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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.

Here's everything you need to know to get started with resource planning.

What Is Resource Planning?

Resource planning in project management refers to the process of identifying, allocating, and managing the best resources 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.

Project managers are responsible for resource planning because they are intimately familiar with the project requirements and the project plan.

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.

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 underutilized 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: Project managers 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, project managers can record the hourly rate so that it can be multiplied based on the time spent.
  • Availability: If you want to avoid delays and resource conflict, you will need to understand each resource's availability. 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 project tasks have been completed. It’s important to plan for these situations as dependencies can easily derail entire projects.

It's important for project managers to shift resources around as each project progresses. After all, resources can only be optimized if the project manager takes the lead in creating the plan and references it often to ensure the project is on track.

What Are the Stages of Resource Planning?

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.
  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.
  5. Allocating your resources for each project: Create a resource management plan for each project, detailing the usage of each resource and contingency plans.
  6. Tracking your projects: Implement proper tools for project monitoring, including timelines and resource usage, adjusting your plan as needed to accommodate changes and challenges.
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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 main elements in project management that helps ensure a project’s 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.

Here are a few reasons illustrating 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, helping identify areas where 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 the right resources and continue to develop their team member’s specialized skills.
  • Accountability of time: Project managers 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: 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 you aren't held up by resource shortages.
  • 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.

How Neglecting Resource Planning Can Lead To Negative Outcomes

Resource planning helps companies see the full project scope 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.

1. Cost Savings

Resource planning helps you with resource allocation so you efficiently assign projects at the right time. For example, if an employee with a specialized skill set is needed to complete projects, you can defer starting those projects 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.

2. 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.

3. 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.

4. Team Improvements

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

5. Future Preparation

Resource planning improves decision-making by allowing companies to plan projects far in advance, as 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 resource needs or new clients because the required projects are already handled.

6. Increased Flexibility

Properly managing resources allows you to match 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

Resource planning is an important component of project management, but there are also challenges to navigating this workflow. 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.

Continue Learning About Resource Planning In Project Management

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
  • Know exactly what, and how much of it, their customers need
  • 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.

For more information, resources, and tips about project management, subscribe to The Digital Project Manager and join our community of fellow project managers.

By Galen Low

Galen is a digital project manager with over 10 years of experience shaping and delivering human-centered digital transformation initiatives in government, healthcare, transit, and retail. He is a digital project management nerd, a cultivator of highly collaborative teams, and an impulsive sharer of knowledge. He's also the co-founder of The Digital Project Manager and host of The DPM Podcast.