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What is Resource Planning, and How Does it Benefit Businesses?

What is Resource Planning

Imagine the following scenario: A multinational company hastily assigns a high-cost resource to a critical project, only to discover that there was a low-cost, similarly skilled resource available in the organization. By deploying this expensive resource, they ended up exceeding the project budget. This is one of the direct consequences of poor resource planning.

Therefore, to avoid such scenarios, businesses must implement an efficient resource planning framework that will enable them to anticipate project requirements ahead of time. This will ensure that the managers have the right resources prior to a project’s onset, enhancing the overall delivery and maximizing the firm’s ROI. 

This article discusses the key benefits of resource planning in organizations and how SAVIOM’s resource management solution can help. 

Let’s dive in.

Consequences of Poor Resource Planning

According to the Bull survey conducted by Spikes Cavell, “39% of projects fail due to lack of planning.”

Without an efficient resource plan, firms risk misaligning client expectations and the project’s scope. Consequently, they may struggle to assess current and future resource requirements, resulting in last-minute scrambling for competent resources, sometimes at escalated rates.

Further, without a proper resource plan, managers are unable to foresee resources’ attributes like skills, competencies, availability, capacity, etc., leading to incompetent allocation. This can lead to employees feeling over- or underwhelmed with their workloads.

Moreover, if this cycle persists uninterrupted, it can lead to physical and mental exhaustion, burnout, decreased productivity, subpar project quality, and delayed delivery. As a result, firms may find it challenging to seize or retain growth opportunities, which can affect their bottom line in the long run. 

Now that we have established the consequences of inadequate resource planning, let’s examine some of its advantages.

5 Business Benefits of Resource Planning 

An efficient resource planning process identifies, forecasts, and allocates best-fit resources to the projects at the right time and budget, which is critical to organizational success. 

Let’s understand in detail.

Reduces project resourcing costs

When firms lack the requisite resources to undertake projects beforehand, they may have to engage in last-minute expensive hirings, which can spike project costs. Further, when managers allocate underqualified employees to projects, it causes a delay due to a lack of necessary skills, leading to budget overruns. 

A robust resource plan will help managers minimize the project resourcing costs significantly by avoiding allocating over/underqualified resources to projects. Additionally, it will help leverage global resources from low-cost locations and keep the projects within budget. It also allows sufficient time for planned recruitment and developing a suitable resource mix to reduce unnecessary cost escalations.

Helps forward plan pipeline project requirements 

When managers are unable to foresee pipeline project resource requirements in advance, it leads to last-minute firefighting to secure suitable employees. With an efficient resource plan, managers can assess the workforce’s type, quantity, primary skillsets, availability, etc., in advance.

In case of discrepancies, they can take necessary resourcing measures to ensure that they have a competent talent pool well ahead of the curve. Consequently, organizations can guarantee timely project initiation and meet predetermined milestones to enhance overall business efficiency.

Bridges capacity vs. demand gap in advance

Upon evaluating the resource requirements of the pipeline projects, managers perform a demand gap analysis to determine if the firm has a resource deficit or excess. In case of any variance, managers can create an effective resource plan to bridge the capacity vs. demand gap proactively. For instance, in case of resource excess, managers can bring forward project timelines or sell additional capacity at a discounted rate. 

Conversely, in case of a deficit, managers can implement necessary training/development programs, leverage out-rotation & backfill strategy, or hire contingent/permanent resources to bridge the gap. Ultimately, these measures will help eliminate last-minute resourcing bottlenecks to ensure seamless project execution. 

Ensures competent resource allocation across the enterprise

If managers are unable to allocate the right resources to suitable projects, it can lead to skill mismatches, double bookings, compromised project quality, etc. With a proper resource plan, managers can deploy resources based on their availability, skills, competencies, etc., to projects, ensuring they are productive from the day they are onboarded. 

For instance, an IT consultancy firm receives a high-priority cloud migration project. The manager checks the resource’s attributes and strategically allocates a senior cloud solutions architect to create a blueprint and transfer data from on-premises infrastructure to cloud-based platforms. Thus, when appropriately skilled employees work on the right tasks, projects are completed successfully. 

Maximizes productive utilization of resources

When resources are consistently assigned tasks beyond their capacity and availability, it leads to over-utilization. Conversely, when they are allocated to non-billable or mundane tasks for a prolonged period, it results in their under-utilization. To avoid such situations, managers must create an effective resource plan.  

For instance, in the case of overutilization, managers can apply optimization techniques to adjust project timelines or deploy available resources to ensure balanced work distribution. In the case of underutilization, firms can deploy resources from non-billable to suitable strategic or billable projects. It will help enhance the billability of resources, maximize their productivity, and improve organizational profitability.

Now, let’s understand how a robust resource management tool can help.  

How can modern resource management solutions help plan resources efficiently?

Saviom’s advanced resource management software empowers managers to plan, allocate, and utilize resources effectively to enhance productivity and maximize profitability. Here is how:

  • The tool’s 360-degree visibility combined with advanced filters allows managers to assess critical metrics and attributes such as skills, competencies, availability, etc., to find the best-fit resources, facilitating competent allocation.
  • The advanced forecasting capabilities and capacity vs. demand report help assess the pipeline project demands and swiftly bridge the gaps in case of variances for timely project initiation.
  • Moreover, the utilization reports and color-coded heatmaps help managers apply corrective measures in advance in case of resource over- or underutilization. Additionally, the forecast vs. actual reports allows managers to evaluate the discrepancies and implement measures to optimize the resource health index and ROI.
  • Lastly, the modeling and simulation functionality helps analyze various scenarios and compare outcomes to see how they impact the firm. This enables managers to arrive at the most viable outcome and apply it to the actual resource plan.

In conclusion, all these advanced features help firms facilitate effective resource planning, ensuring smooth project progress.

Conclusion

In the words of Alexander Graham Bell, renowned inventor and scientist, “Before anything else, preparation is the key to success.”

Therefore, the onus is on the managers to prepare and implement a detailed resource plan, which is imperative for successful project delivery. Besides, when coupled with intuitive resource management software, the abovementioned benefits will enable firms to eradicate any bottlenecks ahead of time and enhance organizational performance.


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