Getting Started with Resource Planning? Use the 80-20 Rule

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The Pareto principle, or the law of the vital few, proposes that roughly 80% of the effects of a situation come from 20% of the causes. I believe this is also accurate for both project management and  resource planning.

I'd venture to say 80% of an organization's project and resource problems can be solved by getting 20% of the necessary processes and data in place. Likewise, most resource bottlenecks can probably be isolated to 20% of the resource pool.

Using this approach, where should you begin with resource planning? If knowledge is power, then visibility is king. Thus, I'd start with building the basic visibility of three elements:

  • Supply
  • Prioritized Demand
  • Effort Forecasts

For Supply, simply capture a list of your people and their capacity by time period, at least for the next six months (e.g., Johnny has 1 FTE (Full Time Equivalent) available per month for the next six months. If you can easily capture their primary skills and other information like rate and cost center, even better. Or you can do that later.

For Prioritized Demand, capture a list of active and upcoming projects, and try to give it some kind of priority grouping. Numbers work better than letters because they're easier to sort. Later you can worry about more detailed prioritization methods, such as scoring and ranking. For now, just enter the projects, whatever information about them you have available, and a priority grouping (e.g., 1000, 2000, 3000, etc.).

Once you have your supply and prioritized demand, now you're in a position where you can enter effort forecasts.

This, too should be simple. You don't even need full project schedules yet. Simply forecast for the next six months, the skills and/or named resources that you'll need on your projects (at the project level) by time period. 

For example: For Project Alpha, we need a business analyst in the amount of 1 FTE per month for June, July, and August. If you want to forecast by week, even better, because then you'll have more granular visibility of when this role might be freed up to take on other work. If you know the named resource, then forecast the person instead of the role. At this point, you don't need to know which task they're required for. This is just a high level effort forecast.

This is what it might look like if you had three projects with a three-month FTE forecast. 

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Notice that Joe is already fully booked on a high priority project (Alpha), so trying to book him for a lower priority project (Beta) in August forces the red alert. Also notice that the Gamma project needs a business analyst for August, but Sue is already booked on Beta. Since Gamma is lower priority, unless there are other business analysts in the organization, there may be a delay in that project. 

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Hopefully, you can see how, with just this basic information, now you have the data to know:

  • who's booked on what projects
  • which new projects you can take on and when
  • which roles/people are overbooked or underutilized
  • which projects will run into resource issues
  • whether your people are allocated to the most important work
  • whether high priority projects are not getting the resources they need
  • and more. 

Notice we didn't talk about timesheets. Unless the work your people are doing is billable, or unless time-tracking and/or actual costs are required for regulatory purposes, this can come later. Aside from the above reasons, tracking actuals can ultimately be useful for historical analysis when developing future estimates. It can even be done just for specific projects.

Keep in mind, for the purpose of historical analysis, there are other ways to extrapolate actual cost information that would likely be every bit as accurate as timesheets. Let's face it, no matter how quick or easy it is, nobody likes entering timesheets. And when people enter their time at the end of the week, the likelihood that you're getting a reasonably accurate picture of what they spent time on that week is slim. If you absolutely must have accurate time tracking data, have people enter it daily and make it EASY. They can submit it at the end of the week.

What about non-project work? After all, people spend lots of time on that too. 

Glad you asked, since it's an important part of the demand picture. 

You can do one of three things to account for non-project work.

  1. Do nothing. Assume people will have other things going on and account for it in your project time estimates.
     
  2. Reduce people's capacity (let's say, by 25%) to allow for the non-project time they may spend doing support work or attending meetings. 
     
  3. Or, if you want more granularity, you can create an annual "bucket" project for each area of non-project activity (e.g., consulting, meetings, admin, etc.), and forecast resource effort for those activities just as you would a project.

If this all seems like too much work to start with, remember the 80/20 rule. You could start by maintaining forecasts for the 20% of resources that tend to cause the most bottlenecks. You may not get the full benefits of broad visibility, but it's a start.

Once you get the resource planning basics down, then you can move on to better portfolio reviews, improved project execution, greater strategic alignment, and more. But it all starts with basic visibility of supply, prioritized demand, and effort forecasts. 


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Jerry Manas is the bestselling author of The Resource Management and Capacity Planning Handbook, Napoleon on Project Management, and more. At PDWare, Jerry helps clients improve strategy execution through tools and processes that align people and work with organizational priorities. Connect with Jerry on Twitter and LinkedIn