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Ultimate Guide to Resource Planning

Focusing on how to best use people to achieve essential activities helps organizations drive themselves forward in the information economy. Without a realistic view of who makes up your workforce, how much time your people have to spend on project tasks, and what they need to get the job done, your project and business plans won’t succeed. This article features an overview of resource planning and explains why it is essential to project management. Plus, you’ll find a variety of free resource chart tools and learn more about expert resource planning techniques to start planning how you will maximize your most important — and most limited — resources.

 

Why Is Resource Planning Important in Project Management?

Resource management is an essential project management process and a core activity of human resource management — from large enterprise to small startups. Managing projects requires managing resources. Whether the project is developing a new software feature or the construction of a new building, resource planning directly contributes to the project’s end result. An over-resourced project wastes time, those with too few resources risk missing critical milestones, and those that use the wrong resources won’t meet expectations. Project managers need to understand what resources a project needs and what resources the project already has before developing accurate project plans.

The topic of resource planning, allocation, and management is often associated with people planning activities common to human resource management (HRM) and planning. Human resource management is an approach to acquiring, training, controlling, managing, and measuring people resources, and human resource planning is a strategy to add value to a business or organization by supporting people activities like training, compensation, safety, and communication. Resource planning is associated with different industries and approaches as well, including the following:

  • Enterprise Resource Planning (ERP): ERP refers to the combination of business processes and information that joins disparate functions of companies (like accounting and HR) with the manufacturing or product development and service-side functions of a business or organization. ERP software (like Microsoft Project) supports resource planning activity at Fortune 500 corporations and large companies that scale operations for thousands of projects including manufacturing.
  • Material Requirements Planning (MRP): A planning and control system for inventory, production, and scheduling. MRP is an approach to handling material resources that involves converting a master production schedule into a detailed breakdown of the raw materials used in civil engineering, commercial real estate, and fabrication industries. Manufacturing and resource planning (MRP II) replaced MRP as the standard, and ERP expanded the reference to accommodate HR and financial activity.
  • Utility Resource Planning: This activity involves estimating the demand to be met by the utility resource (for example, natural gas, the reliability of the resource, the costs of available resources, and government policies and regulations to consider).
  • Integrated Resource Planning (IRP): A type of roadmap tool used for utility resource planning developed in collaboration with government agencies, industry advocacy groups, developers, and other project stakeholders.
  • Natural Resource Planning: This refers to the management of natural resources such as land, water, soil, plants and animals. By contrast, distribution resource planning (DRP) refers to a method for planning orders within a supply chain

Agile Resource Planning Template

Agile Resource Planning Template

This resource capacity planning template includes a Gantt chart feature to visualize and plan resources for Agile software project sprints. Use this template to chart software development resources by quantity and skill type (for example, PMs, analysts, developers, designers, product managers, administrators, etc.). Modify the template to view the distribution of your team’s time and activities across your Agile sprint calendar (expressed in two week intervals in this template).  

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Optimize the Resource Planning Process

Project resource planning involves the allocation and utilization of different types of resources, including people, materials, equipment, and financial capital. The term “resources” generally implies all of the things that a project manager or business depends on to deliver products and services. In the context of this example, the term means human resources. People planning is different from physical resource planning.

First, identify the resource requirements for your project schedule: What type of skilled people do you need to complete project tasks? Will you use internal employees or contract resources from external vendors? Do you have the materials, software, and equipment to supply team members with to empower their work? This step involves documenting project roles and responsibilities, organizing project teams based on competencies, and creating resource control plans for managing change and relationships.

Next, determine the cost and duration of the needed resources across the entire project schedule. Use resource forecast techniques and tools, including project management software, to assist with creating an optimized resource plan. Decide on the range of competencies needed (by project task) and determine if you need to change project scope, plan additional training, or provide subject matter experts. This step is both quantitative (in that you use information such as previous project schedules, budgets and reports, and data analysis) and qualitative (due to the people planning component).  

Finally, create a resource schedule and calendar and determine if you have the resource requirements to complete the entire project schedule on time. Anticipate what-if scenarios to determine worst-case resource management scenarios. List individual project resource activity and make sure all tasks are assigned to a specific resource.

Using spreadsheet software to create resource plans has its limitations. Managing data manually increases the chance of forecasting errors. Project resource plans are living project documents, meaning real-time analysis of the data is critical to success. The risk of overwriting or deleting spreadsheet resource plans, or of creating multiple versions across a distributed project team, is high. Consider investing in project management software to stay on schedule and optimize your resource planning and management.

Project Resource Plan Template

Project Resource Planning Template

Use this project resource planning template for multiple types of project and portfolio management scenarios. Schedule human resources and non-human resources (like material and equipment) in separate sections for easy analysis based on each project phase, from project origination to execution. Plan and estimate the cost for full-time employees, freelance consultants, contingent staffing, software, hardware, and more.

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Resource Planning Tools and Techniques

Resource management software tools can automate tasks and track work hours against budgets, provide color-coded visualization charts to help monitor scarce resources in real-time, and share big picture data for portfolio managers to track what-if scenarios across multiple projects and teams. Resource management strategy includes various processes for organizing and managing project teams.

Resource planning involves the strategic use of human and non-human resources to develop products and services under deadline and budget restraints. Software tools help simplify resource planning, but the human element to project resource management requires more than technology to manage. Different techniques exist to assist resource planning and manage project teams, including the following:

  • Resource Meetings: Short, frequent, action-oriented meetings give project managers a forum for discussing roles and responsibilities related to resource planning. The meeting focuses on sharing fact-based information and short-term planning for critical project activities and tasks. These meetings help create project culture and provide leadership with a frequent control for corrective action and clarification.
  • Resource Leveling: This is a technique to optimize resource allocation by adjusting the project schedule over time to resolve conflicts caused by the over-allocation of resources. According to the PMBOK guide, these project schedule adjustments may affect critical path.
  • Resource Smoothing: A technique to optimize resource allocation using free float (or total float) without affecting the critical path. The PMBOK defines free float as the “amount of time that a schedule activity can be delayed or extended from its early start date without delaying the project finish date or violating a schedule constraint.”
  • Resource Availability and Utilization: A resource planning technique to ensure that the project’s allocated resources are actually available. This is done by calculating the cost to use them, monitoring planned versus actual use of resources, and taking corrective action.
  • Resource Capacity Planning: A planning technique used by portfolio managers that oversee resource planning and manage multiple projects. Capacity planning involves determining if the allocated resources are sufficient enough to complete new projects and determine if the amount of resources, or the level of skilled people, is sufficient on existing project teams.

 


What Is a Resource Planning Chart?

Resource planning software includes features to create resource planning charts like Gantt and RACI (responsible, accountable, consulted, and informed) charts to help project managers visualize, plan, and manage resources for the project schedule. Project managers use resource planning charts like Gantt charts to find the critical path, a color-coded network diagram that displays a sequence of activities through the project schedule, the duration of each task, and the longest path from the start of the first project activity to the end of the last activity. The PMBOK guide recommends using the critical path method (CPM) to determine the shortest possible duration of a project schedule.

Staff Resources Planning Template

Staff Resource Planning Template

Resource management involves assigning tasks, roles, and responsibilities to your project teams to clarify process and participation. This resource planning template combines a RACI matrix and a histogram feature. Use these tools to visualize and plan project activity and create an optimized project schedule based on staff resources.

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What to Cover in Your Resource Management Plan

Resource plans guide how to allocate, control, and use resources. In addition to this practical function, resource management plans can help earn stakeholder buy-in and get project budgets approved. A physical resource management plan advises project managers on the use of materials and equipment. Human resource plans specify the type of skilled people needed to complete a project, and the quantity, cost, and scheduled duration of their given activities. Before implementing your project plan, modify and organize the resource plan to assign every individual project task to the appropriate person. A sound resource plan includes the following information:

  • Resource Identification: The type of people or material resource needed, name, title, source (if contracted), and the assigned project team.  
  • Resource Cost: The direct or estimated resource cost.
  • Resource Requirements: The information about the resources available, including when they’re available, any conditions, and the duration of their availability.
  • Roles and Responsibilities: The specific function(s) that people resources perform for the project. This information might list the resource authority, including decision-making and approval authority.
  • Resource Quantity: The amount of this type of resource (for example the amount of labor hours, equipment, or materials).
  • Resource States: The current state of the resource (planned, requested, approved, denied, allocated, confirmed).
  • Resource Locations: Where is the resource located, including virtual resources and co-located teams.
  • Resource Organization: A graphic display of the project team and their relationship to other project team resources.
  • Resource Calendar: The scheduled working days, shift hours, start and end dates for different project milestones, and scheduled holidays. Resource calendars identify the duration of work for specific resources.
  • Resource Issue Log: The information on resource planning challenges, for example in acquiring skilled resources, and problem-solving steps that worked to keep project resource plans on track.

What Is a Resource Forecast?

A resource forecast is a quantitative assessment of conditions and events used to estimate the amount of resources, and the cost of a project’s planned, allocated, and actual resources. This forecast is based on information available when the resource plan is developed. Activity duration estimates forecast how long each project activity will take. This is a useful technique to determine cost and quantity of people resources required, expressed in hours, weeks, days, or months. PMI lists various forecasting tools and techniques in the PMBOK guide, including the following:

  • Bottom-Up Estimating: Evaluate the small details, like individual project activity duration by resource, from an aggregate breakdown of the total scope of work. Use this technique to forecast the duration of individual assignments, or cost of skilled resources, by adding up all of the lower-level estimates of resource cost and consumption to determine a total estimate. This process is accurate but time consuming.
  • Reference Published Data: Leverage published reports, articles from industry journals, and public data from organizations like PMI to create resource forecasts using this data to create estimates. This is a type of analogous estimating, which is defined in the PMBOK as “a technique for estimating the duration or cost of an activity or a project using historical data from a similar activity or project.”
  • Parametric Estimating: Project management software features an algorithm function to perform parametric estimating. Use this tool to forecast resource cost or estimate resource duration based on the project resource parameters and historical data.
  • Three-Point Estimating: Use a realistic estimate, an optimistic estimate, and a worst-case scenario estimate of project labor to forecast resource costs by applying the average of the three estimates.

Team Resource Planning Template

Team resource Planning Template

Use this template to forecast your project team’s bandwidth (expressed as work hours) using a heatmap visualization. Customize the template to reflect your team’s availability based on resource allocation of work hours. This is a resource utilization tool designed to help you plan and manage your team’s demand and quickly populate data based on project hours allocated and utilized.

Download Team Resource Planning Template – Excel

 

Improve Resource Planning Efforts with 10,000ft by Smartsheet

Creating and maintaining accurate resource plans that account for both people and materials is essential to the success of any project. Successful project managers know that they need a software solution to guide them through every step of the process and provide key stakeholders with the visibility they need.

10,000ft by Smartsheet is a powerful resource management software designed for stronger teams and more successful projects. With 10,000ft, you can more easily build the best team for a project, keep project schedules and budgets on track, and confidently forecast business needs. 

Leverage the portfolio-level planning and resource management capabilities to find and schedule the right resources, view how work is progressing, forecast upcoming hiring needs, and get a complete picture of all moving parts of a project so you can see who’s available and make changes as the project moves forward. 

If you’re looking for a powerful and effective way to manage your resources, see 10,000ft in action.

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