According to a PMI survey, “26% of companies with a dedicated resource
planning solution can estimate and allocate resources to deliver projects on
This data illustrates the significance of resource planning in identifying and streamlining resource allocation for timely delivery of projects.
However, the absence of an efficient resource planning process can lead to low productivity, budget, and schedule overruns. This can affect project progress, the firm’s day-to-day operations, long-term business strategies, and financial standing.
Therefore, to ensure organizational success and sustainability, it is imperative to adapt the resource planning process to utilize the workforce to its maximum potential. This will encourage employee engagement and foster a healthy business environment.
This blog discusses various benefits of resource planning and how Saviom‘s advanced resource management software can help.
Let’s begin with the basics:
- 1 Resource Planning: Definition & Example
- 2 Key Benefits of Resource Planning in Project Management
- 2.1 1. Reduces project resourcing costs significantly
- 2.2 2. Forecasts resource requirements for pipeline projects
- 2.3 3. Facilitates efficient allocation of resources
- 2.4 4. Improves profitable resource utilization
- 2.5 5. Creates the right mix of permanent and on-demand workforce
- 2.6 6. Ensures timely delivery of projects within budget
- 3 How advanced resource management software can help?
- 4 Conclusion
Resource Planning: Definition & Example
Resource planning is a strategic approach to identifying, forecasting, and allocating resources to projects at the right time and cost. It helps organizations achieve maximum efficiency and optimized utilization of resources. This includes gaining visibility into future projects, identifying resource requirements, and bridging the gap to eliminate potential project risks.
You can consider the following example to gain a nuanced understanding of the concept:
Suppose a marketing firm has received a project to develop a long-term digital marketing campaign for a global client. First, project managers will evaluate the client’s requirements, assess the project’s scope, and estimate number and type of resources required. Then, they will request resources such as SEO analysts, copywriters, and content marketers from resource managers to meet this demand.
Later, the resource manager will assess the requirements and compare the existing resource capacity against the project demand to identify shortages or excesses. Accordingly, managers can apply suitable resourcing strategies, such as training, hiring, etc., to bridge the gap. The capability to forecast requirements and develop a strategy for effectively identifying, allocating, and utilizing resources and their competencies is resource planning.
Now that’s established, let’s examine the advantages of resource planning.
Key Benefits of Resource Planning in Project Management
A dynamic resource plan is crucial for the overall efficiency and success of the company. So, let’s delve deeper to understand how it contributes to this goal.
1. Reduces project resourcing costs significantly
When there is a lack of an appropriate resource planning process, managers will not have enough lead time to determine whether they have sufficient resources within the organization to meet project demands. In the event of resource shortages, managers often resort to last-minute firefighting and hiring of high-cost resources, thereby increasing project costs.
But with an efficient resource plan, managers can make data-driven decisions and implement accurate resourcing measures at the right time. To reduce costs, managers can allocate a cost-effective global, local, or benched resource to a task. This helps maintain project profitability without compromising quality and eliminates cost escalations.
2. Forecasts resource requirements for pipeline projects
Timely delivery of projects within the stipulated budget plays a vital role in an organization’s growth and success. However, with efficient resource planning and forecasting, managers often cannot predict pipeline project requirements ahead of time. This can result in last-minute firefighting for resources and project delays.
However, resource planning enables managers to analyze the project requirements and identify excesses or shortages in advance by comparing the demand against the existing capacity. Based on this data, we can implement appropriate resourcing treatments such as training, upskilling, hiring, etc., to bridge the gap ahead of time.
3. Facilitates efficient allocation of resources
Competent allocation of resources is essential to maintain the quality of deliverables. Nonetheless, in the absence of a resource plan, managers might allocate under or over-skilled resources to projects. This improper resource planning and allocation may lead to budget overruns, poor project quality, and delayed delivery.
But competent resource planning facilitates identifying and assigning resources to project tasks based on skills, availability, cost, and other selection criteria. Thus, an efficient resource plan will help them allocate the best-fit resources to the project at the right time, directly contributing to project success.
4. Improves profitable resource utilization
In the absence of robust resource planning, organizations tend to allocate work beyond their capacity and overutilize resources. This excessive workload eventually leads to stress and burnout. Conversely, the lack of visibility into utilization levels can also result in underutilization, where skilled employees are allocated to non-billable tasks.
Resource planning and forecasting provide insight into utilization rates of resources. It helps to mobilize resources from non-billable to strategic/billable projects to boost financial returns. Furthermore, it prepares managers to implement resource optimization methods to prevent overutilization of resources. This enhances workforce performance, boosts productivity and engagement.
5. Creates the right mix of permanent and on-demand workforce
Without effective resource planning, managers cannot accurately determine whether resource requirements are short-term or recurring needs. This leads to frequent hiring/firing cycles, increased overhead costs, and compromised project quality. To avoid this, managers must create a balanced mix of a permanent and on-demand workforce that caters to evolving project requirements.
Resources planning helps managers assess skill requirements and determine whether the skill demand is one-time or recurring. Based on this, they can hire permanent resources for recurring demands and an on-demand workforce for one-time needs. This allows them to strike the right balance between resources, avoid unnecessary firing cycles, and meet project deadlines.
6. Ensures timely delivery of projects within budget
If resource planning is not in place, managers might be unable to identify and allocate competent resources or review employee performance effectively. As a result, they cannot implement corrective measures in case of potential complications during project execution leading to delayed project delivery.
An efficient resource planning process will assist managers in ensuring that project resource requirements are fulfilled appropriately, and cost-effective resources are allocated to them. In addition, they can regularly track and monitor employee utilization and ensure the timely completion and delivery of projects.
Now let’s see how modern resource management software helps you yield these benefits.
How advanced resource management software can help?
Saviom’s resource management software enables organizations to yield the benefits of resource planning in project management.
The resource planning tool offers 360-degree visibility of all enterprise resources and a centralized, accurate, real-time view of their critical attributes, such as competencies, skills, cost rate, etc.
Additionally, the forecasting feature helps managers plan their capacity and resource requirements ahead of the curve to bridge the capacity vs. demand gap and ensure competent resource allocation.
Furthermore, the tool generates color-coded heatmaps and utilization reports, allowing managers to view the utilization rates and implement corrective measures if employees are over or underutilized.
Resource managers can also perform scenario-based modelling and simulation techniques (what-if analysis) to identify the best possible outcome. Accordingly, the resource manager can form the right resource mixes before applying them to the actual resource plan.
All these features of the resource management tool facilitate efficient resource planning.
Resource planning is critical for project delivery efficiency. Organizations without an efficient plan to manage their workforce incur the cost of poor resource management.
Methodically planning your resources will enable businesses to identify and assign them to the best-suited projects, securing the company’s bottom line. Consequently, mastering resource planning and management should be the top priority for any project-based company.
So, has your organization implemented resource planning yet?