The Holygrail of Resource Planning in Project Management

The Holygrail of Resource Planning in Project Management

May 18, 2023
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“How many and what 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 correct answers, we need resource planning in project management.

Without implementing the proper process and technique, making 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. Effective resource planning involves forecasting future demand, assessing current resources, and developing strategies to optimize resource utilization and allocation.

Resource planning is the process of identifying and assessing available resources, forecasting future demand, and optimizing resource allocation to ensure that resources are utilized efficiently across the organization.

On the other hand, project resource planning is the process of identifying, organizing, and scheduling detailed tasks to complete a project successfully. While formulating a project plan, several parameters like delivery, budget, duration, tasks, project 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. Nevertheless, it should be a regular activity throughout the life cycle as the resource requirements fluctuate due to continually changing project demands.

Once you know what resource planning is, let’s understand its importance in project management.

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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 must manage their time between multiple projects, including their capacities, priorities, and skillset. A project resource plan plays a vital role in this project management process.

Here is how planning resources in project management can benefit organizations:

A. Reduce project resource costs significantly

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

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

B. 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 improve employee satisfaction.

C. 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 are instead uniformly distributed across all projects.

D. Foresee and plan pipeline project resource requirements

The resource planning process and forecasting help plan pipeline project workforce requirements. Capacity planning identifies the gap, and proactive measures are applied to bridge the difference. t helps reduce last-minute hiring activities, which can lead to cost escalation and compromise quality.

E. Ensure successful delivery using project resource planning

Planning resources properly ensures that all project resourcing requirements are identified and fulfilled. It is also revisited throughout the project life cycle as resource demand fluctuates occasionally. Moreover, it helps maintain 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.”

This is how to manage a project effectively with resource planning. Let’s look into some of the critical components of resource planning.

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3. Essential components of resource planning template

A robust resource planning software will enable managers to effectively manage resources, mitigate risks, and drive projects to success. Here are some salient features of resource planning techniques and tools that aid project management.

A. 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 lets you view and track allocations across multiple dimensions such as team, department, location, etc.

B. Project pipeline planning

Planning and forecasting resource demand for potential projects in the sales pipeline is essential to avoid last-minute scuffles 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.

C. Resource utilization forecasting

Forecasting techniques enable firms to optimize billable and strategic utilization. It allows mobilizing 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.

D. Resource capacity planning

Capacity planning analyzes the enterprise’s gap between resource capacity and project demand. 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

E. Bench management

Resource planner allows early foresight of the workforce that will land 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.

F. 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.

G. 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.

These are the essential components in a typical resource planning template, which can help effectively plan your workforce. Below are some of the common mistakes of resource planning in project management.

4. Common mistakes of resource planning in project management

The project resource cost can blow out of proportion, and project delivery is significantly impacted without a proper resourcing strategy. This section describes some of the common mistakes made in this area.

A. Using silos of spreadsheets for resource planning

Despite its limitations, many organizations still use spreadsheets to plan their resources because they are easily accessible. While this software comes at a cost, it offers significant benefits over spreadsheets. Excel resource planner causes improper allocation, double booking, and creates additional work. t is very limiting and a nightmare to maintain.

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

B. 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 suitable projects at the right time. Restricted visibility also hinders identifying and leveraging quality resources from low-cost locations.

C. Lack of resource forecasting for pipeline projects

Resource planning for future projects is often taken up at the eleventh hour. The resource managers make the mistake of only taking up the planning activities when the deal is signed. Ideally, it should start after the opportunity reaches a certain probability of closure so 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.

Resource forecasting for project managers

D. 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. However, if a niche resource is hired for a shorter duration, it becomes challenging to redeploy him after the assignment is complete. Therefore, a resource plan should maintain a judicious blend of permanent and contingent resources. For short-term assignments, a contingent workforce will be less expensive than hiring full-time resources.

E. 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 delays. On the other hand, over-skilled resources spike project costs. Not assigning tasks per skills and interests leads to decreased employee engagement and loss of productivity.

F. 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 skill sets. So, analyzing project demands with matching skill sets are prerequisite for informed hiring decisions.

A guide to Project Management

Knowing the common mistakes of project resource planning, let’s understand the responsibilities of resource and project managers.

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 organizational level and oversee allocating resources to several projects.

The Project Manager initiates the resource request for an open position within his project, and the resource manager’s job 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 they need to ensure that the resource carries out the delivery responsibilities.

A. Role of resource manager

In summary, a resource manager is responsible for the following:

  • Planning and allocation based on resource skills, previous experience, and availability.
  • Conducts capacity planning to address issues of shortfall and excesses of resources.
  • Support project managers with the project resource management plan and related activities.
  • Address resource concerns by reallocating resources, negotiating, or assigning additional staff.
  • Collate new project requirements from the business and provide them 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 senior management.

B. 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 the 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.

Guide to project resource management

These are some of the significant responsibilities of resource and project managers. Below listed are ways to plan resources within different project management methodologies.

6. Resource planning within different project management methodologies

A methodology is a set of guidelines and processes for managing a project. A project manager chooses a procedure depending on their team, project type, and scope. Here we discuss some commonly used project management methodologies and their suitable resource planning techniques.

A. Agile

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

B. Scrum

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 skills.


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 PMBOK resource management needs to be carried out based on the specific project situation.

D. Prince2

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

E. Waterfall

In this case, the projects are thoroughly 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 project’s initiation phase. Accordingly, resources are allocated before the stage starts.

F. Kanban

Kanban focuses on early releases with collaborative and self-managing teams. It uses a visual workflow tool to detect 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.

G. Lean

Lean methodology maximizes customer value while minimizing waste. It promotes the concept of delivering more with fewer resources. Resource plan helps streamline 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 into a project.

H. Six-Sigma

This methodology improves quality by reducing the number of errors through proper analysis and removing it from the process. The 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

This is how resource planning techniques can be applied to project management methods. Now, let’s understand operational and strategic resource planning in project management.

7. Operational and strategic resource planning in project management

A. What is operational and strategic resource planning?

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

It can change drastically based on individual priorities. Let’s take an IT project resource planning example. If an IT firm is planning on outsourcing a temporary requirement, i.e.., The resourcing strategy will shift from FTE to contingent staff for IT infrastructure improvements. 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 on the short-term objectives and then determine how to achieve them.

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.

B. Factors that can influence operational and strategic resource planning

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

  • Staffing

It defines an organization’s hiring policy for full-time resources and directly influences decisions made on a resource plan. It also covers compensation and benefits, an essential 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, many businesses outsource certain functions to other organizations. 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. Therefore, project costs can be minimized using generic resources from a low-cost area. In addition, 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. Therefore, 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

The essential function of resource leveling is to optimize workforce allocation by adjusting the project schedule to resolve conflicts caused by resources’ over-allocation. On the other hand, resource smoothing optimizes distribution by adding new resources without affecting the critical path and timeline. Both of these techniques influence decisions toward a resource plan.

C. How to address market volatility using operational and strategic resource planning

Effective resource planning is a critical success factor for an organization’s growth and sustainability. Unfortunately, the outbreak of the COVID-19 virus upset the world’s business model at the beginning of 2020.

Many organizations try to stay afloat in these volatile market conditions with a shrinking budget. Acute cost pressure and skill shortages have also become routine activities. Following strategies can help an organization sustain its profitability while planning for project 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 our 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

This is how operational and strategic resource plan helps firms achieve their business goals. Listed below are some of the critical trends of resource planning in project management.

8. Emerging trends of resource planning in project management

Over the years, the project management landscape has undergone several changes due to technological advancements, management paradigms, etc. Therefore, to keep pace with these changes, organizations must embrace newer ways to manage projects successfully. Listed below are some of the emerging trends of resource planning in project management:

A. Replace silos of spreadsheets with an enterprise resource plan

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

B. Taking resource scheduling to the next level

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

C. Resource capacity planning for business efficiency

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

D. Resource forecasting to maximize effective utilization

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

E. 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, and analytics. It also integrates effortlessly with multiple business applications to maintain a single source of truth across the enterprise.

F. 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.

These are some of the evolving trends of resource planning in project management.

A resource scheduling guide

9. Conclusion

Resources being a critical and costly investment, organizations must implement effective resource planning and utilize the workforce to their maximum potential. When resources are planned efficiently, it helps a business to manage risks, reduce delays, optimize resource utilization, etc. In addition, it helps deliver projects successfully within the stipulated time and budget. This exhaustive guide explains all the essential things about resource planning n project management. Furthermore, implementing robust resource management software will help organizations to achieve their business objectives and improve their profitability.

10. Glossary


11. 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 that is customizable as per business requirements.t is customizable as per business requirements.

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