Resource Planning in Multi-Project Management: a Guideline
| Translated by Julian Hammer
Resource planning in multi-project management is one of the greatest challenges modern companies face. Imagine your company is juggling ten projects at the same time, all of which require different resources and have different requirements and deadlines. How to stay on top of things?
Resource planning is the key to efficient coordination and allocation across several projects. It plays a crucial role in managing the time, cost and quality of projects.
But what is resource planning in multi-project management (MPM)?
Resource planning in multi-project management refers to the process by which personnel, material resources and capital are coordinated across several projects and allocated to the individual projects.
Done in the right way, it allows for an optimal utilization of the available resources. To this end, the available capacities are recorded and prioritized in a resource plan. When assigning resources to individual projects, there must be no conflicts, i.e. no overlapping of resources and no unused funds.
Below we will not only provide you with additional information on resource planning in multi-project management and portfolio management. We also show you how a suitable software optimizes your resource management in multi-project management and contributes substantially to the success of your project.
Table of Contents
- What is resource planning in multi-project management?
- Why resource planning challenges are so critical in multi-project management?
- What project management software must be able to do for effective resource planning in MPM?
- How to optimize operational resource management in multi-project environments?
- What are the success factors for effective multi-project management?
- Conclusion on resource planning in multi-project management (MPM)
- FAQs on resource planning in multi-project management
What is resource planning in multi-project management?
While the planning for individual projects is often straightforward, it becomes more complex due to competing priorities and limited resources.
A distinction is made between strategic and operational resource planning. Strategic resource planning deals with a long-term, superordinate resource allocation. For this purpose, the future resource requirements are forecast and it is ensured that the resource availability matches the project and company objectives.
The operational resource planning is focused on the short-term and takes place on project level. It focuses on the current assignment and adjustment of resources, depending on the respective project status and the project requirements.
By taking a differentiated view of the planning levels, companies can implement their projects optimally and align them strategically. Effective project portfolio planning identifies and prioritizes projects by strategic relevance and risk before passing over to operational realization.
Why effective resource planning is important in multi-project management?
The basics of multi-project management include the simultaneous planning, controlling, and monitoring of several projects, whereas efficient resource distribution and prioritization are the decisive factors. However, projects in multi-project management often compete for the same resources as specialists or machines in production.
Multi-project management is therefore not only about ensuring that sufficient resources are available, but also about optimizing their deployment.
What challenges arise without effective resource planning in multi-project management?
When systematic resource planning is lacking, project delays and increased costs are a logical consequence. Projects can block each other if important resources are overloaded or incorrectly allocated. In addition, multitasking and resource conflicts often lead to employees working inefficiently and projects being stalled as a result.
Why are resource planning challenges so critical in multi-project management?
Resource planning in multi-project environments is complex and can be affected by various challenges and problems:
- Unclear planning and resource allocation: The lack of accurate information can lead to projects being either under-supplied or burdened with surplus, negatively impacting schedules and costs. In addition, an unclear allocation of tasks leads to confusion and inefficient use of resources.
- Lack of flexibility and unexpected situations: Rigid resource plans that cannot adapt to changes or unexpected events lead to delays and quality losses.
- Communication gaps: A lack of communication between departments, team members and project managers can lead to misunderstandings, misallocations,and inefficient use of resources.
- Lack of specialists: The lack of specialized skills within the team can slow down critical project phases or result in higher costs if external experts have to be bought in.
- Multitasking and resource conflicts: Efficiency is significantly impaired if resources are allocated to several projects at the same time. Constant switching between projects can lead to reduced concentration and productivity. In addition, resource conflicts arise when the same resources are needed for competing projects.
- Inadequate leadership: Lack of or inadequate leadership can result in employees being unsure of how to prioritize their tasks, making decision-making difficult and increasing stress.
Clearly structured resource management and effective leadership are decisive in order to master these challenges and to maintain employee satisfaction and performance.
Possible impacts of inefficient resource planning
Inefficient resource planning has a significant impact on project schedules and especially on costs:
- Additional hours worked: If resources such as personnel are not planned correctly, employees may have to work overtime or request additional support.
- Missing or surplus materials: If materials are not procured on time, production may be delayed, resulting in additional costs for express deliveries or production downtime.
- Machine and Plant Standstill: If machines and systems are not optimally planned, unexpected downtimes can occur. Possible consequences are an increase in production costs and delayed delivery.
- Quality problems: Poor planning can lead to a loss of quality if projects are under time pressure or work with insufficient resources. This may result in additional costs for repairs or warranty claims.
- Coordination effort: Inefficient planning often requires more coordination and communication between different project stakeholders to close the gaps and reallocate resources. This additional expense leads to higher administrative costs.
What solutions and best practices are there?
In resource planning, especially in multi-project environments, there are several proven solutions and best practices that can help to master typical challenges.
Here is a summary of some key solutions:
- Precise resource estimation and clear requirements:
Implementation of precise estimation methods and detailed requirements analyses. Use of tools to support the estimation of resources.
Best Practice: Use of resource management software that enables accurate estimates and requirements analysis to ensure better planning and allocation of resources. - Effective communication and leadership:
Establishment of clear communication channels and escalation procedures. Training managers and team members in effective communication and conflict resolution.
Best Practice: Use of project management software to centralize communication and make the distribution of tasks transparent. - Flexibility and adaptability:
Implementation of flexible resource plans that can be quickly adapted to changes. Use of scenario analyses to predict and adapt to unexpected situations.
Best Practice: Use of tools that enable dynamic adjustment of resource planning in order to be able to react to unexpected changes. - Optimal resource allocation and prioritization:
Application of prioritization strategies to efficiently allocate resources between competing projects. Use of multi-project management software to avoid resource conflicts.
Best Practice: Implementation of software that provides a clear overview of all projects and resources in order to set priorities and identify conflicts at an early stage. - Availability of specialized skills and capacities:
Ensuring the availability of required expertise through targeted recruitment or external specialists. Planning resources for peak times and bottlenecks.
Best Practice: Establishment of a network of external specialists and use of capacity planning tools that make it possible to plan skill resources, i.e. resources according to their abilities.
In practice, clearly defined communication and escalation paths contribute to the efficiency and stability of overall project management and strengthen the team’s ability to work proactively and responsively.
A transparent communication structure enables everyone involved to respond to changes and challenges in good time, minimizing misunderstandings and delays.
Escalation paths are necessary to effectively address problems that go beyond the normal routine. They determine when and how these are passed on to higher levels of management, which contributes to fast and effective problem solving. Implementing such channels helps to quickly identify and resolve critical resource bottlenecks or conflicts before they have a major impact on project processes.
The following table provides an overview over frequent problems in resource planning and appropriate solution approaches.
| Frequent resource planning problems in MPM | Solution approaches and best practices |
|---|---|
| Unclear requirements and imprecise resource estimates |
|
| Communication gaps and lack of leadership |
|
| Missing flexibility and adjustability |
|
| Conflicts in resource assignment |
|
| Shortage of specialists and skilled workers |
|
Technology and specialized tools enable a significant boost in efficiency by automating routine tasks such as resource creation and assignment. This reduces the manual effort and minimizes error sources which leads to more precise and faster decisions.
Real-time dashboards and analytics provide comprehensive insights into resource utilization and availability, improve transparency and support the identification of bottlenecks and overloads.
In addition, software promotes a high degree of flexibility and adaptability. They allow you to rearrange ressources quickly and to make adjustments to be able to react to changes in the project landscape or to unforeseen events.
By integrating scenario planning and dynamic adjustments, companies can react proactively to changes and optimize their resource utilization.
What should project management software be able to do for effective resource planning in MPM?
The Digitalzentrum Chemnitz confirms that the waste of scarce resources and the failure to exploit synergies are among the biggest challenges in multi-project management.
The use of project management software in multi-project environments aims to achieve a transparent and efficient resource planning.
Below we show you which specific functions a project management software for resource planning in multi-project environments must offer in order to fulfill these requirements.
Important functions of PM tools for resource planning:
- Real-time data processing: provides up-to-date and precise information.
- Central Data Management: Bundles all relevant project and resource data in one place.
- Efficient resource assignment: Enables optimal distribution of resources, approval workflows automate the process.
- Scenario Planning: Creates a simulation and adapts the resources to different project scenarios.
- Prioritization functions: Evaluates and prioritizes projects based on defined criteria.
- Capacity and bottleneck analysis: Allows resource bottlenecks to be recognized and managed at an early stage.
The PLANTA Project project management software is the ideal solution for resource planning in multi-project management since it offers all necessary functions for efficient management and planning. It provides precise real-time data, bundles all relevant information centrally and allows for optimal resource allocation. With scenario planning and prioritization functions as well as capacity and bottleneck analyses, you can identify free capacities and plan resources without overloading. This makes resource planning particularly efficient and cost-saving.
PLANTA Project also offers a structured request/approval workflow for resources, improved by measures for performance optimization and usability; including a modern Web Client version with extended management functions and access to important KPIs.
How to optimize operational resource management in multi-project environments?
Operational resource management in multi-project management includes the daily management and optimization of resources that are necessary for the simultaneous realization of multiple projects.
Resource planning in project management includes:
- Clear Definition of Objectives and Tasks: A precise definition of project objectives, results, and milestones is indispensable. The objectives of each project must be aligned with the overall business objectives to ensure targeted resource allocation and prioritization.
- Planning of the required resources: The precise recording and planning of all required resources – human, material and financial – is crucial.
- Use of resource management software: Specialized resource management software provides centralized data management, real-time monitoring and prioritization capabilities.
- Evaluation of empirical values and data: Experience from previous projects and market analyses help with realistic estimates and planning. Continuous exchange within the team improves future planning and execution.
- Team communication and collaboration: Effective communication and close collaboration within the team and between the departments are essential. This helps to avoid misunderstandings and ensure optimal resource utilization.
Avoidance of resource conflicts through operational planning
Operational planning is decisive for avoiding resource conflicts, especially in multi-project environments.
This planning essentially includes:
- Prioritization: By setting clear priorities for projects and allocating resources according to their urgency, conflicts between competing projects are minimized.
- Central coordination by software: The use of multi-project management software enables a central overview of all resources and projects. This helps to identify and avoid overlaps and duplicate assignments.
- Flexibility and quick adjustment: Modern software solutions like PLANTA Project offer functions for the quick adjustment of resource assignments. This enables an efficient response to changes and prevents delays caused by resource conflicts.
Efficient use of resource groups
In multi-project management, the formation of resource groups enables central management and optimal coordination of resources.
In resource groups, similar resources are bundled, e.g. by competence, to better coordinate and plan their use.
Cross Training is the training of employees in several disciplines. The implementation of enables the flexible use of resources. These methods reduce the dependence on specialized staff.
In multi-project management software like PLANTA Project, you can also manage individual resources as resource groups besides many other types of resources like machines, facilities, or financial resources.
Process and criteria for the prioritization of projects
In order for resources to be allocated to the most important projects, the projects must first be prioritized.
For this purpose, you first have to define the evaluation criteria. Depending on the project, these include strategic importance, return on investment (ROI), urgency, risk and availability of resources.
Project evaluation is based on these criteria using various methods. You can, e.g., use a scoring model in which projects receive points for each category and the total number of points is used for prioritization. Another method is the priority matrix in which the projects are categorized according to urgency and importance in order to obtain a visual representation of the priorities. Cost-benefit-analyses evaluate projects based on the expected costs and the potential benefit or ROI. The balanced scorecard offers a comprehensive assessment from various perspectives such as finance, customers and internal processes. Further methods are, a.o., Weighted sum model, Eisenhower matrix or SWOT analysis.
Based on the evaluation, a priority list is created, which sorts the projects by their importance and urgency. This list serves as basis for decision-making for resource allocation and project planning.
What are the success factors for effective multi-project management?
Successful multi-project management requires clear priorities, structured planning and flexible resource utilization. End-to-end communication and the use of suitable software solutions for monitoring and controlling multiple projects are essential. Furthermore, regular status updates and a continuous alignment of the project objectives with the company objectives are of pivotal importance.
Technology plays a key role in increasing efficiency in multi-project management. Software solutions offer functions for resource planning, real-time monitoring and prioritization, allowing for better coordination. Automation tools help to reduce the work load and avoid bottlenecks, while dashboards and reporting tools provide transparency regarding the project progress.
Effective stakeholder management secures the support and commitment of key decision-makers and thus directly influences the allocation of resources. By working closely with stakeholders, their requirements and expectations can be identified at an early stage and integrated into project planning.
Because framework conditions and priorities can change quickly in a dynamic business environment, it is essential to align project priorities in real-time. Flexible project management, supported by real-time data and scenario analysis, makes it possible to quickly shift resources and schedules to respond to new requirements without jeopardizing the overall project plan.
The most important metrics include resource utilization, adherence to schedule, adherence to budgetand the ROI of the projects.
Other KPIs include the project troughput time, the number and type of resource conflicts as well as stakeholder satisfaction. These key figures provide information on the efficiency of multi-project management and help to identify and improve potential weaknesses.
What are the differences between resource planning in multi-project management and single-project management?
The resource planning in multi-project management differs from that in single project management particularly in terms of complexity. In multi-project management, resources must be coordinated and prioritized across several projects. This often leads to bottlenecks, as the same resources may be needed in different projects at the same time. The complexity lies in the overarching project coordination, where resources have to be continuously reallocated in order to drive all projects forward.
Single project management, on the other hand, places the focus on a specific project. The project manager concentrates fully on a clearly defined goal and its successful implementation.
Individual projects can also be demanding and complex, especially when it comes to large-scale projects with long durations or high requirements. This is where project management software can help to make the planning of deadlines, costs and resources more efficient. Challenges arise when projects are very extensive in themselves, but the focus remains on a clearly defined project.
In multi-project management, these challenges sum up, since multiple projects must be controlled simultaneously. Scarcity of resources, changing priorities and the need for continuous coordination and redistribution make management much more complex than in individual project management. Especially in sectors such as the pharmaceutical industry or automotive development, where projects often run for years and require numerous resources, comprehensive and flexible resource planning is essential.
What they have in common, however, is that in both cases resources must be managed efficiently to achieve the project objectives and ensure the successful conclusion of projects.
Conclusion on resource planning in multi-project management (MPM)
Effective resource management in multi-project management is essential in order to avoid conflicts of resources and conclude projects in adherence to schedule. It requires clear prioritization, central data management and the ability to react quickly to changes.
Software solutions such as PLANTA Project facilitate this process by providing analyses, capacity planning, and automatic resource assignments. They also support functions such as scenario planning and flexible approval processes to manage resources efficiently and transparently.
FAQs on Resource Planning in Multi-Project Management
How does corporate culture influence resource planning in multi-project environments?
An open and collaborative corporate culture promotes clear communication. This creates flexibility when it comes to the efficient use of resources across departments.
Hierarchic structures can, however, slow down decision-making and alignment. A corporate culture that is too open can also prevent necessary decisions from being made quickly – for example, if there is a lack of decision-makers and the various aspects are discussed again and again instead.
What impact does the global dispersion of teams have on resource planning?
Global teams require coordinated planning across different time zones. In addition, cultural differences in ways of working must be taken into account. Both complicate the coordination and availability of resources.
On the other hand, global teams bring intercultural perspectives into the project and different time zones and ways of working can even be regarded as enrichment of projects.
Can agile methods improve resource planning in multi-project environments?
Yes, agile methods allow for a more flexible resource distribution and faster adjustments to changes, which is of advantage in multi-project environments.
