Key Questions on Capacity Planning

Distributing resources efficiently with capacity planning

Capacity planning plays an important role in project management. Service companies need to take into account a wide variety of types of capacity: budget, time, materials, person-days, etc.

The overarching goal is to distribute available resources across your projects as efficiently as possible. Ideally, two conditions should be met:

• All restrictions (e.g. regarding time and budget) are adhered to.
• Resources are deployed according to the economic principle, i.e. achieving the greatest possible output with the least possible input.

By nature, the outlined ideal scenario can usually only be approximately achieved, as not all capacities are fully known or in sufficient detail before the project starts. Uncertainties or changes that require a flexible response often arise during the project as well.

Nevertheless, a thorough resource planning carried out in advance creates a solid foundation on which you can more easily identify and implement changes. Software such as projectfacts supports you in this.

Types of capacity planning

There are two types of capacity planning:

Strategic or long-term capacity planning

In strategic capacity planning, available resources are to be managed in the long term so that future projects can be covered as optimally as possible. This means, for example, hiring new employees or providing further training for the team in areas that are not yet available or sufficiently developed within the company.

Operational or short-term capacity planning

Operational capacity planning deals with the short-term allocation of existing resources to the individual project teams. This involves both scheduling employees on projects and the flexible reallocation of resources when the situation requires it.

Both types of capacity planning are important for project success. In simplified terms:

• Strategic capacity planning ensures that all required resources will be available in sufficient quantities in the future.
• Operational capacity planning ensures that already available resources are distributed across your projects as optimally as possible.

Opportunities and risks of capacity planning

Capacity planning creates the foundation for being able to view and control the utilisation of your resources. As long as companies work without capacity planning, project or business management has little opportunity to do so.

Poor or missing capacity planning carries a number of risks:

• The project cannot be completed on time because important resources are lacking.
• The budget is exceeded because resources have to be sourced externally.
• Orders cannot be accepted or are delayed.
• Changed circumstances in projects pose major challenges for internal coordination.

Insufficient capacity planning can be compensated up to a certain degree; beyond that, however, it harms companies in a lasting way. Companies that manage capacities professionally benefit from a number of advantages.

Flexible resource planning

You can carry out resource planning at different levels, e.g. per day, per week or per month. You can quickly identify resource bottlenecks and take corrective action in time. Even when resources fail, you can find a replacement without difficulty.

Setting time budgets

With capacity blocks, you can specify which time budget should be available for which task. With integrated time recording, you can then track whether the available capacity was sufficient for the task or not. In this way, you systematically get to the bottom of delays and estimate future effort even more precisely.

Optimising workloads

Only with capacities can companies monitor and optimise the workload of their resources. This ensures that the workload of your employees remains within an acceptable range. You can also more easily compensate for absences due to illness or holiday.

Capacity planning with projectfacts

As a comprehensive project management tool, projectfacts offers you everything you need to fully plan capacities for your projects. This includes in particular the following options:

• Take all restrictions into account: deadlines, budget limits, limited person-days, etc.
• Schedule team members e.g. by department, skills or customer
• Comprehensive permissions system for scheduling
• Target/actual comparison e.g. through time recording and contribution margin analysis
• Flexibly reallocate resources when needed

The last two points in particular offer you considerable advantages when managing capacities. By having your employees record project times and book them to work packages, you can compare planned and booked times (target/actual comparison) and use them for the calculation of contribution margins.

You can also keep track of the hour quotas of your employees in this way. With the help of capacity analysis, you can identify workloads during the project and reallocate work packages if necessary. This allows you to use hour quotas in your team as effectively as possible.

projectfacts offers you a great deal of creative freedom for capacity planning. To make the best use of this, it is important to clarify your wishes and expectations before the specific planning begins.

To this end, we present you with a series of key questions with which you can set up capacity planning entirely according to your needs. The guiding questions make subsequent planning easier and protect you from unpleasant surprises during the project.

There are two areas in particular where you have different degrees of creative latitude: the level of detail in planning and the distribution of permissions. What is great about projectfacts is that you don’t have to commit to a single approach across the entire project or even system-wide. You can also flexibly combine different approaches.

How detailed should the planning be?

Should capacities be planned to the exact day or is a monthly value sufficient?

In both cases, the workload of employees is visible. Daily and monthly values each have their own advantages in terms of presentation. You are free to choose which method better suits your processes. Of course, this is not an “either-or question”. Both types of planning can also be easily combined.

Should capacities be planned to the exact day or is a monthly value sufficient?

In both cases, the workload of employees is visible. Daily and monthly values each have their own advantages in terms of presentation. You are free to choose which method better suits your processes. Of course, this is not an “either-or question”. Both types of planning can also be easily combined.

At which project level should capacities be created? Main project, sub-project or work package?

You can choose whether to link capacities to projects. If you do, you have the advantage that projectfacts offers more evaluation options within the capacities. For example, the system can compare planned times against the project times actually booked. This allows you to track whether the plan is being adhered to.

Which project level you link the capacities to is up to you. All approaches have their advantages. Work packages enable more targeted planning, but require more capacities overall. Main projects reduce the number of capacities required, but only allow for less specific planning. Here, too, a combination of all methods is of course possible.

How should capacity permissions be structured?

Who creates capacities?

Which person/group in your company is responsible for creating capacities? Who decides from which project a capacity is created, or which budgets and team assignments apply within a capacity.

Who creates deployment plans?

Who defines the deployment plans within a created capacity? Is this done by the project manager, for example, or are employees allowed to decide for themselves what their plan should look like?

Who edits deployment plans?

Who can modify a deployment plan once it has been created? Does only the project manager have the authority to do so, or can employees also change their scheduling?

Who can see capacities?

Who can access the information in the capacities? Who receives the overview of all employees and their workload? Do employees only see their own workload, or can they also access the deployment plan of colleagues, e.g. from the same team?