What is Resource Forecasting?

Resource Forecasting is the planning and organization of staffing levels and other resources to match them over time with the inbound pipeline of work.

Resource Forecasting Diagram

Balancing Staffing for Profitability

Resource forecasting lets you balance your staffing levels over time and match them to the pipeline of incoming work.

Take, for example, the situation where your firm has been hired to produce an app for a client. Your development team completes the work and hands it off to the testers to test before it is presented to the client. The clock is ticking. You don’t have enough testing resource so the testers are working overtime to review the product. The developers are sitting around doing nothing, passing the time until the results of the tests are in and they can address any bugs.

You’ve got people under-utilized, others over-utilized, and a client who is being kept waiting. That’s an unsatisfactory situation for any leader who wants to run a lean business with high profit margins.

Great managers can juggle their resources to avoid situations like these but it can be a challenge. The resource profile of a business is constantly changing, with people moving to different projects, taking time off work for sickness or vacation, and so on. Even in businesses with low employee turnover, we still find that the resource pool is evolving, shifting and changing regularly.

As we see fewer and fewer projects start on a Time and Materials basis, being able to manage your cost base is even more important. Gaining margin on fixed price contracts is an easy way to increase your profit levels – so it’s essential to get easy access to data that will help you do that.

How to Improve Resource Forecasting

The data that you need to do accurate resource forecasting comes from inside your professional services tools. You have an incoming pipeline of chargeable work, your resource availability and skills profiles, and employee timesheets. This all gives you a rich seam of data from which to draw information for decision making.

Bringing together these disparate sources of information is easy when you have consolidated PSA tools. Resource forecasting is a software feature that gives you a real-time window into your team’s capacity and workload, making it easy to incorporate forecasting tasks into your daily work without it taking up too much time.

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The Best Reports for Resource Forecasting

Resource forecasting relies on having good data. All of this sits within your reporting tools. At its most basic, you want to compare upcoming resource requirements with resource availability. Look for:

  • Days, weeks and months where you have more work to do than available resources
  • Days, weeks and months where you have under-utilized resources in any given area or team.

You can then think about how to address these gaps. For example:

  • Bring forward the start of new work to keep team members busy
  • Schedule staff training for teams which will not be fully occupied during a particular time
  • Reprioritize tasks where resources are overallocated to allow them to focus on the most important and profitable work, rescheduling other tasks for a different time
  • Shift underutilized team members to other tasks like supporting proposal development, internal process improvement or providing technical support.

You can probably think of other actions, appropriate to your business, that will enable you to better manage your incoming work and resource availability. When you have the data at your fingertips, you can make real-time decisions on how to use your workforce in the most profitable way.

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Resource Scheduling Across a Project Portfolio

Resource forecasting and capacity planning in professional services firms is made even more challenging because your team members are probably working on more than one client project at a time.

There are often periods of downtime on projects, for example, where a deliverable is sent to the customer for review and you are waiting on their approval before moving to the next step. This is where your employees could pick up tasks for another client, or keep another project moving in parallel.

While it’s good business practice to keep your staff fully utilized, it can be tricky to do with ad hoc ways of reporting time. Capacity planning on spreadsheets soon becomes untenable in teams of 10 or more.

Managing your team’s availability becomes even more crucial when you have multiple client initiatives on the go at the same time.

The $10k Services Automation Difference

Professional services automation does give you the edge when it comes to profitability, because it’s easier to see what’s going on in your business and make the right choices for your teams. You can forecast more accurately because you’ve got the information that helps you plan and schedule work.

For example, introducing PSA tools can increase billable employee time by over 7%. That may not seem like much but when you translate that to cash, it can mean each employee bringing over $10k more revenue than before.

In order to forecast accurately, you need the tools operating behind the scenes in your business. It can feel like a big step to implement those tools, but it doesn’t have to be. Plus, integrating professional services automation software can pay for itself through helping you save money, and grow profits.

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