Resource Planning in Project Management: a Guideline

What is resource planning in project management?

Resource planning in project management means the planning, scheduling, and assignment of resources. By definition, resources can be persons, technologies, money, and materials.

The objective of efficient resource planning is to deploy available resources in such a way, that they are utilized optimally and bring the greatest possible benefit to the company. Furthermore, resource planning is supposed to prevent conflicts and avert damage.

Why is resource planning in project management important?

If resources are planned correctly in the project, it is possible to utilize them efficiently and to lower costs since utilization gaps can be identified and the resources in question can be used for other purposes. This is done by determining:

• for how many hours the resource is required in the project,
• what the specific requirements are and
• whether and how long they are available at the required point in time.

If the resource is not available, special software products and tools for resource planning in project management can show specific alternatives. With its “request workflow for resource planning“, our project management software PLANTA Project supports the persons responsible in their planning and approval of required resources. 

This way, the project team can be compiled in a cost efficient way and high cost factors can be identified. If another employee has the required qualifications but a lower hourly rate, this employee can be deployed in the project. These results can also be used for personnel planning and for the timely recruitment of new employees. Our whitepaper on efficient resource management shows how resource management can help you to reduce costs and increase your profits.

How does resource planning in agile projects differ from resource planning in traditional projects?

Resource planning in the traditional sense refers to the long-term deployment of resources. In agile project management, planning is usually carried out in short sprints.

This means that current events, such as the breakdown of a machine or the acquisition of a new machine, can be responded to more effectively and resources can be used more efficiently. In contrast to traditional planning, where decisions are made from the top down, agile project management involves the team when making decisions. This often increases agility and motivation in the team.

Which elements does efficient resource planning comprise?

Efficient resource planning comprises the following components which are required as resources for the implementation of projects:

• Resources: This includes, a.o., persons, departments/teams, machines, and facilities. The personnel includes the project team which is required for implementation. The associated personnel costs and, in the case of external staff, the corresponding hourly rates should also be entered. Planned absence times (such as vacation, business trips, etc.), weekly working hours and days, company vacations and public holidays should also be available.
• Skills: Each employee has different skills and experiences. The software should support you when you want to, e.g., choose an IT employee with respective skills for a project.
• Capacities: The project management methods of resource planning include capacity planning, since all resources are limited. For example, quantities of production machines, the capacities of members of the project team, the size of the budget, etc. play a decisive role.
• Time: Time is also an important factor. There are deadlines, milestones, project objectives to be adhered to, time effort for the completion of tasks to be estimated, and often there is a chronological sequence of tasks that are related to each other. If completion is delayed, subsequent tasks may be postponed and planned resources may no longer be available or only partially available, which can drive up project costs. 
• Data: In resource management, data plays an important role. Data allows you to precisely define the project assignment and incorporate existing results, evaluations, and project processes. If data from a reference product is already available, it can be used for resource planning. This makes the resource plan more accurate and reduces potential sources of error when estimating existing processing, prototyping, or production times.  

Each of these resources is relevant for the realization of a project. If one of the resources, e.g. an employee who is to operate a machine, is not available, then production comes to a hold, even though the machine is assigned exclusively to the project and is thus “available”. 

If all resource requirements are clear and software-supported resource planning has taken place ideally, a forecast of the resource requirements in projects (personnel, budget, time) can be created. This also allows to estimate potential risks. This allows for clear communication with the customer, who can thus be involved in decision-making or informed about costs and risks on the basis of the forecast.

What is the difference between strategic, tactical, and operational resource planning?

In the case of short-term projects tasks we speak of operational resource planning. It ensures that all current projects are planned and tasks are accomplished in day-to-day operations. 

For medium-term actions and decisions, such as budget questions, we speak of tactical resource planning. This involves pursuing medium-term goals and breaking them down into actions. 

Strategic capacity planning in project management focuses on long-term goals. The aim is to use resources optimally and in line with the project and company objectives and to create advantages over other competitors. 

If these planning levels are considered and evaluated in a differentiated manner, company projects can be optimally implemented, planned, and strategically integrated. Companies often work almost predominantly at the operational level, which can lead to other companies overtaking them in the long term. Companies which plan their project portfolio, identify the project ideas which are most suited to pursue the company’s strategic objectives and verify risks and opportunities of these project ideas. Suitable projects are then prioritized, planned in project portfolios, and managed as operational projects.

How can resource conflicts and capacity problems be resolved?

A frequent problem in resource conflicts is, that there are different projects in different departments that have the same priority. This inevitably leads to collisions. A multi-project management software helps to get an overview of simultaneously running projects to assign priorities within and across projects. and to identify overlappings/conflicts.. 

How can resource conflicts and capacity problems be resolved?

A frequent problem in resource conflicts is, that there are different projects in different departments that have the same priority. This inevitably leads to collisions. A multi-project management software helps to get an overview of simultaneously running projects to assign priorities within and across projects. and to identify overlappings/conflicts.. 

Furthermore, project planning and approval processes can be mapped and made accessible to all levels in the company. The tool also helps them to prioritize tasks in projects and to plan the capacities of their resources as well as the budgets in a strategic way. 

The more detailed the planning, the required skills, the height of the respective costs, the availability, and possible alternatives are specified in a system, the easier it is to make changes to the planningas well as to the costs. Some companies designate a resource manager for resource planning to unburden the project managers.

The budget is another critical point. This is often a reason why resources are not available or not sufficiently available. With the right software and tools for resource management, you can create resources, their costs and availabilities as well as calculations. This helps to take costs into account at the quotation stage and to find alternatives. Outsourcing can be a solution when it comes to peak times, for example. Furthermore, scenarios are mapped, so that you can also see the impact on costs, dates, and utilization.

A lack of communication can frequently be identified as the cause of conflicts.. According to the Project Management Institute (PMI), it presents one of the main reasons why a third of the projects is not completed successfully. Here, project management software products for resource planning offer functions like task and team control. These provide clarity for all parties involved and support in finding solutions. This also saves time, as the tools are tailored to project requirements. Some companies say that they can work off tasks in a third of the time while increasing data quality, and thus save time. The time saved can, e.g., be used to provide the team with further information, to school them or to improve communication in other ways. 

Here are some use cases from companies that have improved their resource management using PLANTA software:

• Prior to the implementation of the PLANTA Software, DRV BW (Deutsche Rentenversicherung Baden-Württemberg) worked with inconsistent planning and control methods. As a result, DRV BW had no reliable information on effort, costs, dates, and resource utilization before project approval and during the project runtime and monthly project lists caused a great deal of manual effort. There was also a lack of transparency regarding communicated employee overloads. Further problems were caused by changing prioritizations within the projects. Thanks to the implementation of PLANTA’s multi-project management system, all data is now created and managed in a common tool. DRV BW can provide all parties involved in the project with current figures at any time and tell exactly how much a project really cost after its completion.
• At eQ-3, the project statuses were not transparent and the utilization of its personnel was unclear which made it difficult to plan new projects and manage ongoing projects. This was especially true for projects where several employees were involved and the development plan comprised several individual developments. By implementing PLANTA’s multi-project management system, the company now has a precise overview of the entire project situation including all project costs, runtime, and resource planning and can quickly identify deviations and find solutions.
• Uhde High Pressure Technologies (UHPT) had problems in scheduling and resource planning. As a result, delivery deadlines could often not be met and resources were planned ineffectively. A uniform project planning process was also missing. UHPT was therefore looking for software that would reliably support the entire process – from planning, development, production and service after delivery. PLANTA Project helps the company to map projects and control processes in a standardized manner, to integrate employees and carry out simulations of projects or make changes without any impact on the productive environment.

Resource Planning in Project Management with a Suitable Software and Tools

There are different software products and tools for resource planning. Small projectswith few resources are often processed with existing software products such as table or text processing programs as well as clendars or scheduling systems. If projects become largerand more resources are required, such programs often reach their limits. Furthermore, the fact that there is no or only a small number of interfaces to existing programs and problems with access rights while, e.g., also other personal data is stored there, can be a cause for error sources and reduce the swiftness and transparency of decision-making.

Therefore, project managers and selected project employees should be provided with a professional tool or professional software. Such software can establish interfaces to other programs and only imports the data which is actually required. Here, respective access rights to the resource management for project management ensure compliance with data protection requirementsand internal company specifications.

Here, a project management software for resource planning with a respective range of functions makes sense, so that readily stored dependencies and follow-up dates are automatically adapted and optimized. If an employee is then no longer or only partially available, many programs show alternatives so that other colleagues with similar qualifications can take over the project in full or in part. Furthermore, professional software products show warnings if delays on the critical path jeopardize the project objective. 

Please also make sure that the project management software offers sufficient multi-project management functions , so that you can optimally control simultaneously running projects, e.g. with the multi-project management tool PLANTA Project. 

It should also have a status report function. This saves each project manager around four hours per month that would otherwise be needed to compile data from various sources. Standardized reporting saves money – about two hours per month for each project manager. 

Another important subject is data protection. Professional project management software offers interfaces to common programs and imports defined and approved data into the system. Other data remains protected and is not, partially or completely visible depending on the authorization level. It also implements data protection standards, such as data storage in accordance with the GDPR and BDSG (German federal data protection act), server locations in Germany and Europe and much more. Data such as status reports, for example, should be saved unalterably after they have been released.

All project employees who have the relevant access work in the same system and therefore have the same and comparable data. Professional software allows for communication within the software. This leads to increased efficiencyby resource management. Stored templates and templates that do not have to be created again reduce the project time per new project by around four hours.

Good project management software should display the workload of departments and support rescheduling in the event of resource conflicts, for example by moving projects via mouse-click. The option to view alternative plannings in simulations makes it easier to estimate the impact of a project. Features for risk management and cost management are essential.

What challenges and best practices are there in resource planning?

Unclear requirements are one of the challenges which may occur when creating the resource plan. Insufficient data and information can also lead to inaccuracy in time estimates and may cause underload or overload in practice. Lack of leadership, unclear allocation of tasks, lack of communication in the team as well as scarcity of resources are further challenges in everyday project work. Unexpected situations complicate resourceplanning as well.

The following measures can help you with this:

• clear definition of tasks and objectives,
• constant review of objectives, results, and dates,
• joint coordination of priorities, 
• open communication,
• Ability to take criticism, 
• Recognition of mistakes and the ability to learn from them,
• Team dynamics and
• resource management.

All of this can facilitate resource planning and ensure that projects are implemented successfully. Data should be kept up to date in the system so that, on the one hand, forecasts are based on real data and, on the other, the results can be used for comparable projects at a later date.

What role do soft skills play in resource planning?

In project management, many people are involved, such as project managers, the project team, suppliers, stakeholders, customers, employees, and many more. In addition to the required specialist knowledge, soft skills like communications skills, team spirit, the ability to take criticism, and stress management play an important role. 

Transparent communication in project management usually refers to the fact that everyone in the team knows which task has been completed to what extent, where there are problems and who is working on the task. This is particularly important when dispersed teams collaborate.

Common problems in resource planning in project management

Below you can see what problems can occur in resource planning:

1. Insufficient resource estimation: Estimating resource requirements is often inaccurate, leading to shortages or surpluses, which can affect and drive up project costs and schedules.
2. Missing flexibility: Projects always undergo changes and are subject to current events. However, rigid resource plans cannot adapt quickly enough, which leads to delays or quality losses.
3. Communication gaps: A lack of communication between team members, departments and stakeholders often leads to misunderstandings and misallocation of resources.
4. Conflicts in resource assignments: Competing projects and priorities lead to conflicts in the allocation of limited resources, which hinders project work and can delay deadlines.
5. Lack of specialized skills: The lack of team members with the required specialized skills or experience can slow down critical project phases or cause them to fail. This can also increase project costs if experts have to be bought in externally.

These problems can be dealt with efficiently with the PLANTA Software. You save costs and nerves, as you receive clear project overviews and can create and evaluate meaningful reports at the touch of a button.

FAQs on resource planning in project management

How can one predict the resource requirements for a new project with precision?

To make predictions, you can use the following methods, among others:

• Analogy estimation: Comparison with similar projects in terms of content.
• Parametric estimation: Mathematical relationship between project scope and resource requirements.
• Bottom-up estimation: Assessment of the individual task packages, their summation and extrapolation.
• Expert estimation: Consultation of experts, for example from your own project team.

To minimize uncertainties and potential risks in the planning phase, try to use as much historical results and data as possible. They improve the precision of estimations. Note that the bigger and more complex a new project is, the more errors can occur which makes the precision of predictions a little more questionable. Especially when the project did not yet exist in this form.

What are the requirements for resource planning?

Effective resource planning consists of several factors that interact. This includes:

• A clear definition of objectives and tasks,
• The availability of the required resources..
• Software which was especially developed for resource management in project management.
• Empirical values such as statistics, comparative projects and market results.
• A team that communicates with each other and learns from experience.

Why is resource planning important?

Resource planning in project management is important and is also regarded as the supreme discipline in the planning process, as inadequate resources mean that the project cannot be completed. With a professional resource plan and the right software or tools, it is possible to quickly identify whether the project objective can be achieved at all, which risks exist and where they are located, how high the probability of occurrence is, what the resulting damage would cost and what returns the project can generate.