Resource Planning: Importance & How To Do It Effectively

Resource planning is the process of determining how a business will allocate resources in a project, such as assigning tasks to individuals based on their skills and availability. 

It helps balance demand and capacity across projects, allowing you to keep tight timelines and manage stakeholder expectations.

What Is Resource Planning?

The resource management planning process includes identifying, allocating, and managing the resources required to carry out a specific set of tasks or achieve a particular goal; typically using resource management software.

It's a proactive activity that looks at what's planned for the project and ensures that all types of resources, including people, materials, tools, and finances are available when the project needs them. Even IT services require resource planning.

As the project manager, you are responsible for resource planning because you'll be intimately familiar with the project requirements and the project plan.

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How Does Resource Planning Work?

Resource planning is designed to ensure that each project has what it needs to succeed, as well as predict and mitigate future hiccups. Resource planning is also foundational to developing strategies for managing multiple projects, helping to avoid conflicts and ensure timely delivery.

It works by taking inventory of resource utilization and availability on an ongoing, real-time basis so that you don't end up with project bottlenecks or under-utilized resources.

Here are a few of the central items for you to consider when undergoing the resource planning process:

• Resources: A list of the available resources for a project forms the foundation for your plan. Visualizing resource availability helps a lot, as the list is typically compiled at the portfolio or business level and resources are frequently shared between projects.
• Cost: You'll typically track both the direct cost of resources to the company as well as the billed rate that represents the cost to the client. For human resources, record the hourly rate so that it can be multiplied based on the time spent.
• Availability: If you want to avoid delays and resource conflicts, you will need to understand each resource's availability. For physical resources, consider constraints like lead time for ordering.
• Responsibilities: After you’ve identified the necessary resources, assign responsibilities so that team members understand what is expected of them.
• Dependencies: This is the relationship between resources. There will be times in which certain resources won’t be available or won’t function until specific project tasks have been completed. It’s important to plan for these situations as dependencies can easily derail entire projects.

How To Do Resource Planning: 6 Stages

There are 6 stages in the resource planning process:

1. Taking inventory of your upcoming projects: You may simply choose to look at your organization's project portfolio management tool or collaborate with other project managers to find out what's coming down the pipeline. Understand if you need to plan for just one project, or multiple projects that will be happening at the same time.
2. Identifying and forecasting the resource requirements for each project: Determine the types and quantities of resources needed for each project, leveraging historical project data.
3. Determining the availability of those resources: Check the internal and external availability of resources to see if capabilities and timelines adequately match up.
4. Deciding where each resource is best used: Assign resources to the specific tasks and projects they're most suitable for based on skills, experience, project requirements, and project life cycle. Create a back-up plan; it’s unwise to build your entire project timeline around one course of action in case (or, more accurately, when) something changes.
5. Allocating your resources for each project: Create a plan for each project, detailing the resource management methods you plan on using, the usage of each resource, and contingency plans. Consult lessons learned documentation, such as prior project schedules, risk registers, budgets, and/or retrospectives, to help you allocate financial, time, and people resources appropriately and avoid potential pitfalls.
6. Tracking your projects: Implement proper tools for project management, including timelines and resource usage, adjusting your plan as needed to accommodate changes and challenges. You'll likely be shifting resources around constantly as the project progresses.

There are plenty of resource planning templates that you can use to speed up this process and save time and effort.

Keep The Theory of Constraints In Mind

The theory of constraints is a managerial methodology that helps project managers identify potential bottlenecks in their work processes. Failure to identify and remove these bottlenecks means that external forces can wreak havoc on your team’s ability to deliver according to the project schedule.

 

The theory of constraints methodology includes five steps:

1. Examine each process in your project’s resource plan. What is the limiting constraint that slows or derails progress?
2. Review project resource utilization to identify what resources you can dedicate to addressing the constraint.
3. Ensure all activities in the process support the constraint.
4. If the resource constraint can’t be eliminated, consider other actions that might work to alleviate the constraint (e.g., investing additional resources).
5. Address new constraints, and continue the cycle.

 

It’s also important to consider whether other teams play a role in your project. Does your team require deliverables from external teams to be successful? These constraints can also impact your project.

Importance of Resource Planning

When organizations invest time in planning ahead, they prevent failures along the way. Resource planning (with a sprinkle of active resource management) is one of the major aspects of project management that can help ensure project success.

Don't believe me?

According to the Project Management Institute’s Pulse of the Profession survey, 23 percent of the organizations surveyed thought that inadequate resource forecasting was one of the primary causes of a project’s failure.

Therefore, it is important to recognize the importance of forecasting in project management.

Forecasting and resource planning are key… it gives me a better indicator of whether we need more budget or to cut a feature.

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Ryan Gilbreath

Digital Project Manager at MobeluxOpens new window

Here are a few reasons illustrating why resource planning and resource forecasting are necessary components of project management:

• Visibility of resources and timelines: Resource planning can increase project visibility, as it can help you clearly see how the logistics of one project fit in with others at the company. This can eliminate issues like conflicting deadlines or miscommunication. For example, a Gantt chart shows the overall project schedule and all the steps that contribute to it, helping identify areas where teams might be overextended.
• Allocation of resources: You can use resource planning tools to identify the right employee for a particular project. By taking time to strategize staffing, you'll ensure you're using the right resources and developing team member’s specialized skills.
• Accountability of time: You can use project tracking software to keep track of how much time employees spend on a project compared to initial expectations. This accountability helps identify productivity issues early and prevent resource scheduling conflicts that could occur if a project is delayed.
• Forecasting of future resources: You can forecast what resources you'll need in the future based on data from current projects. It’s important to calculate resource demand and conduct capacity planning to ensure you aren't held up by resource shortages. (Find out how capacity planning and resource planning differ here.)
• Analysis of budgeting: Companies can use resource planning to perform a detailed project budget analysis. Business owners can determine the costs of each component of an upcoming project to ensure pricing is set appropriately to achieve profitability.
• Flexibility: Resource planning allows you to come up with a Plan B (or Plan C) for when one or more of your resources isn't available, or there's a change in capacity (e.g. a team member leaves the department or company).

What To Avoid With Resource Planning

Resource management is an important component of project management, but there are also challenges to navigating this workflow. Consider the following risk factors so you can avoid common mistakes:

• Not understanding your needs: A resource plan isn’t effective if it doesn’t accurately represent all your anticipated needs and every available resource. Account for everything you know so you don’t encounter surprises later.
• Not following up on outcomes: Compare your projections to outcomes. Did the estimated resource costs match the actual costs? Did a project take more hours than anticipated? Analyze these outcomes to identify areas for improvement and make better project plans in the future.
• Not holding teams to commitments: Hold the team accountable to their deadlines (without being unrealistic). Set expectations and follow up on missed commitments to help your team stay on track.
• Not anticipating hiring needs: Plan for hiring needs far in advance. If staffing is too tight, employee morale can suffer. If staffing is too padded, you’re paying for unnecessary resources. Forecasting your future needs allows you time to train new employees and account for turnover.
• Not limiting scope creep: Set clear expectations about what is and isn’t included in a project with the team and the client. You can also include buffer time and resources to address unexpected changes that come up so the timeline isn't delayed.

Working on your resource management skills on a regular basis can help you anticipate these challenges before they come up.

Recommended Tools For Resource Planning

Resource management software or resource scheduling tools make resource planning easy.

These tools help manage and store information like team member schedules, capacity, ideal utilization rates, and skill sets, so you have all the pertinent information to create an accurate resource plan. You can also find specific capacity planning software here.

Here is our list of the best software tools for resource management:

1. 1. Kantata — Best for real-time resource utilization
2. 2. Scoro — Best for forecasting team utilization
3. 3. Float — Best for visual, profitable resourcing
4. 4. Parallax — Best for predictive resource management
5. 5. Productive — Best resource planning and capacity forecasting
6. 6. Resource Guru — Best for hassle-free resource booking
7. 7. monday.com — Best for simple workload planning
8. 8. Bonsai Agency Software — Best for workload optimization
9. 9. Hub Planner — Best for midsize and large companies
10. 10. Wrike — Best for scalability

If you need a low-cost option to help you get started, check out our list of free resource management software or this list of open source resource management software.

What's Next?

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