Market volatility is the new norm. The last few years have seen ups and downs that are impacting market conditions continuously. The global market has constantly been having a roller-coaster ride. It is making it harder to predict what next will threaten the very growth and profitability of an organization.
In such conditions, most firms resort to reactive measures such as abrupt layoffs and halting new initiatives. It works in the short term but affects business sustainability adversely. When the situation improves, they end up hiring people whose profiles and duties are similar to whom they fired. In other words, the upfront costs of wasteful hiring and firing cycle go up.
There is a better way to deal with this challenge, which begins with establishing an effective Resource Capacity Planning solution. More and more businesses have started adopting resource planning to beat the adverse effect of market volatility.
What is Resource Capacity Planning?
Resource capacity planning is the process of forecasting the gap between the capacity and the demand for resources. It also depicts an action plan to bridge this gap. Resources in an enterprise can be people, assets, facilities, equipment, vehicles, etc.
Resource capacity planning requires centralizing information from various systems. These are human resources, capacity, skills, current/future pipeline projects, resource demand/ allocation, vacations, and non-project activities. It helps you build a single source of truth, enabling real-time forecasting of resource capacity vs. demand.
A business that gets early warnings about resources shortage/ excesses, utilization, project vacancies, on the bench, revenue, margins, etc. is better equipped to take corrective actions ahead of time.
What Does Resource Capacity Planning Include?
In modern business, resource capacity planning goes much beyond the basics of measuring the demand against capacity. It includes all these areas.
Forecast Resource Capacity vs. Demand by Timeline
A business should be able to forecast capacity vs. demand from multiple dimensions, i.e., by role, department, team, location, skills, etc. It helps in identifying short or long-term shortage/excess of resources ahead of time.
Read More: Resource Forecasting Guide for Project Managers
Tracking Competency Matrix Across the Enterprise
It is critical to track and keep competency information about the workforce up to date. The right talent can be thus identified, and resource allocation can be done to the right work. It will be based on skill, experience, qualifications, individual preferences, etc.
Forecast and Plan for the Projects in the Pipeline
The system should keep track of future potential pipeline projects and their resourcing requirements. It will ensure that the resource pool is optimally balanced, skilled, and readily available to meet the demand for new projects.
Forecast Overall, Strategic and Billable Resource Utilization
The system should be able to provide short- or long-term forecasting of billable, strategic, and overall utilization. Corrective actions can be taken to ensure high utilization and protect the profitability of the business.
Read More: Maximize Profitable Resource Utilization with Modern Resource Management Solution
Forecast Project Vacancies and People on the Bench
The system should give your business the foresight into future project vacancies. It will also highlight people who will end up on the bench due to being under-allocated, or not actively allocated. It helps the resource manager to mix and match available people against project vacancies.
How Does Resource Capacity Planning Help You Beat the Market Volatility?
Bridge Resource Shortage Proactively
Forecasting capacity vs. demand provides foresight into a shortage of resources ahead of time. This will efficiently bridge the gap by:
- Retraining existing employees.
- Smoothening the project workload.
- Hiring contingent resources ahead of time.
Forward Plan and Utilize Excess Resources
Forecasting capacity vs. demand foretells excesses of resources ahead of time, so that surplus resources are not wasted. It can help you in:
- Bringing forward future projects
- Selling resource time aggressively
- Restructuring capacity in different areas
Build On-Demand Workforce
With an efficient capacity planning, a business can foresee and build an on-demand workforce by hiring flex workers. Some of the examples of flex workers are contractors, casuals, part-timers, freelancers, etc. It helps in meeting the temporary shortage of resources without any permanent cost overhead and minimizes hiring/firing costs.
Reduce project resourcing cost across the enterprise
With the help of efficient capacity planning, overall resourcing cost can be reduced drastically:
- Eliminate under/over skilled resources on projects.
- Utilize cost-effective global resources without compromising quality.
- Avoid last-minute hiring cost with proper capacity planning.
- Minimize wastage due to on-the-bench resources.
Read More: Project Resource Management: An Ultimate Guide on How to Master it
Improve Billable Resource Utilization
The capacity planning system forecasts billable utilization of resources ahead of time so that you can transfer resources from non-billable or low priority work to billable or high priority projects.
The Glossary
Read More: Glossary of Resource Workforce Planning, Scheduling and Management
The SAVIOM Solution
SAVIOM is the market leader in providing a robust Capacity Planning Solution to plan proactively. It has more than 20 years of experience working with high valued global companies around the world. SAVIOM also provides tools for project portfolio management, professional service automation, and workforce planning software. So, SAVIOM can help your business to establish an efficient system geared towards your specific business challenges.
