The Holygrail of Resource Planning in Project Management

November 10, 2020

“How many and what kind of resources do I need for the coming weeks, months, quarters, or years”? “Should I hire more people to meet future demands or leverage sales efforts to keep everyone occupied with work”? “How can I avoid billing loss and control project costs before it’s too late?”

These are the pertinent questions that stakeholders ask themselves on an everyday basis. To get the right answers, we need resource planning in project management.

Without implementing the right process and technique, taking any decision will be like throwing darts in the air.

Resource planning can address these challenges in today’s dynamic business conditions. It helps plan resources intelligently from the ground up and continuously optimize your workforce. This guide is curated for enterprises to gain a detailed understanding of resource planning in project management.

Let us define resource planning in project management:

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1. What is Resource Planning in Project Management?

Resource planning in project management is the process of identifying and allocating the best-fit resources to the projects. It also ensures the effective and efficient utilization of the resources across the business.

On the other hand, project planning is the process of identifying, organizing, and scheduling detailed tasks for completing a project successfully. While formulating a project plan, several parameters like delivery, budget, duration, tasks, resources, milestones and stakeholder reviews are considered.

Resource and Project planning are two sides of the same coin. Its synchronization is the key that determines a project’s success or failure. Resource planning in project management is usually carried out during the initiation phase. But the intensity or rigor slows down once the initial fulfillment goal is achieved in most cases. It should be a regular activity throughout the life cycle as the resource requirement fluctuates due to continually changing project demands.

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2. Importance of Resource Planning in Project Management

Achieving project goals within the given constraints is one of the significant challenges of project management. Project managers are expected to manage their time between multiple projects, including their capacities, priorities, and skillset. A resource plan plays an important role in this project management process.

Here are five different ways by which resource planning can help in project management:

Reduce Project Resource Costs significantly

Allocating the right resource to the right project ensures the timely delivery of the project within the budget. Planning for resources eliminates the deployment of over and under-skilled resources on project tasks. If resources are under-qualified, a delay in project timelines is inevitable, and if overqualified, can spike project costs.

According to Deloitte Global Cost survey 2020: “Reducing project resource cost takes precedence over other business initiatives”

Reduce Resource Cost with Resource Management

Forecast and Improve Profitable Resource Utilization

Resource planning and forecasting provide foresight into utilization within a project. A structured resource plan includes mobilizing resources from non-billable to strategic/billable projects for increased revenue. It also prevents under or overutilization of resources and helps in improving employee satisfaction.

Facilitate Efficient Resource Planning and allocation

Resource planning in project management identifies and assigns resources to project tasks based on skills, availability, cost, and other selection criteria. It also helps to allocate global resources from low-cost locations and control project costs. Strategic resources are not assigned to only high priority projects and instead uniformly distributed across all projects.

Foresee and Plan Pipeline Project Resource Requirements

Resource planning and forecasting pipeline estimate project resource requirements in advance. Capacity planning identifies the gap, and proactive measures are applied to bridge the difference. It helps reduce last-minute hiring activities, which can lead to cost escalation and compromise the quality.

Ensure Successful Delivery using Project Resource Planning

Proper planning ensures that all project resource requirements are identified and fulfilled. It is also revisited throughout the project life cycle as resource demand fluctuates from time to time. It also maintains continuity by preventing resource movements within projects unless it comes under strategic decision. These steps allow the timely delivery of projects within a specified budget.

PwC Project Management Insights states that “30% of Projects fail due to a lack of Resources”

guide to resource capacity planning

3. Essential Components of Resource Planning Template

We describe some of the salient features of resource planning techniques and tools that aid in the project management process.

Multi-dimensional Resource Planner

Resource planner allows you to allocate appropriate resources in real-time to the projects across the organization. It helps to decide the best-available-best- fit instead of the first-visible-first-fit resource. It also helps you also in viewing and tracking allocations across multiple dimensions such as team, department, location, and more.

Project Pipeline Planning

Planning and forecasting resource demand for potential projects in the sales pipeline is essential to avoid last-minute scuffle for competencies. Resource planner allows resourcing treatments such as training or hiring in advance and out rotation/backfill strategy for niche resources. It also lets you avoid wasteful hiring/firing cycles to ensure projects are successfully delivered.

Resource Utilization Forecasting

Forecasting techniques enable you to optimize billable and strategic utilization. It allows you to mobilize resources from non-billable to billable or strategic work. Resource planner helps to control project financials by comparing forecasted with actual utilization. It also detects and proactively mitigates under and over resource utilization.

Resource Capacity Planning

Capacity planning analyzes the gap between resource capacity and project demand across the enterprise. It helps identify short and long-term excess or shortfalls and looks into multiple channels to effectively bridge the gap. Resource capacity planning facilitates proactive strategies such as adjusting project timelines, re-training employees or hiring a contingent workforce.

Guide to Resource Capacity Planning

Bench Management

Resource planner allows early foresight of resources that will land up on the bench to allocate them to suitable project vacancies. Bench management provides additional training or shadowing opportunities for the selected employees. So that they can be made billable using the current opportunities.

Reporting using Real-time Business Intelligence

Real-time business intelligence includes configurable dashboards and custom reports to fast-track decision-making in a rapidly changing business environment. Resource planning uses a combination of security rights, portal designs, and filters, allowing an end-user to view relevant information. Different stakeholders can get a granular view with a slice/dice of data.

What-if Analysis for Resource Simulation

What-if analysis within a resource planner allows you to build and simulate different scenarios in a multi-project environment. It helps arrive at the best possible outcome within project constraints, such as impeding an existing project or extending its timeline. It also considers resource-related parameters before shuffling them between projects. After deriving the best scenario, it is applied to the actual project schedule.

4. Common mistakes of Resource Planning in Project Management

The project resource cost can blow out of proportion, and project delivery is significantly impacted in the absence of a proper resourcing strategy. In this section, we describe some of the common mistakes made in this area.

Using Silos of Spreadsheets for Resource Planning

Despite its limitations, many organizations are still using spreadsheets for planning their resources because it is easily accessible. While this software comes at a cost, it offers significant benefits over spreadsheets. It causes improper allocation, double booking, and creates additional work. It is very limiting and a nightmare to maintain.

Marketwatch points that “88% of spreadsheets are prone to errors”

Planning Resources without Overall Visibility

Many managers continue to allocate resources without having complete visibility of their skills, competencies, and existing bookings. As a result, it becomes difficult to allocate the right resource to the right projects at the right time. Restricted visibility also hinders identifying and leveraging quality resources from low-cost locations.

Lack of Resource Forecasting for Pipeline Projects

Often, resource planning for future projects is taken up at the eleventh hour. The resource managers make the mistake of taking up the planning activities only when the deal is signed. Ideally, it should start after the opportunity reaches a certain probability of closure so that there is sufficient lead time to address resource requirements. This results in last-minute activities that create an unbalanced pool as the quality of the resources are compromised.

Importance of resource forecasting for project managers

Not Maintaining the Right Mix of Permanent and Contingent Workforce

Businesses try to fulfill project requirements using full-time employees as it is perceived to be a more cost-effective solution. If a niche resource is hired for a shorter duration, it becomes difficult to redeploy him after the assignment is complete. A resource plan should maintain a judicious blend of permanent and contingent resources. For short term assignments, a contingent workforce will be less expensive compared to hiring full-time resources.

Allocating Under or Over skilled Resources to the Projects

One of the common mistakes of resource planning in project management is assigning under or overqualified resources to tasks. When resources are under-skilled for the job, it causes project delay. On the other hand, over skilled resources spikes project costs. Not assigning tasks as per skills and interests leads to decreased employee engagement and loss of productivity.

Unplanned Hiring without Analyzing Project Demands

Resource managers often resort to last-minute hiring activities to fulfill project resource requirements. This unplanned hiring compromises quality and leads to a large bench of mismatched skillset. So, analyzing project demands with matching skill sets are prerequisites for informed hiring decisions.

Importance of project resource management and ways to master it

5. Responsibilities of Project Managers and Resource Managers

Project Managers operate on a project-level with projects of different sizes and complexities. A Project manager can manage single or multiple projects and ensures they are completed within a stipulated time and budget. However, Resource Managers operate at the organization level, and they oversee the allocation of resources to several projects.

The Project Manager initiates the resource request for an open position within his project, and the job of the resource manager is to fulfill the same. Once a resource is allocated to a project for a particular period, the resource manager’s responsibility ends. However, the Project Manager’s job only begins, as he/she needs to ensure that the resource carries out the delivery responsibilities.

Role of Resource Manager

In summary, a resource manager is responsible for:

  • Planning and allocation based on resource’s skills, previous experience, and availability.
  • Capacity planning to address issues of short fall and excesses of resources
  • Support project managers with the resource management plan and related activities
  • Address resource concerns by reallocating resources, negotiations, or assigning additional staff.
  • Collate new project requirements from the business and provide it to the hiring team
  • Certain limited HR-related functions
  • Collaboration with other departments, e.g. HR, PMO, Sales, Learning & Development
  • Generating reports and analytics for the senior management

Role of a Project Manager

The corresponding roles of a project manager are:

  • Create a project management plan and define the scope and delivery objectives of the project.
  • Capture Resource requirements and request for fulfillment
  • Streamline Communications with stakeholders/ team members and customers
  • Carry out operational reviews as per Project KPIs
  • Estimate Time and cost and Monitor the budget
  • Report progress of the project; analyze any potential risks and provide mitigation strategy
  • Document the project and set the expectation for various team members
  • Work with the empaneled vendors for contingent resources

Importance of project resource management and ways to master it

6. Resource Planning within different Project Management Methodologies

A methodology is essentially a set of guidelines and processes for managing a project. A project manager chooses a methodology depending on its team, project-type, and project-scope. Here we discuss some commonly used project management methodologies and how to plan resources for them.


In this approach, there is no top-heavy requirements-gathering. It is a collaborative process to deliver with small incremental changes iteratively. Since some project requirements can suddenly change, the resource plan needs to address frequent shuffling of resources across different projects.


It enables a small, cross-functional, and self-enabling team to take charge of the delivery. Similar to Agile, the resources need to be flexible and multi-skilled within a small team size. In this dynamic project environment, the resource plan needs to ensure that allocation is not done only based on primary skill.


Project Management Body of Knowledge (PMBOK) defines the processes, best practices, terminologies, and guidelines accepted in the industry. PMBOK addresses different project situations and has documented several best practices with use cases. The resource plan needs to be carried out based on the specific project situation.


Prince2 is a process-oriented methodology that divides projects into multiple stages, each with their plans and processes. The methodology defines inputs and outputs for every stage of a project so that nothing is left to chance. Resource Planning, in this case, focuses on meeting resource requirements for every stage of the project. Accordingly identify the right skills and competencies, certifications for specific stages.


In this case, the projects are fully planned in the beginning and then executed in phases. It is assumed that there will be minimal changes during the execution. So, most of the resource planning activities are done based on the initiation phase of the project. Accordingly, resources are allocated before the phase starts.


Kanban focuses on early releases with collaborative and self-managing teams. It uses a visual workflow tool for the early detection of a bottleneck in the development process. It is suited for projects with a smaller team, which depends on individual members. The resource plan must be able to provide the right resource matching the project requirements. The primary skill or competency is most important in resource selection.


Lean methodology maximizes customer value while minimizing waste. It promotes the concept of delivering more with fewer resources. Resource plan helps in streamlining billable and strategic utilization within the project and effectively manages the overall capacity. It ensures that the existing capacity is fully exhausted before new resources are inducted in a project.


This methodology improves quality by reducing the number of errors by proper analysis and removing it from the process. Resource plan needs to provide the subject matter experts in the specific area with certifications such as Six Sigma Black belts. The resources are typically multi-skilled, and the resource selection includes one primary skill and several secondary skills.

Different Project Management Methodologies

7. Operational and Strategic Resource Planning in Project Management

What is Strategic and Operational Resource Planning?

Planning implies thinking in advance, what we need to do to realize the business objectives. Strategic Planning aims to attain long-term goals while operational planning helps achieve the short-term objectives of an organization.

Strategic Planning is a process that is usually undertaken by top-level management to decide the future direction. It is not limited to projects within a particular department or unit, but it covers the entire organization. Strategic resource planning looks into the overall long-term resourcing strategy.

It can change drastically based on individual priorities. For example, if the organization is planning on outsourcing an important function, the resourcing strategy will shift from FTE to contingent staff. Similarly, a niche skilled resource’s out-rotation from an existing project to start a new initiative will come under strategic resource planning.

Operational Planning addresses the day to day activities of a business. It also supports strategic planning to accomplish the overall organizational goals. First, we decide the short-term objectives and then work out how we will achieve it.

Operational Resource planning includes regular business activities and operations as per organizational guidelines. For example, it covers pipeline project management, management of FTE and contingency resources, forecasting billable and total utilization, and more.

Factors that can influence Operational and Strategic Resource Planning

Parameters for strategic and operational resource planning are linked with the mission, vision, strategies, goals, and objectives of an organization. The following can influence strategic and operational resource planning decisions.

It defines an organization’s hiring policy for full-time resources, and it directly influences decisions made on a resource plan. It also covers compensation and benefits, which is an important consideration for regular employees.

Hybrid Delivery
The project team is created using a combination of in-house and vendor resources. The critical positions which require specific domain knowledge are performed by full-time in-house staff. One-time activities such as software development are accomplished using vendor resources.

Outsourcing vs. in-sourcing
Due to globalization’s effect, many businesses are outsourcing certain business functions to another organization. Some organizations also have stricter policies that their confidential data cannot leave the company’s boundary.

Multi-locational Policy
Due to the cost pressure, many projects are now getting executed from different locations. Project costs can be minimized using generic resources from a low-cost location. The high-skilled resources can be located based on their availability, who can take up leadership roles related to delivery.

Training and Development
Full-time resources must learn new skills for their self-development and compete in a dynamically changing environment. It may not always be practical to hire new resources. However, a new skill can be acquired by cross-training an existing employee.

Resource Leveling and Smoothing
Resource leveling optimizes workforce allocation by adjusting the project schedule to resolve conflicts caused by resources’ over-allocation. Resource Smoothing optimizes allocation by adding new resources without affecting the critical path and timeline. Both of these techniques influence decisions towards a resource plan.

How to Address Market Volatility using Operational and Strategic Resource Planning

Effective planning resources is one of the critical success factors for an organization’s growth and sustainability. The outbreak of the COVID-19 virus has upset the business model of the whole world at the beginning of 2020.

Many organizations are trying to stay afloat in these volatile market conditions with a shrinking budget. Acute cost pressure and skill shortages have also become a routine activity. Following strategies can help an organization in sustaining their business profitability while planning for resources.

Short-term Strategy

  • Effective Capacity Planning and identifying the Gaps between Capacity and Demand
  • Address the shortage of resources using a combination of FTE and contingent resources
  • Either re-train existing employees or go for new hires depending on the requirements
  • Identify new projects, adjust the project timelines, and sell services for excess capacity
  • Mobilize employees from non-billable or low priority work to billable or high priority projects as a routine activity.
  • Revisit out rotation/backfill policy for starting new projects with niche skills

Long-term Strategy

  • Decide non-critical functions that can be outsourced
  • Identify at least two to three vendors who can work as strategic partners for outsourcing
  • Decide on a multi-locational policy to take advantage of resources from low-cost location
  • Adapt a hybrid delivery model for cost efficiency

A guide to Project Management

8. Emerging Trends of Resource Planning in Project Management

Replace Silos of Spreadsheets with an Enterprise Resource Plan

Silos of spreadsheets and home-grown tools are inadequate for efficient resource planning, and it adversely impacts business performance. Hence, companies are shifting towards enterprise-level software that centralizes resource-related information and maintains a single source of truth.

Taking Resource Scheduling to the next level

Today, resource scheduling is not just a simple process of allocating resources against the projects. It has evolved into a full-fledged enterprise-level process that ensures maximum efficiency and utilization of resources.

Resource Capacity Planning for Business Efficiency

Resource capacity planning is not a luxury for businesses any more. It has become an essential part of the resource planner. It future proofs your workforce against market volatility by analyzing the demand capacity gap and bridging them proactively.

Resource Forecasting to Maximize Effective Utilization

Billable and strategic utilization of the workforce are crucial indicators of business profitability. Therefore, it has become critical to get a real-time view of future utilization while planning for resources. Resource forecasting helps in taking proactive measures to improve future allocations.

Integrating Resource Management Processes with Other Applications

Traditional resource plans include inefficient and time-consuming processes. Enterprise-level resource planner streamlines them using efficient workflows, alerts, analytics. It also integrates effortlessly with multiple business applications to maintain a single source of truth across the enterprise.

Monitoring and Controlling Project Resource Cost

Enterprise-level resource planner offers various capabilities to monitor and effectively reduce overall project costs. Some of them are forecasting, capacity planning, resource modeling, pipeline management, bench management, etc.

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9. The SAVIOM Solution:

SAVIOM is the market leader in offering the most powerful and configurable solution for managing your enterprise resources effectively and efficiently. With over 20 years of experience, this Australian-based MNC has created its global presence across 50 countries and helped more than 100 customers achieve their business goals. SAVIOM also has products for project portfolio management, professional service automation, and workforce planning software that is customizable as per business requirements.

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