Advanced Resource Planning Knowledge
Get a grip on resource planning
It remains one of the most challenging management topics: multi-project resource planning.
But the right dimensioning and control of human resources is a key factor for business success, especially in our dynamic and project-driven world. It is therefore all the more astonishing that many companies still fail to exploit this potential today.
Scheuring AG has specialized in this topic since the 1990s and is considered a pioneer in the field with trend-setting, practical concepts. In this more comprehensive blog post, you will find a concise presentation of what the challenges of successful resource management are and which approaches are effective in practice – with further possibilities for in-depth discussion.
What is it about?
Resource management is about balancing supply (staff capacity) with demand for resources – the load of all work to be performed.
Resource planning is part of project planning. A project will only achieve its goal if it has the necessary human resources – both in terms of quantity and in terms of the qualifications of the team members.
Above all, resource management is a discipline of project portfolio management. Resource planning from the perspective of the organization only leads to a usable result if it includes all projects as well as all ongoing business tasks. After all, projects rarely take place on a greenfield site; they are embedded in the existing organization.
Projects compete for the limited resources available in the company. The aim is to optimize the use of resources in such a way that the greatest possible benefit for the company is achieved. By prioritizing projects in a target-oriented manner and by correctly dimensioning personnel capacities, bottlenecks or overcapacities are to be avoided. Those who tackle this task consistently will better achieve the project goals, reduce costs, but also increase the confidence and satisfaction of the employees. In the end, professional resource management makes a substantial contribution to the success of the company.
Challenge: the matrix
Resource planning is considered the supreme discipline of project and project portfolio management. Both consultants and providers show great respect for this complex task.
The high complexity of resource planning is mainly a result of the matrix situation that usually exists: Project managers request capacities from employees that they usually do not have. They are dependent on the line managers to provide capable employees.
Different interests collide: the project manager's project goals on the one hand, and the achievement of an even workload of employees that is neither too high nor too low on the other.
The concept of two worlds
By far the most important approach to managing this high level of complexity is the concept of two worlds developed by Scheuring back in the 1990s. In this approach, a deliberate distinction is made between project portfolio management and resource planning on the one hand and detailed project planning on the other.
While project planning is broken down to the level of activities (classic project management) or tasks (agile), resource planning takes place at a coarse level of the project structure – such as phases or releases. The coordination of project planning and higher-level resource planning remains primarily a communicative task between project managers and line managers. A "soft" system-technical integration of the two levels, as implemented in resSolution, does not have to be excluded.
The resource planning cube
Challenge: the matrix
The fact that resource planning with Excel spreadsheets quickly reaches its limits is due in large part to the three dimensions that need to be represented.
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WHAT: the project dimension, including projects, project phases, but also tasks from the operational business,
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WHO: the resource dimension, including people and organizational units,
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WHEN: the time dimension (in units of days to years).
These dimensions can be visualized particularly clearly with the resource planning cube. Every resource planning system must serve these three dimensions equally. Excel convincingly covers two dimensions, while the third requires cumbersome and error-prone auxiliary concepts.
Resource planning with resSolution focuses on the data cube. Not only can it be accessed from all three perspectives, the views can also be edited directly. And the change between the perspectives is done in the simplest way with one or two mouse clicks. This approach accounts for a large part of the system's high working efficiency.
Expansion to professional controlling and project portfolio management
An important step beyond pure resource planning is the introduction of concurrent effort controlling. This focuses on the following variables
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Budget: the originally planned, released effort value
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Actual: the total of actual expenses incurred up to the reporting period
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Remaining: the effort required to complete the work, taking into account a realistic estimate
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Forecast: the sum of actual and remaining effort
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Variance: the difference between budget value and forecast
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Actual data – work effort actually performed – is either recorded directly in the project portfolio management system or imported from the third-party system, e.g. SAP.
At the next level, cost data also becomes part of controlling. On the one hand, this involves the evaluation of personnel deployment by means of stored hourly rates, and on the other hand, the consideration of other costs, such as materials, components, licenses or external services.
As a last step, the expansion to an integral project portfolio management is recommended. Also this is no witch work. It means carrying along qualitative data such as project descriptions, responsibilities, status, evaluations by means of criteria or traffic lights as well as the documentation of the history or of pending management decisions. Resource planning remains a central element and supports decisions in the individual projects and across the entire project portfolio.
Designing processes appropriately
A functioning resource management requires the transparent and expedient design of processes and roles: Who is involved in the various process steps and in what form, and what is the periodicity of this task? A real sticking point is the interaction between project managers and the line units. Here, the interests of both players need to be meaningfully mapped and communication and coordination need to be expedient, both organizationally and in terms of software deployment.
A very valuable tool is the project portfolio management roadmap developed by Scheuring. The use of this tool forces to address and regulate all aspects related to processes and roles.
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In the context of these processes, the following questions also need to be answered:
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What granularity is chosen for project structuring – lump sum planning at the project level, planning at the level of project phases (often appropriate in practice), or even more detailed? The latter should be considered with great caution according to the concept of two worlds.
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How centralized or decentralized should planning be? Which tasks are to be performed or supported centrally, for example by a project portfolio management office?
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Is resource planning done at the employee level or is it broken down – fully or partially – only to the level of organizational units (e.g., teams)? The latter may be appropriate if the employees in the teams are homogeneous, or in agile environments where detailed resource planning is done autonomously by the team.
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In which bodies and how often do coordination and decisions take place between the players involved?
Resource planning in agile environments?
Resource planning is neglected or not discussed at all in technical papers on agile project management. However, it is a dangerous fallacy that planning and control of capacities and loads becomes obsolete due to the self-organization of development teams. I have written a comprehensive white paper on the subject of Agile.
Here is an excerpt from the conclusion: "And finally, it is necessary to demand that resource planning is introduced and consistently managed at a higher level and across all projects of the organization. In doing so, the development team leader provides the link between the project and the overall project portfolio level."​
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We will be writing a separate blog post on this topic in the foreseeable future. However, interested parties can already request the whitpaper by sending an email to heinz.scheuring@scheuring.ch.
Resource planning software
The concept of two worlds has a strong impact on the design of project and project portfolio management systems.
The good news is that if you run project detail planning separately from project portfolio management and resource planning, as most organizations do, you don't have to hide. Microsoft Project for project dependencies and scheduling and Excel for team resource planning are not a questionable tandem. Meanwhile, those who want to elevate resource management for more than a handful of people to a professional level will need to look at replacing the spreadsheet with a professional project portfolio management system with a compelling resource planning capability.
As shown, multi-project resource planning cannot be handled with conventional project management tools such as Microsoft Project. If you want to meet the needs of line management and executive management, you need a system addressing the management of the entire project portfolio. With respect to the resource planning function, the following capabilities are among those required
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The application does not focus on the project, but on the entire project portfolio.
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A multi-level organizational structure can be mapped.
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The efforts can either be distributed (automated) between start and end dates or allocated directly (manually) on the time axis.
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In addition to the planned data, actual data can also be mapped, either by means of the integrated time recording function or via import from the ERP or time recording system.
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In addition to the planned and actual data, the system offers effort controlling with forecast data and deviations from the original/budget values.
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If, in addition to resource management, project portfolio management is also to be comprehensively supported, it must be possible to map planned and actual costs in terms of both the personnel resources used and material costs, as well as qualitative data.
The success factors in brief
When introducing successful resource management, the following success factors must be taken into account in particular:
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Line management is aware of its leading role in resource planning and takes the lead in this task out of conviction.
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The agreements between project and line in the matrix situation are understood and lived by both partners as a contract.
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Resource planning takes place on a rough planning level.
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The separation of resource planning from individual project detail planning is not a failure, it shows wisdom.
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The software focuses on project portfolio and resource management, not individual project planning.
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The comparison of plan and actual is used as a basis for "learning on the project portfolio."
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Processes, roles, and standards are defined, enforced, and lived.
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Deepening options
You can also take advantage of the following opportunities to delve deeper into the topics surrounding multi-project resource planning.
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Erfolgsfaktoren bei der Personaleinsatzplanung
In-depth article in Swiss IT Magazine on the basics and success factors of multi-project resource management. Download. In German. To the download.
Agiles Projektmanagement – vom Dogma zum Businessnutzen
Whitepaper "Agile project management – from dogma to maximum business benefit". Illuminating central aspects of agile development, possible causes of implementation problems and approaches to solutions. With a special emphasis on resource management. In German. Request the whitepaper at heinz.scheuring@scheuring.ch
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Software muss nicht fliegen
Professional article by Heinz Scheuring in the reputable management magazine IM+io with a plea for a paradigm shift in business software. In German. To the download.
Radikale Business Software
Technical book by Heinz Scheuring, 206 pages. Examples, beliefs and approaches for benefit-oriented software. In German. Here you can order the PDF version free of charge: https://www.ressolution.ch/buchbestellung
resSolution Website / Topic Resource Planning
The resSolution website in connection with the demo platform offer insights into the functionality and possibilities of the software: ressolution.ch
Here is the direct access to the "resSolution house" on the platform: demo.hypermanager.ch
