If you are a software development or professional services organisation, getting your resource levels and skills mix right is pretty key. Resources are probably the biggest cost to your business and also the biggest revenue generators. The method to do this is called capacity planning or resource forecasting.
If you are after an example of how to do this in Excel then scroll down this post. To perform effective capacity planning we should first go back to basics and get some terms straight.
Resource. A person in your organisation – pretty obvious this one. Note in this post we are talking about resources who are “people” and not rooms, pieces of kit etc.
Demand. The amount of work allocated to your resources. This can be “committed” work or “requested” work.
Role. When doing capacity planning it helps to align your resources into groups or roles. For example “developer” and “project manager”.
Generic resource. Often when doing capacity planning you need to record demand (work) but don’t have an actual person to record this against. So a generic resource can be used. A generic resource is essentially a placeholder for a real person – you just don’t know who they are yet.
Capacity. Simply the amount of work your resources can supply to the organisation. This should be normal working days less time off.
Projects. These are the “things” your resources are working on. So demand is actually recorded against a resource and project. Projects can be in various “states” for example “active” (committed projects you are doing) or “pipeline” (projects you may do).
Now we have the terms straight, how do we go about capacity planning? In the following example I am going to illustrate this using days and months. But obviously do whatever works for you.
(1) Work out how many resources you have and the capacity of each resource per month (i.e. how many days work they can do based on normal working days less time off).
(2) For each project, record how many days of work is required by each resource by month – this is the demand.
(3) You will have some work that cannot be allocated to an actual person. Perhaps it is someone you need to recruit or you just haven’t decided who will be allocated the work. So you allocate this to your generic resources.
(4) Given the above you now have a figure for the total demand on your resources and the total capacity. The difference between the two is your oversupply of resource (people spare) or undersupply of resources (insufficient people).
Pretty easy hey? Many organisations attempt to do this in a spreadsheet. Which is fine if you have around ten resources and a handful of projects. But if that is the extent of your work planning you could do this on a whiteboard.
Here is an example of how you would attempt to lay this out in a spreadsheet capacity-planning (click to open up capacity planning example in .xls format).
However, why not take a look at our resource planning and resource forecasting software – iPlanWare PPM. It has tools built in to streamline the whole process and free you from spreadsheet hell. There are also videos available here so you can see how it works.