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Have you ever hit a part of your project where you need a certain specialist, but they’re not available? Or where you needed a physical space that should have been booked 6 months in advance?

On the flip side, have you ever had project team members sitting on their hands waiting for a dependent task to be completed so they can start their part? Or a dozen blade servers sitting on palettes in the foyer while the data center construction finished?

All of these situations can be extremely stressful for a project manager and can put immense strain on business operations. 

So, is there a way to avoid these situations? There sure is. It’s called resource planning.

Here’s what I’ll cover:

What Is Resource Planning?

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. 

Project managers use resource planning to make sure they are using resources and members of their team effectively. They also use it to forecast future needs so that they can have the available staff, space, and products on hand when they need it. 

Effective resource management is an important and necessary process for companies to invest in because it provides numerous benefits, including cost savings, time savings, and increased customer happiness.

What Is Resource Planning In Project Management?

Resource planning in project management is a crucial and recurring step throughout a project’s planning and execution stages. It is a proactive activity that looks ahead at what is planned for the project and ensures that the right people, materials, tools, and finances are available when the project needs them so that the project can progress as expected.

In general, project managers are responsible for resource planning for their projects because they are intimately familiar with the project requirements and the project plan. Resource planning in this context is an ongoing planning activity that involves looking ahead at the financial, material, and human resource requirements of a project and creating a detailed plan for the types of resources needed, how much is required, and when each resource is needed. 

By planning ahead, project managers can prepare for each step in the project and minimize unnecessary delays and unpleasant surprises.

How Resource Planning Works

A key piece of effective resource planning is the resource management plan, which is a document or tool that outlines how an organization will deploy resources throughout a project. 

For example, the plan can strategize the acquisition and allocation of the people, the equipment, and the physical space needed to complete the project. This can include the processes for resource planning and monitoring, the key people responsible for project resourcing, and a list of every known resource that is essential to the project’s completion. 

The resource management plan should be accessible to all team members and updated throughout the project. It should be the source of truth for what resources have been deployed at this stage in the project’s progress and what resources will be required throughout the remainder of the project so that project managers can make informed decisions. 

What is included in a resource management plan varies depending on the project and its scope. However, the following information is often included in a resource management plan:

  • Resources: A list of the available resources for a project forms the foundation for your plan. This list can be compiled at the portfolio or business level because resources are frequently shared between projects. Resource management charts are useful in visualizing resource availability and use.
  • Cost: Project managers can 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, project managers can record the hourly rate so that it can be multiplied based on the time spent.
  • Availability: It’s important to understand the availability of each resource to avoid a delay or resource conflict. For physical resources, consider resource constraints like the 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 tasks have been completed. It’s important to plan for these situations because dependencies can easily derail entire projects.

A resource management plan is integral to a project’s success, but someone has to take charge of it.

Responsibility In Resource Planning In Project Management

Using a resource management plan, project managers can manage the delicate balance of demand and capacity. The plan gives a comprehensive view of everything that is required and everything that is available. 

With that information, project managers can shift resources around as needed as the project progresses. Resource capacity planning works well when the project manager takes the lead to create the plan and references it often to ensure the project is on track.

Project managers often oversee multiple projects at the same time, which usually requires using resource management software. A resource planning tool provides the infrastructure so that your employees can focus on the details. This kind of tool, sometimes included in a broader project management software, can help contribute to project success and better resource utilization.

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Reasons Resource Planning Is Necessary In Project Management

Resource planning is one of the main elements in project management that helps ensure a project’s success. 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. When organizations invest time in planning ahead, they can prevent potential failures along the way.

Why It’s Important To Forecast Resource Demand And Capacity For Project Management 

The following reasons illustrate a few examples of why resource planning and resource forecasting are necessary components of project management:

  • Visibility of resources and timelines: Project managers can clearly see how the logistics of one project fit in with others at the company, eliminating issues like conflicting deadlines or miscommunication. For example, they can use a Gantt chart to see the overall project schedule and all the steps that contribute to it. This visualization helps you identify areas where your teams might be overextended.
  • Allocation of resources: Project managers can use resource planning tools to identify the right employee for a particular project. By taking time to strategize staffing, project managers can effectively use resources and continue to develop their team member’s specialized skills.
  • Accountability of time: Project managers can 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: Project managers can forecast resources needed in the future based on the current projects as well as any projects that are likely to come up soon. It’s important to forecast resource demand and resource capacity to ensure sufficient resources are available.
  • Analysis of budgeting: Companies can use resource planning to perform a detailed budget analysis. Business owners can determine the costs of each component of an upcoming project to ensure pricing is set appropriately.

How Neglecting Resource Planning Can Lead To Negative Outcomes

Resource planning helps companies see the full scope of a project and use resources effectively. When companies neglect project plan creation, it can lead to the following consequences:

  • Resource scheduling conflicts can lead to project delays.
  • Employee departures can cause gaps in knowledge due to poor documentation of project progress.
  • Incomplete project resource planning can lead to different expectations between the company and the client.

Also recall that resource planning can influence the viability of future projects and their timelines.

Benefits Of Resource Planning In Project Management

Resource planning is a necessary component of project management, and it can also bring added benefits to a company. Let’s take a look at a few examples that show how using resources well can benefit your company.

Cost Savings

Resource planning helps you with resource allocation so you efficiently assign projects at the right time. For example, if an employee with specialized skills is needed to complete a project, you can defer starting that project while the employee is out of office. That way, other employees don’t waste time getting started on a project that can’t be completed yet.

Time Savings

Resource planning helps you track project efficiency. It can help you identify employees that are more efficient at certain tasks than others. It can also help increase project management efficiency overall. By using one convenient tracking system, project managers can see all the details in one place, reducing the amount of time needed to oversee projects.

Customer Service Improvements

By investing in resource planning, you gain expertise about all the components of a client’s project. You’re able to appropriately communicate expectations to them and answer questions as they come up. This level of organization helps customers trust you more because of your hands-on knowledge of all the details.

Team Improvements

When all employees are in the loop and understand expectations, you facilitate stronger teams that work well together. Resource planning helps prevent miscommunication and empowers employees to take ownership over their roles in a particular project.

Future Preparation

Resource planning allows companies to plan projects far in advance because they know the available resources and the anticipated demand. Companies can then prepare for upcoming projects based on this information. With a road map planned out in advance, companies can adapt to any changing needs or new clients because the required projects are already handled.

Increased Flexibility

Project resource management matches roles to needs in an organized plan. Companies still want to staff the best employee to a project, but project planning allows project managers to replace a role if needed. If an employee involved in a project leaves the company, the project manager can easily pull in a new person for that role. 

Similarly, if timelines need to change, companies can rearrange other resources in the project plan to adapt. The project plan makes it clear how all the project pieces fit together so companies can adapt with agile project management.

What To Avoid With Resource Planning In Project Management

Resource planning is an important component of project management, but there are also challenges to navigating the process. It’s not enough to simply create a project management plan. Consider the following risk factors so you can avoid common mistakes:

  • Not understanding your needs: A project plan isn’t effective if it doesn’t accurately represent all your anticipated needs and every available resource. It’s important to invest sufficient time in the project planning process so that you account for everything and don’t encounter surprises later.
  • Not following up on outcomes: Throughout the project management process, companies should compare their projections to their outcomes. Did the estimated resource costs match the actual costs? Did a project take more hours than anticipated? Project managers need to analyze outcomes to identify areas for improvement and make better project plans in the future.
  • Not holding teams to commitments: Project plans can aggressively promote efficiency, but they might have the opposite effect if they are unrealistic. If deadlines are too aggressive, employees might grow accustomed to missing deadlines, which negatively impacts your clients. By setting realistic expectations and following up on missed commitments, you can help your teams stay on track.
  • Not anticipating hiring needs: Business owners need to 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. Forecast into the future to anticipate your project needs. That advance planning allows you to train new employees in time for peaks and account for natural employee turnover.
  • Not limiting scope creep: When you get started on a project, it’s common to start seeing related needs that you didn’t consider before. However, if you continue adding new tasks to your project, you risk missing deadlines or significantly increasing costs. To limit scope creep, companies can set clear expectations about what is and isn’t included in a project. Alternatively, they can include buffer time and resources to address critical additions that come up later in the project.

Resource planning is complicated but integral to success. It becomes easier to navigate when you possess the necessary information to assemble your resource management plan.

Important Resource Planning Strategy Elements

Overall, the most important elements of a resource planning strategy are capacity planning, demand forecasting, and accountability. Project managers need to understand what their company is capable of producing and how much their customers need. 

They also need to follow up to hold employees accountable to project timelines and expectations. With these three components, companies can keep projects on track and continue to finetune their resource planning strategy.

Continue Learning About Resource Planning In Project Management

Companies use resource planning in project management to allocate and track resources throughout the project’s duration. With a resource management plan, companies can adapt if they encounter challenges, which leads to more positive outcomes. For more information and tips about project management, subscribe to The Digital Project Manager.

Related Read: How Project Managers Can Master Resource Management Tasks

By Galen Low

I am a digital project management nerd, a cultivator of highly collaborative teams, and an impulsive sharer of knowledge. For the past decade, I've been shaping and delivering human-centered digital transformation initiatives in government, healthcare, transit, and retail. I'm also the co-founder of The Digital Project Manager and host of The DPM Podcast.

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