Resource Capacity is the ultimate governor of effective demand forecasting. After all, work cannot get done without people. Human capacity is also the biggest asset (and expense) in most organizations. An organization’s workforce is finite. Therefore, it is vital to understand whether you have adequate capacity, the right skill sets, and the most optimized workforce for your budget to meet your strategic objectives. After all, without the right resources, you can have the best strategic plan in the world, but you won’t be able to deliver it as planned.
Resource Capacity Planning is Vital to Decision-Making
Imagine you needed to buy a car, but you had no idea what was in your bank account. You would either hold off on buying the car for fear that you couldn’t afford it. Or, worse, you would buy the car and hope for the best, only to find out you overextended yourself.
The same is true in organizations that don’t have a clear picture of their organizational resource capacity. They either avoid certain crucial projects thinking they don’t have the capacity to take them on (when in fact, they perhaps had the skills elsewhere in the organization or could have had contractors prepared to assist), or more commonly, they take on everything – no questions asked – assuming they’ll “get it done somehow.” Needless to say, many of these programs and projects get delayed, staff is overworked, and budgets are overextended.
Indeed, an ounce of prevention is worth a pound of cure, just as an ounce of awareness is worth a pound of chaos. This is what Resource Capacity Planning provides—prevention of ill-informed decisions and avoidance of chaos trying to meet impossible demand.
Resource Capacity Planning Answers the Crucial Questions
Resource Capacity Planning, sometimes called Staff Planning or Strategic Workforce Planning, helps you answer the following questions:
- Do we have enough people for the roles or functions required to meet our upcoming demand?
- If not, where are the gaps? How do we address these gaps?
- Are the appropriate business units and cost centers prepared and budgeted for the expected demand on their resources?
- Do we have the right mix of employees and contractors and an understanding of the cost of each?
- Do we have the right sourcing strategy in place to meet swings in demand?
- Since human capacity is the primary source of cost for delivering outcomes, what is the true cost of our expected demand pipeline?
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Resource Capacity Planning is the Basis for All Demand Forecasting
It is impossible to forecast what work will be accomplished in the coming months and years if you do not have a clear picture of your ability to complete that work. For example, the availability of a particular skill is determined by subtracting that skill’s assigned demand from its total capacity. Once the skill’s capacity for the forecasted period is consumed, additional work should not be assigned to that skill. By observing this model and planning accordingly, you can be assured that forecasts will be feasible.
Resource Capacity Planning Enables Effective Execution
If you have the right people in the right roles and enough of the needed skills to accomplish the current and upcoming demand, then initiatives are likely to be completed as planned. Thomas Edison said, “Strategy without execution is a hallucination.” Resource Capacity Planning ensures and enables effective execution, and this is perhaps its greatest strength.
Resource Capacity Planning is Painless with ResourceFirst
Understanding resource capacity by operational unit, skill area, and cost center is often a complex endeavor, especially when attempted via spreadsheets. Fortunately, PDWare’s ResourceFirst allows for easy entry of resource data, such as skill, proficiency, organizational unit, cost center, and more. This enables dashboards and reports that can tell you at a glance what your capacity is at any level of the organization: by skill, cost center, or individual resource. You can also see your resource utilization and allocation against that capacity, and easily spot when you’re planning over your capacity threshold.