7.3 Early-Stage Resource Planning

A crucial part of setting up a successful project portfolio is ensuring you have the capacity—both in terms of personnel and budget—to deliver on your commitments. Early-stage resource planning establishes the foundation for matching project needs with the right capabilities and availability. Without this groundwork, even the most carefully chosen projects can falter if teams are over-allocated or required funding is overlooked. This section examines the fundamentals of resource planning, with a focus on capacity management at the portfolio level.

7.3.1 The Importance of Capacity Management

1. Balancing Demand and Supply
   • At its core, capacity management is about making sure that the demand for project work (tasks, deliverables) does not exceed the supply of skills, time, and budget available.
   • When demand continuously outpaces supply, projects risk delays, cost overruns, and compromised quality.
2. Preventing Resource Overloads
   • Over-allocating key team members leads to burnout, decreased morale, and lower overall performance.
   • Under-allocating resources can also be a problem—idle time might represent a missed opportunity to progress critical strategic or innovation initiatives.
3. Visibility for Decision-Makers
   • Executives and PMOs rely on capacity planning data to make informed decisions about which projects to start, delay, or terminate.
   • Having clear insight into resource constraints enables a proactive approach to potential conflicts or bottlenecks before they jeopardize project timelines.

7.3.2 Foundations of Capacity Planning

1. Inventory of Skills and Roles
   • Skills Assessment: Identify all relevant competencies within the organization—whether technical (e.g., cloud architecture, cybersecurity) or managerial (e.g., project leads, business analysts).
   • Roles Definition: Clarify primary responsibilities. This might include dedicated project managers, subject matter experts, developers, testers, and system administrators.
2. Identifying Resource Constraints
   • Critical Bottlenecks: Some specialties (e.g., data science, enterprise architecture) may be in limited supply, making them gating factors for project schedules.
   • Geographic or Time-Zone Restrictions: If you have globally distributed teams, ensure that handoffs or collaboration requirements are factored into planning.
   • Availability Windows: Recognize seasonal or cyclical demands. For instance, a financial institution may limit IT work during peak times like quarter-end or year-end.
3. Estimating Demand
   • Project Requirements: Break down proposed initiatives by major workstreams, identifying estimated hours or full-time equivalents (FTEs) required.
   • Predicting Future Work: Incorporate new project proposals, known technology upgrades, and maintenance activities in medium- to long-term capacity planning.
   • Agile and Iterative Methods: In Agile environments, use velocity or story points to forecast the team’s capacity for future sprints.

7.3.3 Aligning with Organizational Structures

1. Centralized vs. Decentralized Resource Pools
   • Centralized Model: A Project Management Office (PMO) or Resource Management Office (RMO) manages a shared pool of resources, assigning them across the portfolio.
   • Decentralized Model: Individual departments or teams own resources, and project managers negotiate availability with each department head.
2. Role of the PMO or EPMO
   • Facilitates collaboration among different departments and business units.
   • Maintains an overarching view of resource utilization and ensures consistency in planning and reporting.
   • Helps set policies for how resources are requested, allocated, and tracked across the portfolio.
3. Functional, Matrix, or Projectized Organizations
   • Functional: Resources typically report to functional managers (e.g., IT, finance, operations). Project work is secondary.
   • Matrix: A blend of functional and project oversight, where resources can be shared across multiple initiatives.
   • Projectized: Project managers have direct authority over resources and staff are organized primarily by project.

7.3.4 Basic Methods and Tools for Capacity Planning

1. Spreadsheets and Simple Tools
   • Many organizations start with common office software (e.g., Excel, Google Sheets) to track resource availability, project assignments, and time estimates.
   • Pros: Low-cost, straightforward.
   • Cons: Can become cumbersome and prone to version-control issues as the portfolio scales.
2. Dedicated Resource Management Modules in PPM Tools
   • Integrated PPM solutions (e.g., Microsoft Project Online, Planview, ServiceNow) often include resource management features that automate capacity tracking and reporting.
   • Pros: Real-time visibility, consolidated dashboards, integration with project schedules.
   • Cons: Requires initial investment in licensing, training, and tool adoption.
3. Capacity Forecasting Models
   • Rolling Wave Forecasting: Frequently revisits resource needs in short intervals (e.g., monthly, quarterly) based on project progress.
   • Scenario Analysis: Tests best-case, worst-case, and most likely resource demand to explore possible staffing shortfalls or surpluses.
   • Backlog/Queue Management: Particularly relevant in Agile contexts, where teams pull work from a backlog according to capacity each sprint.

7.3.5 Common Challenges and How to Address Them

1. Shifting Priorities
   • Problem: New high-priority initiatives or urgent compliance needs can disrupt existing plans.
   • Solution: Maintain a flexible resource plan, incorporating contingency buffers and prioritization criteria that allow quick reallocation of resources.
2. Cultural Resistance
   • Problem: Teams may resist centralized resource visibility and tracking, perceiving it as micromanagement.
   • Solution: Communicate the benefits of transparent capacity planning—reduced burnout, more predictable workloads, and better strategic alignment.
3. Lack of Accurate Estimates
   • Problem: Projects often underestimate effort, leading to over-allocation and missed deadlines.
   • Solution: Use historical data, time-tracking reports, or Agile velocity metrics to refine estimation processes. Include buffer time for learning curves or unexpected complexities.
4. Multiple Demands on Specialized Skills
   • Problem: Limited experts can become bottlenecks, toggling between multiple projects and delaying progress.
   • Solution: Build redundancy through cross-training, external hiring, or partnering with vendors. Consider scheduling projects to sequentially utilize these critical resources.

7.3.6 Step-by-Step: A Starter Approach to Early-Stage Resource Planning

1. Consolidate Project Pipeline
   • Compile a single list of all active and proposed projects, noting rough timelines and estimated workloads.
2. Define Capacity Baselines
   • Establish a simple model for how much time each resource category (e.g., developers, analysts) has available weekly or monthly.
   • Adjust for holidays, vacation schedules, and training commitments.
3. Map Skills to Project Needs
   • Align resource skill sets with project tasks. Highlight critical specialists (e.g., architecture, security) who may be in high demand across the portfolio.
4. Identify Constraints and Bottlenecks
   • Look for recurring patterns where resource demand exceeds supply.
   • Work with project sponsors or a steering committee to prioritize or delay initiatives to remove conflicts.
5. Regularly Review and Update
   • Schedule periodic check-ins (e.g., monthly or quarterly) to update project statuses and resource forecasts.
   • Adjust the plan as new initiatives enter the pipeline or existing ones change in scope.

7.3.7 Key Takeaways

• Resource Constraints Are Real and Impactful: Even the best strategy can fail if key contributors are overstretched or funding is insufficient.
• Visibility and Communication: Early planning and consistent updates help leaders see emerging issues, enabling proactive corrections rather than reactive firefighting.
• Iterative and Flexible: Early-stage resource planning should be treated as a living process that adapts to evolving project scopes, organizational changes, and market shifts.
• Foundational to Successful PPM: By establishing a structured approach to capacity management, organizations set the stage for balanced portfolios that deliver both short-term results and long-term value.

In the following sections, we will delve deeper into how resource planning ties into overall investment management, risk mitigation, and governance. With early-stage capacity management in place, you’ll be better equipped to build a resilient project portfolio that can adapt to changing priorities without sacrificing delivery quality.