Blog

5 Benefits of Capacity Planning

What is Capacity Planning?

Capacity planning is the process of working out how much resource you need to meet demand. Whether you’re checking you have enough staff to meet demand next year, or just trying to work out who is around next week, capacity planning is the thought process behind establishing if you have enough people to do the work.

Why is Capacity Planning Important?

It sounds great in theory, but in reality, the organizational structures we see in companies today make it a difficult job.

Managers are struggling with challenges like:

  • Remote workers
  • Matrix structures
  • Autonomous teams
  • Shifting and conflicting priorities
  • Tasks that are difficult to estimate
  • Understanding actual work versus planned work.

It’s not easy to stay on top of who is where doing what. Often, managers end up making a best guess about how long something will take or whether they have the right staff available to do the work.

Read next: How to Optimize Billable Resources

However, there are tools you can use to take the headache out of capacity planning. And it really is worth it. You can address the challenges above, and benefit from a host of other advantages that help streamline your business processes and drive efficiencies.

Here are 5 benefits of resource capacity planning.

Benefit #1: Reduce Resource Costs

Capacity planning lets you identify the least expensive way of meeting upcoming resource needs. For example, let’s say you have a new assignment from a client that requires an IT developer. Any IT developer from the team will do. You know they can all do the job. However, there are some very experienced people in the team – and they are very expensive to put on jobs.

Capacity planning lets you see what everyone is working on. You can make changes to upcoming task assignments and projects based on the team’s skills as well as their availability.

To go back to our example: Neil looks available to take on this work. He’s one of the most expensive resources in the team as he is awesome and has years of experience. Clara is just as capable of doing this easy job. She’s a recent graduate. She’s not available at the right time, but she is in a week or so.

Using the capacity planning process, you can decide whether it is worth delaying the start of the project by a week to reduce overall resource costs on the project by using Clara instead of Neil. You don’t have to, but all the information is made transparent for you to make the best decision.

When you do capacity planning, you can easily see how your people are being used. You can make better choices about resource management and how you spend your budget.

Benefit #2: Ensure Availability

Before you sign that next client contract, are you really sure that you have the team to deliver the work?

Capacity planning shows you what scope you have to take on new projects. Your people need to be available, or you need to be happy about bringing in extra resources to help deliver.

Don’t get caught short: check your resource reporting to make sure that you won’t let clients down or overstretch your team.

Pro Tip: Use resource reporting via actionable analytics to help avoid burnout. When staff continually work over capacity, they are more likely to take time off work with sickness or stress-related conditions. Keep an eye on how much availability they have (or lack of it) and look after your people.

Benefit #3: Manage Your Skills Inventory

Capacity planning is strongly linked to your team’s skills inventory.

A skills inventory is a record of who can do what task, or what skills they have. This is particular helpful with technical skills. In an IT team, for example, you can list each team member’s expertise:

  • Technical programming languages: JavaScript, C++, Ruby etc
  • Web design
  • System testing
  • IT architecture
  • System security

And so on.

When you come to allocate someone to the task, you can quickly see if they meet the brief. Whether you need a lawyer with international data protection experience or a project manager, you can search your colleagues to find the right fit.

As and when your team members develop new skills, you can update the skills inventory. You can use the inventory to regularly check that the skills in the business are appropriate to deliver your strategic initiatives, and take steps accordingly if not. That brings us to…

Benefit #4: Identify Skill Shortages

So you’ve just taken on a big project for the Sales team. Congratulations! Except… the project involves a whole lot of big data skills that you don’t have in-house.

Another great thing about capacity planning is that it lets you see this kind of issue early. You don’t have to start the project before you realize that you are missing the skills. When you plan your work in advance, you can see who is available and what skills they have.

Capacity planning makes it easy to spot skill shortages. Armed with this information, you can do something about it. For example:

  • Revise the brief so that you are using skills that your team already has
  • Recruit externally to add temporary or permanent resources to the team with the skills required
  • Train your existing team members in the new skill.

Your skill shortage might not affect the whole team. You may have one person with the right skill and you need three. The skilled resource could mentor, coach or train their colleagues to address the gap.

When you manage your resources with capacity planning, you get the opportunity to forecast what your training needs might be. You can look forward to the kind of work you will be doing next year and make sure that you are supporting your team to develop in ways that allow them to deliver what is required.

Benefit #5: Book Resources

Finally, use enterprise-wide systems that also let you book resources direct to projects. This is a huge help in a matrix structure where many project and operational teams are relying on the same pool of people. If someone is booked, they’re booked, and this helps everyone plan their time efficiently.

Flag up conflicts, highlight people or teams who are taking on too much, and spot gaps where people can be better utilized with additional tasks.

With today’s business challenges, it’s no longer appropriate to allocate people to tasks on a ‘you’re available so you’ll do’ basis. Managers have to be more strategic about how they use their teams and on what. And always with a view to what is coming in the future so the organization is prepared to deliver new projects.

Think of capacity planning as a secret weapon to help you balance the challenges of finding and allocating people to work in an efficient manner.

With the right people doing the right work, and with strong project management systems in place, you’ll improve the success and predictability of projects across your organization.

Want practical tips on how to improve your project outcomes with better resource management? Check out these additional resources:

More resources

Blog
Dispelling Email Deliverability Myths

We want to dispel some email deliverability myths, so you can start saying goodbye junk folder, and hello inbox!

Read more

Blog
How to build a smart IT financial plan that aligns with strategic growth.

Learn the seven components of a smart IT financial plan needed for growth.

Read more

Blog
Agile Project Management: Taking Your First Steps

Explore Agile project methodology and learn how to apply this in your PMO for an efficient, modern way of delivering projects.

Read more