non-billable to billable or strategic work.
Resource planner helps to control project financials by comparing forecasted with
actual utilization. It also detects and proactively mitigates under and over resource
utilization.

Resource Capacity Planning

Capacity planning analyzes the gap between resource capacity and project demand
across the enterprise. It helps identify short and long-term excess or shortfalls and
looks into multiple channels to effectively bridge the gap. Resource capacity planning
facilitates proactive strategies such as adjusting project timelines, re-training
employees or hiring a contingent workforce.

Bench Management
Resource planner allows early foresight of resources that will land up on the bench
to allocate them to suitable project vacancies. Bench management provides
 additional training or shadowing opportunities for the selected employees. So that
they can be made billable using the current opportunities. TRY IT FREE BOOK DEMO

Reporting using Real-time Business Intelligence

Real-time business intelligence includes configurable dashboards and custom
reports to fast-track decision making in a rapidly changing business environment.
Resource planning uses a combination of security rights, portal designs, and filters
allowing an end-user to view relevant information. Different stakeholders can get a
granular view with a slice/dice of data.

What-if Analysis for Resource Simulation

What-if analysis within a resource planner allows you to build and simulate different
scenarios in a multi-project environment. It helps arrive at the best possible
outcome within project constraints, such as impeding an existing project or
extending its timeline. It also considers resource-related parameters before shuffling
them between projects. After deriving the best scenario, it is applied to the actual
project schedule.

#4. Common mistakes of Resource Planning in

Project Management
 The project resource cost can blow out of proportion, and project delivery is
significantly impacted in the absence of a proper resourcing strategy.
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we describe some of the common mistakes made in this area.

Using Silos of Spreadsheets for Resource Planning

Despite its limitations, many organizations are still using spreadsheets for planning
their resources because it is easily accessible. While this software comes at a cost, it
offers significant benefits over spreadsheets. It causes improper allocation, double
booking, and creates additional work. It is very limiting and a nightmare to maintain.

Marketwatch points that “88% of spreadsheets are prone to errors”

Planning Resources without Overall Visibility

Many managers continue to allocate resources without having complete visibility of
their skills, competencies, and existing bookings. As a result, it becomes difficult to
allocate the right resource to the right projects at the right time. Restricted visibility
also hinders identifying and leveraging quality resources from low-cost locations.

Lack of Resource Forecasting for Pipeline Projects

Often, resource planning for future projects is taken up at the eleventh hour. The
resource managers make the mistake of taking up the planning activities only when
the deal is signed. Ideally, it should start after the opportunity reaches a certain
probability of closure so that there is sufficient lead time to address resource
requirements. This results in last-minute activities that create an unbalanced pool as
the quality of the resources are compromised.

Not Maintaining the Right Mix of Permanent and Contingent Workforce

 Businesses try to fulfill project requirements using full-time employees as it is
perceived to be a more cost-effective solution. If a niche resource is hired for
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shorter duration, it becomes difficult to redeploy him after the assignment is

complete. A resource plan should maintain a judicious blend of permanent and
contingent resources. For short term assignments, a contingent workforce will be
less expensive compared to hiring full-time resources.

Allocating Under or Over skilled Resources to the Projects

One of the common mistakes of resource planning in project management is
assigning under or overqualified resources to tasks. When resources are under-
skilled for the job, it causes project delay. On the other hand, over skilled resources
spikes project costs. Not assigning tasks as per skills and interests leads to decreased
employee engagement and loss of productivity.

Unplanned Hiring without Analyzing Project Demands

Resource managers often resort to last-minute hiring activities to fulfill project
resource requirements. This unplanned hiring compromises quality and leads to a
large bench of mismatched skillset. So, analyzing project demands with matching
skill sets are prerequisites for informed hiring decisions.

#5. Responsibilities of Project Managers and

Resource Managers
Project Managers operate on a project-level with projects of different sizes and
complexities. A Project manager can manage single or multiple projects and ensures
they are completed within a stipulated time and budget. However, Resource
Managers operate at the organization level, and they oversee the allocation of
resources to several projects.
 The Project Manager initiates the resource request for an open position within his
project, and the job of the resource manager is to fulfill the same. Once a resource
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allocated to a project for a particular period, the resource manager’s responsibility

ends. However, the Project Manager’s job only begins, as he/she needs to ensure
that the resource carries out the delivery responsibilities.

Role of Resource Manager

In summary, a resource manager is responsible for:
Planning and allocation based on resource’s skills, previous experience, and
availability.
Capacity planning to address issues of short fall and excesses of resources
Support project managers with the resource management plan and related
activities
Address resource concerns by reallocating resources, negotiations, or assigning
additional staff.
Collate new project requirements from the business and provide it to the hiring
team
Certain limited HR-related functions
Collaboration with other departments, e.g. HR, PMO, Sales, Learning &
Development
Generating reports and analytics for the senior management

Role of a Project Manager

The corresponding roles of a project manager are:

Create a project management plan and define the scope and delivery objectives
of the project.
Capture Resource requirements and request for fulfillment
Streamline Communications with stakeholders/ team members and customers
Carry out operational reviews as per Project KPIs
Estimate Time and cost and Monitor the budget
Report progress of the project; analyze any potential risks and provide mitigation
strategy
Document the project and set the expectation for various team members
Work with the empaneled vendors for contingent resources
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#6. Resource Planning within different Project

Management Methodologies
A methodology is essentially a set of guidelines and processes for managing a
project. A project manager chooses a methodology depending on its team, project-
type, and project-scope. Here we discuss some commonly used project management
methodologies and how to plan resources for them.

Agile
 In this approach, there is no top-heavy requirements-gathering. It is a collaborative
process to deliver with small incremental changes iteratively. Since some project
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requirements can suddenly change, the resource plan needs to address frequent
shuffling of resources across different projects.

Scrum
It enables a small, cross-functional, and self-enabling team to take charge of the
delivery. Similar to Agile, the resources need to be flexible and multi-skilled within a
small team size. In this dynamic project environment, the resource plan needs to
ensure that allocation is not done only based on primary skill.

PMBOK
Project Management Body of Knowledge (PMBOK) defines the processes, best
practices, terminologies, and guidelines accepted in the industry. PMBOK addresses
different project situations and has documented several best practices with use
cases. The resource plan needs to be carried out based on the specific project
situation.

Prince2
Prince2 is a process-oriented methodology that divides projects into multiple stages,
each with their plans and processes. The methodology defines inputs and outputs
for every stage of a project so that nothing is left to chance. Resource Planning, in
this case, focuses on meeting resource requirements for every stage of the project.
Accordingly identify the right skills and competencies, certifications for specific
stages.

Waterfall
In this case, the projects are fully planned in the beginning and then executed in
phases. It is assumed that there will be minimal changes during the execution. So,
most of the resource planning activities are done based on the initiation phase of the
project. Accordingly, resources are allocated before the phase starts.
 Kanban
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Kanban focuses on early releases with collaborative and self-managing teams. It uses

a visual workflow tool for the early detection of a bottleneck in the development
process. It is suited for projects with a smaller team, which depends on individual
members. The resource plan must be able to provide the right resource matching
the project requirements. The primary skill or competency is most important in
resource selection.

Lean
Lean methodology maximizes customer value while minimizing waste. It promotes
the concept of delivering more with fewer resources. Resource plan helps in
streamlining billable and strategic utilization within the project and effectively
manages the overall capacity. It ensures that the existing capacity is fully exhausted
before new resources are inducted in a project.

Six-Sigma
This methodology improves quality by reducing the number of errors by proper
analysis and removing it from the process. Resource plan needs to provide the
subject matter experts in the specific area with certifications such as Six Sigma Black
belts. The resources are typically multi-skilled, and the resource selection includes
one primary skill and several secondary skills.
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#7.Operational and Strategic Resource Planning

in Project Management
What is Strategic and Operational Resource Planning?
Planning implies thinking in advance, what we need to do to realize the business
objectives. Strategic Planning aims to attain long-term goals while operational
planning helps achieve the short-term objectives of an organization.
 Strategic Planning is a process that is usually undertaken by top-level management
to decide the future direction. It is not limited to projects within a particularBOOK DEMO
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department or unit, but it covers the entire organization. Strategic resource planning
looks into the overall long-term resourcing strategy.

It can change drastically based on individual priorities. For example, if the

organization is planning on outsourcing an important function, the resourcing
strategy will shift from FTE to contingent staff. Similarly, a niche skilled resource’s
out-rotation from an existing project to start a new initiative will come under
strategic resource planning.
Operational Planning addresses the day to day activities of a business. It also
supports strategic planning to accomplish the overall organizational goals. First, we
decide the short-term objectives and then work out how we will achieve it.

Operational Resource planning includes regular business activities and operations as

per organizational guidelines. For example, it covers pipeline project management,
management of FTE and contingency resources, forecasting billable and total
utilization, and more.

Factors that can influence Operational and Strategic Resource Planning

Parameters for strategic and operational resource planning are linked with the
mission, vision, strategies, goals, and objectives of an organization. The following can
influence strategic and operational resource planning decisions.

Staffing
It defines an organization’s hiring policy for full-time resources, and it directly
influences decisions made on a resource plan. It also covers compensation and
benefits, which is an important consideration for regular employees.

Hybrid Delivery
The project team is created using a combination of in-house and vendor resources.
The critical positions which require specific domain knowledge are performed by full-
time in-house staff. One-time activities such as software development are
accomplished using vendor resources.
 Outsourcing vs. in-sourcing
Due to globalization’s effect, many businesses are outsourcingTRY
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functions to another organization. Some organizations also have stricter policies that
their confidential data cannot leave the company’s boundary.

Multi-locational Policy
Due to the cost pressure, many projects are now getting executed from different
locations. Project costs can be minimized using generic resources from a low-cost
location. The high-skilled resources can be located based on their availability, who
can take up leadership roles related to delivery.

Training and Development

Full-time resources must learn new skills for their self-development and compete in a
dynamically changing environment. It may not always be practical to hire new
resources. However, a new skill can be acquired by cross-training an existing
employee.

Resource Leveling and Smoothing

Resource leveling optimizes workforce allocation by adjusting the project schedule to
resolve conflicts caused by resources’ over-allocation. Resource Smoothing optimizes
allocation by adding new resources without affecting the critical path and timeline.
Both of these techniques influence decisions towards a resource plan.

How to Address Market Volatility using Operational and Strategic

Resource Planning
Effectively planning resources is one of the critical success factors for an
organization’s growth and sustainability. The outbreak of the COVID-19 virus has
upset the business model of the whole world at the beginning of 2020.

Many organizations are trying to stay afloat in these volatile market conditions with a
shrinking budget. Acute cost pressure and skill shortages have also become a routine
activity. Following strategies can help an organization in sustaining their business
profitability while planning for resources.

Short-term Strategy
 Effective Capacity Planning and identifying the Gaps between Capacity and
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Address the shortage of resources using a combination of FTE and contingent

resources
Either re-train existing employees or go for new hires depending on the
requirements
Identify new projects, adjust the project timelines, and sell services for excess
capacity
Mobilize employees from non-billable or low priority work to billable or high
priority projects as a routine activity.
Revisit out rotation/backfill policy for starting new projects with niche skills

Long-term Strategy
Decide non-critical functions that can be outsourced
Identify at least two to three vendors who can work as strategic partners for
outsourcing
Decide on a multi-locational policy to take advantage of resources from low-cost
location
Adapt a hybrid delivery model for cost efficiency
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#8.Emerging Trends of Resource Planning in

Project Management
Replace Silos of Spreadsheets with an Enterprise Resource Plan
Silos of spreadsheets and home-grown tools are inadequate for efficient resource
planning, and it adversely impacts business performance. Hence, companies are
shifting towards enterprise-level software that centralizes resource-related
information and maintains a single source of truth.
 Taking Resource Scheduling to the next level
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Today, resource scheduling is not just a simple process of allocating resources

against the projects. It has evolved into a full-fledged enterprise-level process that
ensures maximum efficiency and utilization of resources.

Resource Capacity Planning for Business Efficiency

Resource capacity planning is not a luxury for businesses any more. It has become
an essential part of the resource planner. It future proofs your workforce against
market volatility by analyzing the demand capacity gap and bridging them
proactively.

Resource Forecasting to Maximize Effective Utilization

Billable and strategic utilization of the workforce are crucial indicators of business
profitability. Therefore, it has become critical to get a real-time view of future
utilization while planning for resources. Resource forecasting helps in taking
proactive measures to improve future allocations.

Integrating Resource Management Processes with Other Applications

Traditional resource plans include inefficient and time-consuming processes.
Enterprise-level resource planner streamlines them using efficient workflows, alerts,
analytics. It also integrates effortlessly with multiple business applications to
maintain a single source of truth across the enterprise.

Monitoring and Controlling Project Resource Cost

Enterprise-level resource planner offers various capabilities to monitor and
effectively reduce overall project costs. Some of them are forecasting, capacity
planning, resource modeling, pipeline management, bench management, etc.
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#9. The Glossary:

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#10.The Saviom Solution:

SAVIOM is the market leader in offering the most powerful and configurable solution
for managing your enterprise resources effectively and efficiently. With over 20 years
of experience, this Australian-based MNC has created its global presence across 50
countries and helped more than 100 customers achieve their business goals.
SAVIOM also has products for project portfolio management, professional service
automation, and workforce planning software that is customizable as per business
requirements.
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