How to Remain Competitive with Effective Resource Management and Capacity Planning
I transitioned recently to a Resource Coordinator role in Professional Services. For the last several years, I have been focused on allocating consulting and development resources in the Customer Service department to break/fix tickets (break/fix issues are generally urgent requests) for our clients’ ERP systems. Rather than dealing with issues our consultants and developers could typically resolve in a few hours, I now manage scheduling resources for services that could last for weeks or months, i.e., projects.
I thought the process would be the same, but there are differences between break/fix and project consulting and development that made that impossible:
- My accountabilities had grown to allocate resources from a bank of 40+ consultants and developers. The tricky part is that these consultants and developers all have varying skill levels and availability.
- Engagement with various project managers and business analysts was thrown into the mix.
- Resources would not necessarily be working on immediate customer problems; they might be needed for a future project.
- New requests range from simple tasks to complex implementations.
I decided a little education to broaden my knowledge and expand my skills wouldn’t hurt. That’s when my team lead introduced me to Resource Management and Capacity Planning (RMCP).
The origins of RMCP
Resource Management originated many years ago when the lords and ladies of the ruling classes either arranged work or had jobs and tasks arranged for those serving them.
Human Resources Management really began to evolve during the Industrial Revolution in the 18th century—when big factories needed large volumes of workers. Those workers toiled for up to sixteen hours per day. Over time, the facility owners grew to understand that happy workers were more productive and implemented programs for employee satisfaction.
In my search for RMCP material, I came across RMI Resource Management Institute, whose mission is “… dedicated to the advancement of resource and workforce management through leadership, best practices and standards, globally recognized credentials that certify resource management expertise, and tools and resources necessary for effective and efficient management of human capital-intensive businesses.” They put today’s RMCP into the proper perspective.
In today’s uncertain economic times, where talent is hard to find, the market is volatile, and demand is seasonal, companies must find ways to tighten up and improve performance to achieve their organizational goals.
Today’s RMCP is designed to help professional services and other companies that provide services successfully manage projects, required resources, demand, and supply. RMCP is a powerful weapon in a growing discipline; BusinessWire.com notes the global professional services market is expected to reach $7063.87 billion in 2025, with a Compound Annual Growth Rate (CAGR) of 7%.
Why RMCP is necessary
In companies that produce products, demand is equivalent to the purchase of goods or the desired quantity. Supply is the finished product that will satisfy the demand. In a project-based, professional services environment, demand is equivalent to the sale of services, and supply aligns with the resources required to fulfill that demand as well as their availability or capacity.
If supply and demand are well managed and balanced, everything runs smoothly. If the balance is thrown off, however, there can be some significant consequences:
The goal of Sales is to make sales—to bring in new business. But will the customer’s requirements for a certain date or demand cause whiplash to your supply line? Will it force other functions down the line to crunch existing projects or redistribute resources to make room for new ones? Will resources (developers, consultants, project managers, business analysts, etc.) be available for the required timeline? Will the required skillsets be available in-house? Without RMCP, a big sale could spell disaster.
Project managers navigate their work independently. Some of the top-listed causes of late projects are unrealistic deadlines, client availability, resource availability, unpredictable events, changing priorities, poor estimates, and scope creep. Again, without RMCP, problems abound.
How RMCP should work
Per Resource Management gurus, no one person is—or should be—an island. They favor a team-based approach to managing demand and supply. A regular meeting to review projects is recommended to obtain buy-in and agreement with all stakeholders who hold critical roles—Sales, Project Managers, Resource Coordinators, Business Analysts—any role that contributes to the success of completing a project on time and within budget.
Elements to be examined include demand and need dates, project timelines, and identifying required resources, resource availability, resource scheduling, and resource forecasting. As an example, Sales and PM issues like those listed above could be brought to the table and addressed before they become problems.
Team meetings should be held with a sense of collaboration to bring visibility to existing and future work; contingency plans can be prepared if needed. Transparency into key data helps everyone accurately plan how, when, and by whom the work will be done. The creation of approval workflows is encouraged to support agreements made in the meeting. These signoffs build team accountability for the success of the project.
Capacity planning is the method used to determine an organization’s ability to meet future demand. The current capacity or availability of your resources must be measured to ensure the business has the resources necessary to meet that future demand. Elements include demand forecasting, resource capacity and skill set analysis, hiring additional staff, and identifying and mitigating risk.
RMCP: A key component in project and business success
Effective resource management and capacity planning are critical for companies to remain competitive and adapt to an ever-changing business environment. Communication and collaboration are vital to the success of a project. Creating and using a structured pre-planning process will ensure efficient utilization and optimization of resources, help control costs, and help organizations meet the current and future demands of their project portfolios.
In my next RMCP discussion, I’ll delve further into RMCP and discuss the optimization of resources, the need for a skills repository, the use of software, and reporting.