These are the pertinent questions that stakeholders ask themselves on an everyday basis. To get the correct answers, we need efficient resource planning.

Without implementing the proper process and technique, making any decision will be like throwing darts in the air.

Resource planning can address these challenges in today’s dynamic business conditions. It helps plan resources intelligently from the ground up and continuously optimize your workforce. However, taking a shortcut and failing to make a timely decision will adversely affect the organization’s business objective.

This guide is curated for enterprises to gain a detailed understanding of resource planning in project management.

Let’s dive deep into it.

Resource planning definition

Resource planning is the process of identifying, forecasting, and allocating best-fit resources, i.e., human resources, equipment, assets, facilities, and more, to the projects at the right time and cost.

It also ensures the efficient and effective utilization of resources across the organization. In other words, it’s the strategic planning process to make the best use of resources depending on their capacity/availability and deliver every project within time and budget.

Let’s take an example: your firm is an IT company, and you have a software development project in the pipeline received from a global client for a long-term horizon.

Here, project managers will look after the client’s requirements, assess the scope of the project, and will also predict and evaluate the resource demand. As a part of the process, they will request resources from resource managers to fulfill this demand.

The resource managers will now assess the new requirement, find out the gap between the demand and the available workforce, and look for different ways to fill this gap. This will include hiring a new workforce from the market or juggling resources available within the organization. Thus, the ability to forecast requirements and develop a strategy to plan, allocate, schedule, and utilize the resources and their competencies effectively is termed resource planning.

Once you know what resource planning is, let’s understand its importance in project management.

Importance of resource planning in project management

According to a PMI survey, “26% of companies with a dedicated resource planning solution can estimate and allocate resources to deliver projects on time.”

Thus, resource planning is a crucial part of the project management process as it plays a key role in a project’s success.

Here is a list of the benefits and how planning resources makes a difference in the project management landscape:

Allows resource planning for pipeline projects

Creating more projects in the pipeline is desirable, but not having enough resources to execute them causes project bottlenecks, delays in meeting deadlines, and impacts the quality. An intelligent resource plan and timely forecasting help managers predict all pipeline project requirements in advance.

Thereby, resource managers can either allocate a cost-effective global resource or hire an on-demand or permanent workforce with a suitable skill set. This helps reduce last-minute hiring activities, which can lead to cost escalation and compromise quality.

Bridges the capacity gap proactively

Demand forecasting, one of the significant pillars of resource planning, identifies the excess or shortage of resources by comparing the resource demand against the existing capacity. Based on this data, managers can implement the right resourcing treatments to bridge the capacity and demand gap.

CASE I: Excess of resources

When the resource demand decreases vis-a-vis available capacity, it results in excess resources. This excess capacity can be mitigated by bringing future project work ahead, adjusting timelines, redeploying resource capacity in other projects, etc.

CASE II: Shortfall of resources

When the resource demand is higher than the capacity, there is a shortage of resources. It can be resolved by exploring two different resourcing channels.

Internal Channels:

Internal recruitment focuses on the employees already on a firm’s payroll. This includes selecting an employee from the bench based on their skills and qualifications or transferring resources from different projects.

External Channels:

If the required skill is absent in the organization’s internal network, then the resource managers hire the resources from external sources. It includes hiring resources through recommendations/networks and recruiting freelance/contingent workforce from partner vendors.

Minimize project resource costs significantly

According to the Deloitte Global Cost Survey 2020: “Reducing project resource cost takes precedence over other business initiatives.”

Allocating the right resources to the right project ensures the timely delivery of the project within the budget. If resources are underqualified, a delay in project timelines is inevitable, and if overqualified, it can spike project costs. However, with an effective resource planner, managers can make data-driven decisions to eliminate the deployment of over/under-skilled resources on project tasks.

This will enable managers to implement suitable resourcing measures at the right time. For instance, they can allocate a cost-effective global/local resource or a benched resource to a task. Moreover, they will have enough lead time to conduct planned hiring in place of last-minute activities and create the right resource mix that suits the project budget.

Forecast and maximize profitable resource utilization

Resource planning and forecasting provide foresight into utilization within a project. A structured resource plan includes mobilizing resources from non-billable to strategic/billable projects for increased revenue based on their skill set. This prevents under or overutilization of resources and helps improve productivity and employee satisfaction.

Furthermore, an efficient resource scheduler allows managers to view the resource’s present and future allocations on one platform. They can also have a periodic check on forecast vs. actual resource utilization report and accordingly, optimize the utilization levels of the resources.

Ensures competent resource allocation across a matrix organization

Resource planning in project management helps managers gain a centralized view into all resource-related information, such as skill sets, cost rate, location, resource capacity, among others. This visibility and a systematic resource-requesting process help managers leverage the shared service model of a matrix organization. Thus, they can filter and load the appropriate resources to the project/tasks across departments.

Further, it empowers managers to allocate global resources from low-cost locations and control project costs. Moreover, the advanced resource scheduler ensures that strategic resources are not assigned to only high-priority projects but are uniformly distributed across the enterprise. This ascertains competent resource allocation in projects and allows resources to work on different assignments and improve their portfolios.

Delivers project on time and within budget

PwC Project Management Insights states that “30% of projects fail due to a lack of resources.”

The benchmark for successful delivery is meeting project deadlines and avoiding budget overruns. Efficient resource planning ensures that all project resourcing requirements are identified and fulfilled. This also involves periodically reviewing project performance throughout their lifecycle as resource demand fluctuates occasionally.

However, by using forecast vs. actual reports, resource utilization heatmap, etc., managers can monitor and control project budgets. Regular monitoring will ultimately lead to accomplishing the most critical project metrics, such as client satisfaction, higher retention, enhanced work rate, and increased brand loyalty.

Let’s gain insight into the critical elements of resource planning.

Essential components of resource planning template

A robust resource planning software will enable managers to effectively manage resources, mitigate risks, and drive projects to success. Here are some salient features that are foundational to efficient resource planning.

Multi-dimensional resource planner

Identifying the project’s resource requirements is a fundamental aspect of resource planning. This involves analyzing the quantity and type of resources required, i.e., human or non-human. Moreover, it also includes a thorough evaluation of the skills, competencies, and subsequent proficiency levels needed for accomplishing projects and subsequent tasks.

With a multidimensional resource planner, managers have visibility into resource profiles across multipe dimesions such as as team, departments, location, etc. It empowers them to allocate appropriate resources in real time to the projects. In other words, it allows managers assign the best-available-best-fit instead of the first-visible-first-fit resource, enabling competent allocation for all projects.

Saviom Enterprise Resource Management helped us complete 10% more projects with 10% fewer technicians.

Learn how Saviom’s futuristic resource planning solution helped Global Wind Services streamline their resourcing processes.

Project pipeline planning

Once a pipeline project reaches a certain probability stage, the manager estimates the resource requirements and initiates the requisition process. The corresponding resource manager then begins the fulfillment of the request. But first, they must analyze if the organization possesses adequate internal resources to start the project. Therefore, the resource manager compares the existing resource capacity against the project demand from multiple perspectives such as role, department, team, skills, etc.

This meticulous evaluation helps firms identify the shortages or excesses ahead of time. Accordingly, managers can apply appropriate resourcing strategies such as training/upskilling, out-rotation and backfill strategy, or staggered hiring for niche resources. This approach minimizes wasteful hiring/firing cycles to ensure that the right resources are available for projects at the right time and cost.

Resource utilization forecasting

Resource forecasting techniques enable firms to optimize billable and strategic utilization. It allows mobilizing resources from non-billable to billable or strategic work. Resource planner helps to control project financials by comparing forecasted with actual utilization. It also detects and proactively mitigates under and over-resource utilization.

Further, managers can refer to comprehensive utilization reports, color-coded heatmaps, etc., to identify under/overutilization of resources. Consequently, they can implement resource optimization techniques such as levelling and smoothing to ensure optimal profitable utilization and productivity.

Resource capacity planning

Forward planning resource demand for current and pipeline projects is essential to avoid last-minute scuffles for competent professionals. With robust resource capacity planning, organizations can analyze the enterprise’s resource capacity vs. project demand gap. This foresight helps identify resource excess or shortage and implement corrective steps to bridge the gap.

In the case of a resource shortage, managers can facilitate proactive strategies such as re-training employees or hiring a contingent workforce. Conversely, when there is a resource excess, they can bring forward the project dates. Simultaneously, capacity resource planning helps minimize bench time by adjusting timelines or selling excess capacity at discounted rates and building an optimized project team that is future-ready.

Bench management

With a resource planner, managers can gain early foresight into the workforce that will land on the bench due sudden ramp-down activities. For instance, when a project finishes and the next one begins, managers are prepared well in advance and can proactively allocate these resources to suitable project vacancies on time.

Resource managers can look into project vacancy reports and plan work for resources before they hit the bench. This will reduce bench time between projects for most resources and improve the organization’s bottom line. Additionally, with efficient bench management, managers can provide training or shadowing opportunities to selected employees to enhance their billability.

Reporting using real-time business intelligence

Modern resource planners provide real-time business intelligence reporting and analytics to fast-track decision-making in a rapidly changing business environment. These configurable dashboards and custom reports empower end-users to slice and dice relevant information effortlessly and present insights through visually intuitive graphs and reports.

Moreover, intelligent BI uses a combination of security rights, portal designs, and filters, allowing the end-user to view relevant data and prevent information overload. Additionally, it will enable managers to tailor reports to gain visibility into data matching their specific requirements. This streamlined accessibility empowers managers to make faster decisions and improves the overall resource health index.

What-if analysis for resource simulation

What-if analysis within a resource planner allows firms to build and simulate different resource scenarios in a multi-project environment. This helps managers to compare different scenarios and their potential outcomes. Accordingly, the manager can form different resource mixes, with the revenues earned, to find the most profitable project.

Thus, after deriving the best scenario, managers can apply it to the resource plan. Moreover, what-if analysis also helps prioritize profitable projects based on criteria like budget and timeline. As a result, it enables organizations to manage multiple projects’ demands with limited resources.

Creating an efficient resource plan is essential as it optimizes resource utilization, minimizes wastage, and ensures financial stability throughout the project. Here is a detailed step-by-step breakdown of the same.

How to create an efficient resource plan in 7 steps?

Here are seven distinct steps by which managers can create an efficient project resource plan:

Step 1: Understand client and resource requirements

At the outset, managers kickstart the resource planning process by thoroughly understanding both the project requirements and the resources available within the organization. This includes assessing the project scope, objectives, timelines, and budget.

Based on that, project managers can gauge the resource requirements in terms of skills, types, and number. This initial evaluation helps managers determine whether the existing skills and competency of the workforce align with the overall project goals and take appropriate corrective measures. Therefore, it helps avoid any last-minute firefighting, ensuring successful project delivery.

Step 2: Fulfill the project demand by identifying the gap

After a project manager determines the project requirements, the next step involves requesting the necessary resources from resource managers to fulfill the project demand. Resource managers play a pivotal role in assessing the capacity versus demand gap.

They meticulously analyze shortages or excesses of resources from multiple perspectives, i.e., role, skills, competency, etc. This proactive approach enables organizations to foresee resource challenges, allowing for strategic planning and resource allocation.

Step 3: Implement appropriate resource strategies to bridge the gap

After identifying the shortage and excess of resources, managers must take proactive measures to bridge resource gaps in the short or long term. This visibility into resource gaps allows sufficient lead time for the managers to initiate forward planning and take appropriate resourcing measures to bridge the gap.

For instance, in case of shortages, organizations may facilitate re-training/upskilling resources, juggling project priorities, or hiring a permanent/contingent workforce to avoid last-minute hiring/firing costs. Conversely, when the resources are in excess, managers can either bring forward project dates or sell excess capacity to optimize the utilization of every resource and ensure successful project delivery.

Step 4: Allocate the right resources to the right project

Effective resource allocation is a critical step in the planning process. By leveraging the centralized view and advanced filters, managers can strategically allocate resources based on availability, skills, competencies, and interests. This ensures that managers align the right skilled workforce with appropriate expertise to projects for optimal project success.

Managers can also create the right resource mix of senior/junior employees or contingent/permanent workforce, depending on the project requirements. It will help them control the project budget without compromising the quality of deliverables. This way, the company can consistently complete projects on time and within budget by allocating the most suitable resources.

Step 5: Consider factors that affect resourcing strategies

To effectively carry out the allocation of appropriately skilled resources to the project, managers need to consider the following factors:

• Long-term/short-term assignment

The foremost step to consider while recruiting resources is whether a firm is filling a position for a short-term or long-term assignment. For the short term, hiring a contingent workforce or freelancer is an ideal choice. However, for a long-term assignment, focusing on permanent hiring with lead time is essential. Therefore, considering the project length when hiring helps minimize wasteful hiring/firing cycles.

• Generic vs. niche skill

Generic skilled resources are relatively easy to plan for, as they are readily available within the organization. On the other hand, hiring resources with niche skills may require additional lead time due to their scarcity, which often results in higher costs. Additionally, once their assignment is completed, redeploying them within the organization can prove challenging.

• Cost of the resource

It is important that the resource managers hire the right resources with a defined skill set and experience for the project. They must look into the cost rate of the resource that fits the budget of projects. Furthermore, managers should also factor onsite, offshore, and near-shore options in the recruitment strategy to minimize the overall project resource costs.

• Attrition & succession planning

Managers need to ensure that the sudden resignation of critical resources does not jeopardize a project’s delivery. Therefore, they must implement robust succession plans to identify and train replacements for key positions within the organization. An intelligent resource planner provides a real-time competency matrix that helps managers select competent employees for leadership roles. Therefore, it not only addresses the resourcing needs of the organization but also helps monitor the resource health index.

Step 6: Monitor and control project resources

Once resources have been allocated to project tasks, it’s important to regularly track and monitor the utilization of each professional to prevent instances of under/overutilization. In case of underutilization, managers can bring forth project timelines. On the other hand, managers can implement optimization techniques like resource leveling and smoothing to mitigate overloading.

Further, project managers must anticipate and plan ahead for resource related risks such as unplanned absenteeism, turnover, lower productivity, etc. They must create risk mitigation strategies to control these bottlenecks adequately and prevent them from derailing the project’s progress. This will ensure timely project delivery within the pre-defined budget and quality standards.

Step 7: Conduct a post-project analysis

Upon project completion, it is crucial for managers to conduct a thorough post-project analysis to evaluate the effectiveness of the resource plans and identify areas of achievement and improvement. This will help scrutinize whether resources were allocated efficiently, if project deadlines were met as planned, and if any unexpected circumstances arose.

With these insights, firms can refine and enhance future resource planning efforts by identifying areas of success and potential improvement. They can develop robust and efficient resource plans that align resources with project needs, minimize discrepancies, and ultimately bolster project success rates.

Finally, these are the essential components in a typical resource planning template, which can help effectively plan your workforce. Given below are some of the common mistakes of resource planning in project management. Read on:

Common mistakes of resource planning in project management

The project resource cost can blow out of proportion, and project delivery is significantly impacted without a proper resourcing strategy. This section describes some of the common mistakes made in this area.

Using silos of spreadsheets for resource planning

Despite its limitations, many organizations still use spreadsheets to plan their resources because they are easily accessible. While this software comes at a cost, it offers significant benefits over spreadsheets. Excel resource planner causes improper allocation, double booking, and creates additional work. This system is very limiting and a nightmare to maintain.

Marketwatch states that “88% of spreadsheets are prone to errors.”

Planning resources without overall visibility

Many managers continue to allocate resources without having complete visibility of their skills, competencies, and existing bookings. As a result, it becomes difficult to allocate the right resources to suitable projects at the right time. Restricted visibility also hinders identifying and leveraging quality resources from low-cost locations.

Lack of resource forecasting for pipeline projects

Resource planning for future projects is often taken up at the eleventh hour. The resource managers make the mistake of only taking up the planning activities when the deal is signed. Ideally, it should start after the opportunity reaches a certain probability of closure so there is sufficient lead time to address resource requirements. This results in last-minute activities that create an unbalanced pool as the quality of the resources is compromised.

Not maintaining the right mix of permanent and contingent workforce

Businesses try to fulfill project requirements using full-time employees as it is perceived to be a more cost-effective solution. However, if a niche resource is hired for a shorter duration, it becomes challenging to redeploy him after the assignment is complete. Therefore, a resource plan should maintain a judicious blend of permanent and contingent resources. For short-term assignments, a contingent workforce will be less expensive than hiring full-time resources.

Allocating under or over-skilled resources to the projects

One of the common mistakes of resource planning in project management is assigning under or overqualified resources to tasks. When resources are under-skilled for the job, it causes project delays. On the other hand, over-skilled resources spike project costs. Not assigning tasks per skills and interests leads to decreased employee engagement and loss of productivity.

Unplanned hiring without analyzing project demands

Resource managers often resort to last-minute hiring activities to fulfill project resource requirements. This unplanned hiring compromises quality and leads to a large bench of mismatched skill sets. So, analyzing project demands with matching skill sets is a prerequisite for informed hiring decisions.

Knowing the common mistakes of project resource planning, let’s understand the responsibilities of resource and project managers.

Responsibilities of project managers and resource managers

Project managers operate on a project level with projects of different sizes and complexities. A project manager can manage single or multiple projects and ensure they are completed within a stipulated time and budget. However, resource managers operate at the organizational level and oversee allocating resources to several projects.

The project manager initiates the resource request for an open position within his project, and the resource manager’s job is to fulfill the same. Once a resource is allocated to a project for a particular period, the resource manager’s responsibility ends. However, the project manager’s job only begins to ensure that the resource carries out the delivery responsibilities.

Role of resource manager

In summary, a resource manager is responsible for the following:

• Planning and allocation based on resource skills, previous experience, and availability.
• Conducts capacity planning to address issues of shortfall and excesses of resources.
• Support project managers with the project resource management plan and related activities.
• Address resource concerns by reallocating resources, negotiating, or assigning additional staff.
• Collate new project requirements from the business and provide them to the hiring team.
• Certain limited HR-related functions.
• Collaboration with other departments, e.g., HR, PMO, Sales, Learning & Development.
• Generating reports and analytics for senior management.

Role of a project manager

The corresponding roles of a project manager are:

• Create a project management plan and define the scope and delivery objectives of the project.
• Capture resource requirements and request for fulfillment.
• Streamline communications with stakeholders/ team members and customers.
• Carry out operational reviews as per project KPIs.
• Estimate time and cost and monitor the budget.
• Report the project’s progress, analyze potential risks, and provide a mitigation strategy.
• Document the project and set the expectations for various team members.
• Work with the empaneled vendors for contingent resources.

These are some of the significant responsibilities of resource and project managers. Now, let’s learn about some benefits of resource planning across industries.

How resource planning benefits different industries?

Resources are fundamentally the greatest asset of any organization. It means the profitability of any company is mainly reliant on intelligent resource planning. A key aspect while planning for resources is that it helps to efficiently use workforce potential to get the best possible outcome.

Let us discuss some of the specific industries where efficient resource planning could benefit significantly:

IT industry

Due to the rapid advancement in technology, computing, and automation, IT companies face widened tech skills gaps within their workforce. Technology is changing at a fast pace, and IT professionals are under constant pressure to acquire new skills throughout their professional careers. Timely forecasting and efficient resource planning will help managers predict the demand for niche skill sets well in advance. Then, managers can employ rotation/upskilling methods to gauge these gaps and create an augmented workforce.

Audit and accounting firm

Most of the audit and accounting firms are run by their partners. These firms consider billable utilization a critical KPI to ensure profitability and sustainability. So, depending on the accounting project’s needs, an effective resource planning solution helps to forecast resource requirements (Accountants, auditors, financial analysts, tax consultants, audit interns, etc.) and utilize them for productive activities. It also enables firms to hire interns regularly, give them on-the-job training, and make them billable.

Law firms

Similar to audit and accounting firms, law firms are also run by their partners. Bringing in a client when the firm has inadequate staffing can be detrimental to its reputation and profitability. An effective forecasting and resource planning strategy helps assess future demands and find the right resource (lawyers, legal secretaries, etc.) at the right cost, age demographics, etc. It also enables partners to build an on-demand workforce, create a skill database, and define the total billable hours.

Engineering industry

The increased demand in manufacturing has caused skill shortages in the core engineering industry, where competition is fierce for experienced workers (automobile engineers, machinists, designers, etc.). An engineering resource planning solution helps managers provide reskilling and on-the-job learning opportunities for the employees. Thus, it helps to replenish an aging workforce, fill critical positions, and match them to the best potential projects based on talents and interests.

Construction industry

Construction and infrastructure projects possess highly volatile resource demands due to changing climatic conditions and sudden increases in maintenance activities. With resource planning solutions, managers gain visibility of all construction resources and recruit skilled labor, architects, civil engineers, etc., throughout the projects. Thus, it maximizes the workforce’s productive utilization and ensures minimal resource conflicts. Therefore, efficient resource planning is key to managing construction resources effectively and preventing hiring/firing costs.

Consulting & professional service industry

The professional service industry has a unique challenge to balance resource demands across various clients. With efficient resource planning, managers can keep track of resources and their specialized skills. Since the consultants are deployed at a premium rate, keeping them engaged in client billable activities and reducing idle time for maximum profitability is crucial. At the same time, they need to be provided enough opportunities to acquire new skills and ensure no employee burnout.

Video game industry

The game development industry requires a highly competent team of niche-skilled resources. Efficient resource planning enables managers to diversify their expertise to the maximum potential and fulfill the gaming project resource demand. It also helps to identify in-demand skills and cross-train them to build an optimized workforce of game designers, level artists, programmers, QA teams, etc. Thus, effective resource planning can become a game-changer in fast-tracking the development cycle.

Now that we have learned about the benefits, let’s discuss the best practices for effective resource planning.

Best practices for effective resource planning

Enlisted below are some best practices to consider when engaging in resource planning:

Define clear project goals and objectives

Effective resource planning begins with clearly defining project goals, objectives, and deliverables. This step is crucial as it provides a solid foundation for determining the necessary resources and their allocation across multiple projects.

When the project scope is well-defined, it becomes easier to identify the skills, expertise, and types of resources required to achieve those objectives. In addition, clarity in project goals enables efficient resource planning from the outset, ensuring that resources are aligned with the project’s strategic direction.

Conduct a comprehensive resource assessment

Before scheduling and allocating resources, conducting a thorough assessment is important to determine the specific resource requirements. It involves identifying the types and quantity of resources needed, considering factors such as skills, expertise, availability, and capacity.

After assessing, managers can accurately gauge the resource demand for each project phase. This helps avoid scheduling conflicts such as staff shortages or double bookings, enabling optimal resource allocation and utilization throughout the project lifecycle.

Collaborate with stakeholders

Involving key stakeholders, such as project managers, team members, and department heads, in the resource planning process is crucial. That’s because collaborative discussions with stakeholders help understand project priorities, identify potential resource conflicts, and obtain valuable input.

Additionally, stakeholder involvement ensures that resource planning aligns with project goals and organizational objectives. Organizations can leverage stakeholders’ collective expertise and insights by fostering a collaborative approach, resulting in more informed resource-planning decisions.

Monitor and track resource utilization

Continuous monitoring and tracking of resource utilization throughout the project lifecycle are essential to facilitate effective resource planning. By regularly assessing resource allocation against actual utilization, project managers can identify potential bottlenecks, such as workload imbalances or under/overutilization of resources.

This monitoring process provides valuable insights into resource efficiency and enables timely adjustments. By having real-time visibility into resource utilization, supervisors can optimize resource assignment, ensure even work distribution, and mitigate risks associated with resource constraints.

Foster flexibility and adaptability

Resource planning should incorporate flexibility to accommodate changes that may arise during the different stages of the project. It’s essential to anticipate the need for resource adjustments and establish a process for reshuffling staff when necessary. This flexibility allows for agile resource planning, ensuring that resources can be allocated or reassigned based on evolving project requirements.

By fostering flexibility and adaptability, organizations can respond more effectively to unexpected changes or shifts in project priorities, resulting in improved project execution and better client satisfaction.

Organizations can optimize resource planning efforts and ensure successful project delivery by following these best practices. Now, let’s understand operational and strategic resource planning in project management.

Operational and strategic resource planning in project management

Planning implies thinking in advance about what we need to do to realize the business objectives. Strategic planning aims to attain long-term goals, while operational planning helps achieve the short-term objectives of an organization. Let’s understand in detail:

What is strategic resource planning?

Strategic planning is usually undertaken by top-level management to decide the future direction. It is not limited to projects within a particular department or unit but covers the entire organization. Strategic resource planning looks into the overall long-term resourcing strategy.

It can change drastically based on individual priorities. For example, If an IT firm plans to outsource a temporary requirement, i.e., the resourcing strategy will shift from FTE to contingent staff for IT infrastructure improvements. Similarly, a niche skilled resource’s out-rotation from an existing project to start a new initiative will come under strategic resource planning.

What is operational resource planning?

Operational planning addresses the day-to-day activities of a business. It also supports strategic planning to accomplish the overall organizational goals. First, we decide on the short-term objectives and then determine how to achieve them.

Operational resource planning includes regular business activities and operations as per organizational guidelines. For example, it covers pipeline project management, management of FTE and contingency resources, forecasting billable and total utilization, and more.

Factors that can influence operational and strategic resource planning

Strategic and operational resource planning parameters are linked with an organization’s mission, vision, strategies, goals, and objectives. In addition, the following can influence strategic and operational resource planning decisions.

• Staffing

It defines an organization’s hiring policy for full-time resources and directly influences decisions made on a resource plan. It also covers compensation and benefits, an essential consideration for regular employees.

• Hybrid delivery

The project team is created using a combination of in-house and vendor resources. An in-house workforce performs the critical positions requiring specific domain knowledge. One-time activities such as software development are accomplished using vendor resources.

• Outsourcing vs. in-sourcing

Due to globalization, many businesses outsource certain functions to other organizations. Some organizations also have stricter policies that their confidential data cannot leave the company’s boundary.

• Multi-locational policy

Due to the cost pressure, many projects are being executed from different locations. Therefore, project costs can be minimized using generic resources from a low-cost area. In addition, the high-skilled resources can be located based on their availability, who can take up leadership roles related to delivery.

• Training and development

Full-time resources must learn new skills for their self-development and compete in a dynamically changing environment. Therefore, it may not always be practical to hire new resources. However, a new skill can be acquired by cross-training an existing employee.

• Resource leveling and smoothing

The essential function of resource leveling is to optimize workforce allocation by adjusting the project schedule to resolve conflicts caused by resources’ over-allocation. On the other hand, resource smoothing optimizes distribution by adding new resources without affecting the critical path and timeline. Both of these techniques influence decisions toward a resource plan.

How to address market volatility using operational and strategic resource planning?

Effective resource planning is a critical success factor for an organization’s growth and sustainability. Unfortunately, the outbreak of the COVID-19 virus upset the world’s business model at the beginning of 2020.

Many organizations try to stay afloat in these volatile market conditions with a shrinking budget. Acute cost pressure and skill shortages have also become routine activities. Following strategies can help an organization sustain its profitability while planning for project resources.

Short-term strategy

• Effective capacity planning and identifying the gaps between capacity and demand
• Address the shortage of resources using a combination of FTE and contingent resources
• Either re-train existing employees or go for new hires depending on the requirements
• Identify new projects, adjust the project timelines, and sell services for excess capacity
• Mobilize employees from non-billable or low-priority work to billable or high-priority projects as a routine activity.
• Revisit our rotation/backfill policy for starting new projects with niche skills

Long-term strategy

• Decide non-critical functions that can be outsourced
• Identify at least two to three vendors who can work as strategic partners for outsourcing
• Decide on a multi-locational policy to take advantage of resources from low-cost location
• Adapt a hybrid delivery model for cost efficiency

This is how operational and strategic resource plan helps firms achieve their business goals. Listed below are some of the critical trends of resource planning in project management.

Emerging trends of resource planning in project management

Over the years, the project management landscape has undergone several changes due to technological advancements, management paradigms, etc. Therefore, organizations must embrace newer ways to manage projects successfully to keep pace with these changes. Listed below are some of the emerging trends of resource planning in project management:

Replace silos of spreadsheets with an enterprise resource plan

Silos of spreadsheets and home-grown tools are inadequate for efficient resource planning, adversely impacting business performance. Hence, companies are shifting towards enterprise-level software that centralizes resource-related information and maintains a single source of truth.

Taking resource scheduling to the next level

Today, resource scheduling is not just a simple process of allocating resources against projects. It has evolved into a full-fledged enterprise-level process that ensures maximum efficiency and utilization of resources.

Resource capacity planning for business efficiency

Resource capacity planning is not a luxury for businesses any more. It has become an essential part of the resource planner. It future-proofs your workforce against market volatility by analyzing the demand capacity gap and bridging it proactively.

Resource forecasting to maximize effective utilization

Billable and strategic utilization of the workforce is a crucial indicator of business profitability. Therefore, getting a real-time view of future utilization has become critical while planning for resources. Resource forecasting helps in taking proactive measures to improve future allocations.

Integrating resource management processes with other applications

Traditional resource plans include inefficient and time-consuming processes. Enterprise-level resource planner streamlines them using efficient workflows, alerts, and analytics. It also integrates effortlessly with multiple business applications to maintain a single source of truth across the enterprise.

Monitoring and controlling project resource cost

Enterprise-level resource planner offers various capabilities to monitor and effectively reduce project costs. Some of them are forecasting, capacity planning, resource modeling, pipeline management, bench management, etc.

These are some of the evolving trends of resource planning in project management.

Conclusion

An efficient resource plan fosters you to accomplish more in the same amount of time from the most valuable resources- the people.

Therefore, it is imperative to implement effective resource planning to utilize the workforce to its maximum potential. When resources are planned efficiently, it helps a business to manage risks, reduce delays, optimize resource utilization, etc.

Moreover, implementing the above-mentioned processes with the right resource management software will help you manage your resources intelligently and enhance profitability while maintaining a competitive edge.

Unlock Your Business’s Full Potential Through Strategic Resource Planning Today!

Glossary

SAVIOM Solution

SAVIOM is the market leader in offering the most powerful and configurable solution for managing your enterprise resources effectively and efficiently. With over 20 years of experience, this Australian-based MNC has created its global presence across 50 countries and helped more than 100 customers achieve their business goals. SAVIOM also has products for project portfolio management and professional service automation, and that is customizable as per business requirements.t is customizable as per business requirements.

These are the pertinent questions that stakeholders ask themselves on an everyday basis. To get the correct answers, we need resource planning in project management.

Without implementing the proper process and technique, making any decision will be like throwing darts in the air.

Resource planning can address these challenges in today’s dynamic business conditions. It helps plan resources intelligently from the ground up and continuously optimize your workforce.

This guide is curated for enterprises to gain a detailed understanding of resource planning in project management.

Let us define resource planning in project management:

1. What is resource planning in project management?

Resource planning in project management is the process of identifying and allocating the best-fit resources to the projects. It also ensures the effective and efficient utilization of the resources across the business. Effective resource planning involves forecasting future demand, assessing current resources, and developing strategies to optimize resource utilization and allocation.

Resource planning is the process of identifying and assessing available resources, forecasting future demand, and optimizing resource allocation to ensure that resources are utilized efficiently across the organization.

On the other hand, project resource planning is the process of identifying, organizing, and scheduling detailed tasks to complete a project successfully. While formulating a project plan, several parameters like delivery, budget, duration, tasks, project resources, milestones, and stakeholder reviews are considered.

Resource and Project planning are two sides of the same coin. Its synchronization is the key that determines a project’s success or failure. Resource planning in project management is usually carried out during the initiation phase. But the intensity or rigor slows down once the initial fulfillment goal is achieved in most cases. Nevertheless, it should be a regular activity throughout the life cycle as the resource requirements fluctuate due to continually changing project demands.

Once you know what resource planning is, let’s understand its importance in project management.

2. Importance of resource planning in project management

Achieving project goals within the given constraints is one of the significant challenges of project management. Project managers must manage their time between multiple projects, including their capacities, priorities, and skillset. A project resource plan plays a vital role in this project management process.

Here is how planning resources in project management can benefit organizations:

A. Reduce project resource costs significantly

Allocating the right resource to the right project ensures the timely delivery of the project within the budget. In addition, resource planning eliminates the deployment of over and under-skilled resources on project tasks. If resources are underqualified, a delay in project timelines is inevitable, and if overqualified, it can spike project costs.

According to the Deloitte Global Cost Survey 2020: “Reducing project resource cost takes precedence over other business initiatives.”

B. Forecast and improve profitable resource utilization

Resource planning and forecasting provide foresight into utilization within a project. A structured resource plan includes mobilizing resources from non-billable to strategic/billable projects for increased revenue. It also prevents under or overutilization of resources and helps improve employee satisfaction.

C. Facilitate efficient resource planning and allocation

Resource planning in project management identifies and assigns resources to project tasks based on skills, availability, cost, and other selection criteria. It also helps to allocate global resources from low-cost locations and control project costs. Strategic resources are not assigned to only high-priority projects and are instead uniformly distributed across all projects.

D. Foresee and plan pipeline project resource requirements

The resource planning process and forecasting help plan pipeline project workforce requirements. Capacity planning identifies the gap, and proactive measures are applied to bridge the difference. t helps reduce last-minute hiring activities, which can lead to cost escalation and compromise quality.

E. Ensure successful delivery using project resource planning

Planning resources properly ensures that all project resourcing requirements are identified and fulfilled. It is also revisited throughout the project life cycle as resource demand fluctuates occasionally. Moreover, it helps maintain continuity by preventing resource movements within projects unless it comes under strategic decision. These steps allow the timely delivery of projects within a specified budget.

PwC Project Management Insights states that “30% of Projects fail due to a lack of Resources.”

This is how to manage a project effectively with resource planning. Let’s look into some of the critical components of resource planning.

3. Essential components of resource planning template

A robust resource planning software will enable managers to effectively manage resources, mitigate risks, and drive projects to success. Here are some salient features of resource planning techniques and tools that aid project management.

A. Multi-dimensional resource planner

Resource planner allows you to allocate appropriate resources in real-time to the projects across the organization. It helps to decide the best-available-best- fit instead of the first-visible-first-fit resource. It also lets you view and track allocations across multiple dimensions such as team, department, location, etc.

B. Project pipeline planning

Planning and forecasting resource demand for potential projects in the sales pipeline is essential to avoid last-minute scuffles for competencies. Resource planner allows resourcing treatments such as training or hiring in advance and out rotation/backfill strategy for niche resources. It also lets you avoid wasteful hiring/firing cycles to ensure projects are successfully delivered.

C. Resource utilization forecasting

Forecasting techniques enable firms to optimize billable and strategic utilization. It allows mobilizing resources from non-billable to billable or strategic work. Resource planner helps to control project financials by comparing forecasted with actual utilization. It also detects and proactively mitigates under and over-resource utilization.

D. Resource capacity planning

Capacity planning analyzes the enterprise’s gap between resource capacity and project demand. It helps identify short and long-term excess or shortfalls and looks into multiple channels to effectively bridge the gap. Resource capacity planning facilitates proactive strategies such as adjusting project timelines, re-training employees, or hiring a contingent workforce.

E. Bench management

Resource planner allows early foresight of the workforce that will land on the bench to allocate them to suitable project vacancies. Bench management provides additional training or shadowing opportunities for the selected employees so that they can be made billable using the current opportunities.

F. Reporting using real-time business intelligence

Real-time business intelligence includes configurable dashboards and custom reports to fast-track decision-making in a rapidly changing business environment. Resource planning uses a combination of security rights, portal designs, and filters, allowing an end-user to view relevant information. Different stakeholders can get a granular view with a slice/dice of data.

G. What-if analysis for resource simulation

What-if analysis within a resource planner allows you to build and simulate different scenarios in a multi-project environment. It helps arrive at the best possible outcome within project constraints, such as impeding an existing project or extending its timeline. It also considers resource-related parameters before shuffling them between projects. After deriving the best scenario, it is applied to the actual project schedule.

These are the essential components in a typical resource planning template, which can help effectively plan your workforce. Below are some of the common mistakes of resource planning in project management.

4. Common mistakes of resource planning in project management

The project resource cost can blow out of proportion, and project delivery is significantly impacted without a proper resourcing strategy. This section describes some of the common mistakes made in this area.

A. Using silos of spreadsheets for resource planning

Despite its limitations, many organizations still use spreadsheets to plan their resources because they are easily accessible. While this software comes at a cost, it offers significant benefits over spreadsheets. Excel resource planner causes improper allocation, double booking, and creates additional work. t is very limiting and a nightmare to maintain.

Marketwatch points out that “88% of spreadsheets are prone to errors.”

B. Planning resources without overall visibility

Many managers continue to allocate resources without having complete visibility of their skills, competencies, and existing bookings. As a result, it becomes difficult to allocate the right resource to suitable projects at the right time. Restricted visibility also hinders identifying and leveraging quality resources from low-cost locations.

C. Lack of resource forecasting for pipeline projects

Resource planning for future projects is often taken up at the eleventh hour. The resource managers make the mistake of only taking up the planning activities when the deal is signed. Ideally, it should start after the opportunity reaches a certain probability of closure so there is sufficient lead time to address resource requirements. This results in last-minute activities that create an unbalanced pool as the quality of the resources are compromised.

D. Not maintaining the right mix of permanent and contingent workforce

Businesses try to fulfill project requirements using full-time employees as it is perceived to be a more cost-effective solution. However, if a niche resource is hired for a shorter duration, it becomes challenging to redeploy him after the assignment is complete. Therefore, a resource plan should maintain a judicious blend of permanent and contingent resources. For short-term assignments, a contingent workforce will be less expensive than hiring full-time resources.

E. Allocating under or over skilled resources to the projects

One of the common mistakes of resource planning in project management is assigning under or overqualified resources to tasks. When resources are under-skilled for the job, it causes project delays. On the other hand, over-skilled resources spike project costs. Not assigning tasks per skills and interests leads to decreased employee engagement and loss of productivity.

F. Unplanned hiring without analyzing project demands

Resource managers often resort to last-minute hiring activities to fulfill project resource requirements. This unplanned hiring compromises quality and leads to a large bench of mismatched skill sets. So, analyzing project demands with matching skill sets are prerequisite for informed hiring decisions.

Knowing the common mistakes of project resource planning, let’s understand the responsibilities of resource and project managers.

5. Responsibilities of project managers and resource managers

Project Managers operate on a project level with projects of different sizes and complexities. A Project manager can manage single or multiple projects and ensures they are completed within a stipulated time and budget. However, Resource Managers operate at the organizational level and oversee allocating resources to several projects.

The Project Manager initiates the resource request for an open position within his project, and the resource manager’s job is to fulfill the same. Once a resource is allocated to a project for a particular period, the resource manager’s responsibility ends. However, the Project Manager’s job only begins as they need to ensure that the resource carries out the delivery responsibilities.

A. Role of resource manager

In summary, a resource manager is responsible for the following:

• Planning and allocation based on resource skills, previous experience, and availability.
• Conducts capacity planning to address issues of shortfall and excesses of resources.
• Support project managers with the project resource management plan and related activities.
• Address resource concerns by reallocating resources, negotiating, or assigning additional staff.
• Collate new project requirements from the business and provide them to the hiring team.
• Certain limited HR-related functions.
• Collaboration with other departments, e.g., HR, PMO, Sales, Learning & Development.
• Generating reports and analytics for senior management.

B. Role of a project manager

The corresponding roles of a project manager are:

• Create a project management plan and define the scope and delivery objectives of the project.
• Capture resource requirements and request for fulfillment.
• Streamline communications with stakeholders/ team members and customers.
• Carry out operational reviews as per project KPIs.
• Estimate time and cost and monitor the budget.
• Report the progress of the project; analyze any potential risks and provide mitigation strategy.
• Document the project and set the expectation for various team members.
• Work with the empaneled vendors for contingent resources.

These are some of the significant responsibilities of resource and project managers. Below listed are ways to plan resources within different project management methodologies.

6. Resource planning within different project management methodologies

A methodology is a set of guidelines and processes for managing a project. A project manager chooses a procedure depending on their team, project type, and scope. Here we discuss some commonly used project management methodologies and their suitable resource planning techniques.

A. Agile

In this approach, there is no top-heavy requirements-gathering. It is a collaborative process to deliver small incremental changes iteratively. Since some requirements can suddenly change, the project management resource plan needs to address the frequent shuffling of resources across different projects.

B. Scrum

It enables a small, cross-functional, and self-enabling team to take charge of the delivery. Similar to Agile, the resources need to be flexible and multi-skilled within a small team size. In this dynamic project environment, the resource plan needs to ensure that allocation is not done only based on primary skills.

C. PMBOK

Project Management Body of Knowledge (PMBOK) defines the processes, best practices, terminologies, and guidelines accepted in the industry. PMBOK addresses different project situations and has documented several best practices with use cases. The PMBOK resource management needs to be carried out based on the specific project situation.

D. Prince2

Prince2 is a process-oriented methodology that divides projects into multiple stages, each with its plans and processes. The method defines inputs and outputs for every project phase so that nothing is left to chance. Resource planning, in this case, focuses on meeting workforce requirements for every phase of the project. Accordingly, managers can identify the right skills, competencies, and certifications for specific stages.

E. Waterfall

In this case, the projects are thoroughly planned in the beginning and then executed in phases. It is assumed that there will be minimal changes during the execution. So, most of the resource planning activities are done based on the project’s initiation phase. Accordingly, resources are allocated before the stage starts.

F. Kanban

Kanban focuses on early releases with collaborative and self-managing teams. It uses a visual workflow tool to detect a bottleneck in the development process. It is suited for projects with a smaller team, which depends on individual members. The resource plan must be able to provide the right resource matching the project requirements. The primary skill or competency is most important in resource selection.

G. Lean

Lean methodology maximizes customer value while minimizing waste. It promotes the concept of delivering more with fewer resources. Resource plan helps streamline billable and strategic utilization within the project and effectively manages the overall capacity. It ensures that the existing capacity is fully exhausted before new resources are inducted into a project.

H. Six-Sigma

This methodology improves quality by reducing the number of errors through proper analysis and removing it from the process. The resource plan needs to provide the subject matter experts in the specific area with certifications such as Six Sigma Black belts. The resources are typically multi-skilled, and the resource selection includes one primary skill and several secondary skills.

This is how resource planning techniques can be applied to project management methods. Now, let’s understand operational and strategic resource planning in project management.

7. Operational and strategic resource planning in project management

A. What is operational and strategic resource planning?

Planning implies thinking in advance about what we need to do to realize the business objectives. Strategic Planning aims to attain long-term goals, while operational planning helps achieve the short-term objectives of an organization.

Strategic Planning is a process usually undertaken by top-level management to decide the future direction. It is not limited to projects within a particular department or unit but covers the entire organization. Strategic resource planning looks into the overall long-term resourcing strategy.

It can change drastically based on individual priorities. Let’s take an IT project resource planning example. If an IT firm is planning on outsourcing a temporary requirement, i.e.., The resourcing strategy will shift from FTE to contingent staff for IT infrastructure improvements. Similarly, a niche skilled resource’s out-rotation from an existing project to start a new initiative will come under strategic resource planning.

Operational Planning addresses the day-to-day activities of a business. It also supports strategic planning to accomplish the overall organizational goals. First, we decide on the short-term objectives and then determine how to achieve them.

Operational Resource planning includes regular business activities and operations as per organizational guidelines. For example, it covers pipeline project management, management of FTE and contingency resources, forecasting billable and total utilization, and more.

B. Factors that can influence operational and strategic resource planning

Parameters for strategic and operational resource planning are linked with an organization’s mission, vision, strategies, goals, and objectives. In addition, the following can influence strategic and operational resource planning decisions.

• Staffing

It defines an organization’s hiring policy for full-time resources and directly influences decisions made on a resource plan. It also covers compensation and benefits, an essential consideration for regular employees.

• Hybrid delivery

The project team is created using a combination of in-house and vendor resources. The critical positions which require specific domain knowledge are performed by full-time in-house staff. One-time activities such as software development are accomplished using vendor resources.

• Outsourcing vs. in-sourcing

Due to globalization, many businesses outsource certain functions to other organizations. Some organizations also have stricter policies that their confidential data cannot leave the company’s boundary.

• Multi-locational policy

Due to the cost pressure, many projects are now getting executed from different locations. Therefore, project costs can be minimized using generic resources from a low-cost area. In addition, the high-skilled resources can be located based on their availability, who can take up leadership roles related to delivery.

• Training and development

Full-time resources must learn new skills for their self-development and compete in a dynamically changing environment. Therefore, it may not always be practical to hire new resources. However, a new skill can be acquired by cross-training an existing employee.

• Resource leveling and smoothing

The essential function of resource leveling is to optimize workforce allocation by adjusting the project schedule to resolve conflicts caused by resources’ over-allocation. On the other hand, resource smoothing optimizes distribution by adding new resources without affecting the critical path and timeline. Both of these techniques influence decisions toward a resource plan.

C. How to address market volatility using operational and strategic resource planning

Effective resource planning is a critical success factor for an organization’s growth and sustainability. Unfortunately, the outbreak of the COVID-19 virus upset the world’s business model at the beginning of 2020.

Many organizations try to stay afloat in these volatile market conditions with a shrinking budget. Acute cost pressure and skill shortages have also become routine activities. Following strategies can help an organization sustain its profitability while planning for project resources.

Short-term strategy

• Effective Capacity Planning and identifying the Gaps between Capacity and Demand
• Address the shortage of resources using a combination of FTE and contingent resources
• Either re-train existing employees or go for new hires depending on the requirements
• Identify new projects, adjust the project timelines, and sell services for excess capacity
• Mobilize employees from non-billable or low-priority work to billable or high-priority projects as a routine activity.
• Revisit our rotation/backfill policy for starting new projects with niche skills

Long-term strategy

• Decide non-critical functions that can be outsourced
• Identify at least two to three vendors who can work as strategic partners for outsourcing
• Decide on a multi-locational policy to take advantage of resources from low-cost location
• Adapt a hybrid delivery model for cost efficiency

This is how operational and strategic resource plan helps firms achieve their business goals. Listed below are some of the critical trends of resource planning in project management.

8. Emerging trends of resource planning in project management

Over the years, the project management landscape has undergone several changes due to technological advancements, management paradigms, etc. Therefore, to keep pace with these changes, organizations must embrace newer ways to manage projects successfully. Listed below are some of the emerging trends of resource planning in project management:

A. Replace silos of spreadsheets with an enterprise resource plan

Silos of spreadsheets and home-grown tools are inadequate for efficient resource planning, adversely impacting business performance. Hence, companies are shifting towards enterprise-level software that centralizes resource-related information and maintains a single source of truth.

B. Taking resource scheduling to the next level

Today, resource scheduling is not just a simple process of allocating resources against projects. It has evolved into a full-fledged enterprise-level process that ensures maximum efficiency and utilization of resources.

C. Resource capacity planning for business efficiency

Resource capacity planning is not a luxury for businesses anymore. It has become an essential part of the resource planner. t future proofs your workforce against market volatility by analyzing the demand capacity gap and bridging them proactively.

D. Resource forecasting to maximize effective utilization

Billable and strategic utilization of the workforce is a crucial indicator of business profitability. Therefore, getting a real-time view of future utilization has become critical while planning for resources. Resource forecasting helps in taking proactive measures to improve future allocations.

E. Integrating resource management processes with other applications

Traditional resource plans include inefficient and time-consuming processes. Enterprise-level resource planner streamlines them using efficient workflows, alerts, and analytics. It also integrates effortlessly with multiple business applications to maintain a single source of truth across the enterprise.

F. Monitoring and controlling project resource cost

Enterprise-level resource planner offers various capabilities to monitor and effectively reduce overall project costs. Some of them are forecasting, capacity planning, resource modeling, pipeline management, bench management, etc.

These are some of the evolving trends of resource planning in project management.

9. Conclusion

Resources being a critical and costly investment, organizations must implement effective resource planning and utilize the workforce to their maximum potential. When resources are planned efficiently, it helps a business to manage risks, reduce delays, optimize resource utilization, etc. In addition, it helps deliver projects successfully within the stipulated time and budget. This exhaustive guide explains all the essential things about resource planning n project management. Furthermore, implementing robust resource management software will help organizations to achieve their business objectives and improve their profitability.

10. Glossary

11. SAVIOM Solution

SAVIOM is the market leader in offering the most powerful and configurable solution for managing your enterprise resources effectively and efficiently. With over 20 years of experience, this Australian-based MNC has created its global presence across 50 countries and helped more than 100 customers achieve their business goals. SAVIOM also has products for project portfolio management, professional service automation, and that is customizable as per business requirements.t is customizable as per business requirements.

The above growth is attributed to several macroeconomic factors, such as the increasing complexity of tax regulations, globalization, increased financial frauds and risk awareness, etc. Therefore, there is a growing demand for audit and accounting services as companies worldwide strive to protect their profit margins and stay ahead of the competition.

However, audit & accounting firms face numerous resourcing challenges, such as skill gaps, inability to meet seasonal demands, unplanned attrition, etc. That’s why effective resource planning is the need of the hour to future-proof and optimize the audit and accounting workforce.

This blog discusses the various steps you can implement to create an efficient resource planning in audit and accounting firms.

But first, let’s understand the benefits.

Significance of resource planning in the audit and accounting sector

Resources are the crux of audit and accounting service firms since they generate revenue by charging their clients for the consultants’ expertise and time. Therefore, firms need an efficient resource plan to maximize the billable utilization of their skilled personnel and improve profitability.

Since this sector experiences seasonal fluctuations, resource planning enables firms to meet the sudden rise and fall in demand by comparing the project requirements against capacity. Additionally, it helps bridge the skill gaps in advance, ensuring consultants’ availability before the project’s onset, thus eliminating last-minute firefighting.

In addition, efficient resource planning helps managers create the right mix of permanent and contingent audit and accounting personnel. For example, an upcoming assignment requires a forensic auditor to evaluate a firm’s financial records and collect evidence for legal proceedings. With efficient resource planning, managers can easily deploy a contingent forensic auditor depending on the duration of the assignment, minimizing project resourcing costs.

Overall, resource planning is critical for audit and accounting firms to identify and allocate competent personnel to projects at the right time and cost and deliver high-quality services to clients. In addition, it helps firms to stay competitive in a rapidly changing market and adapt to new challenges and opportunities.

Given the significance of resource planning in the accounting and auditing industry, the following are the best strategies to make it efficient.

Best practices to implement a resource plan in audit and accounting firms

Robust resource planning is the backbone of every project since it redefines business efficiency and helps unlock the workforce’s full potential.

Here’s how you can implement an effective resource plan.

Forecast and bridge capacity gaps of consultants for pipeline assignments

Most accounting/audit projects have a shorter timeline, and usually, practitioners work on multiple projects simultaneously. Therefore, consulting managers in audit and accounting firms must plan the pipeline assignments by analyzing the resource requirements. They must also implement suitable measures proactively to bridge the capacity vs. demand gap.

For example, a pipeline audit assignment needs five auditors to complete the tasks successfully. If the manager has ten available auditors, they can bring forward other projects for the extra five auditors or sell their capacity at a discounted rate. Alternatively, if they only have three auditors, a shortfall of two employees can be resolved with internal channels like implementing out rotation and backfill strategy or training/upskilling. If needed, managers can also request HR to initiate project-specific or skill-based hiring to avoid last-minute firefighting.

Identify and allocate cost-effective audit/accounting personnel to projects

Since the accounting sector often utilizes high-cost specialized resources such as actuaries and tax analysts, it is significant to consider the overall resourcing budget while planning to protect the profit margins. In addition, resource planning enables firms to identify cost-effective auditors/accountants with skills matching project requirements once they receive a resource request.

For example- instead of assigning a senior advisory lead to evaluate business transactions, managers can identify and allocate a skilled junior counterpart for the same. It will significantly reduce the resourcing cost, ensuring successful project delivery within the budget. In addition, they should have a sufficient lead time for carrying out planned hiring activities and create an optimum resource mix preventing budget overruns.

Create the right mix of permanent and contingent audit/accounting staff

The demands for specific skills, such as tax advisory, consultants, etc., witness a surge during the financial year-end. Based on the project nature, firms can form a blended workforce to meet these sudden peaks. During this period, contingent workforce can provide additional support to permanent resources or offer specialized services, allowing firms to fulfill client demands more effectively.

For example, an auditing/accounting firm bags a short-term project on filing client’s tax returns and forms. Here, the managers can allocate a freelancer tax analyst and complete the project within the budget. On the other hand, firms can recruit full-time employees for long-term projects, such as the annual auditing for an insurance company for the next 7 years. This will enable organizations to achieve their goals by keeping costs in check, boosting profitability and sustainability.

Set utilization targets for accounting consultants and track them periodically

As mentioned above, audit and accounting firms usually depend on external and internal resources for project delivery. However, if the utilization targets for the accounting employees are not well-defined, it creates operational inefficiencies and low productivity. Therefore, firms need to set utilization targets for permanent and contingent staff to ensure maximum billability.

For instance, the utilization target of permanent consultants can be set around 70 – 80 % of their capacity so that they can be involved in billable and other important non-billable tasks. On the contrary, an on-demand resource’s utilization rate can be set close to 100% because they are usually hired to perform a specialized function for the short term. These measures ensure that both internal and on-demand audit and accounting staff are optimally utilized. In addition, managers should track their utilization levels periodically and implement measures to prevent under/over-utilization.

Implement training and upskilling programs on a regular basis

The rapid emergence of technologies, such as AI, ML, Blockchain, etc., has made it mandatory for accounts/auditors to stay abreast with the latest skills and technology.

A survey reveals that “57% of accountants find technology literacy the most critical additional skill for future employees in this field.”

For this, accounting managers can formulate several training/upskilling programs, IDPs, etc., to align the workforce’s skills with the latest trends. For instance, CAs can be trained in data analytics, which will help them generate financial reports quickly and accurately using multiple data like revenue, expenses, and account budgets.

They can also implement other learning methods, such as peer-to-peer coaching, job shadowing, etc., for the audit and accounting staff. It will prepare them to take up multi-faceted projects in the future and diversify their portfolios. Further, these initiatives will help bridge existing skill gaps, and improve performance, enabling the firms to stay relevant in the digital age.

Facilitate succession planning for critical consultants.

Research reveals- 94 percent of employers report that succession plan has a positive impact on their employees’ engagement.

If critical resources, such as senior auditors, accounts officers, partners, etc., suddenly retire or resign, the projects can derail in the absence of succession planning. It, in turn, can cause revenue losses and negatively impact client experiences for accounting service organizations. To avert this situation, firms can leverage effective resource planning to review key accounting/auditing roles and resources.

Consulting managers can also track the performance of every consultant to identify the ones to be considered for promotion to senior/strategic positions. Moreover, they can also upskill and train the audit and accounting staff to take up higher roles. In addition, it enhances the level of engagement of audit and accounting personnel since they are more focused and eager to take on critical responsibilities. This way, effective succession planning ensures smooth role transition and business continuation.

Empower auditors/accountants to choose the project of their interest

A study reveals- “1 in 3 professionals reveal that boredom is the primary reason to leave their jobs.”

The above stats hold true for the audit and accounting sectors as well. Most accounting professionals work on similar projects that become monotonous over time, affecting their engagement and productivity. To avoid this, managers can give employees the choice to work on assignments matching their interests by publishing open positions with relevant project details periodically.

This would enable audit and accounting employees to show interest and apply for suitable open positions. Managers can then choose the best-fit consultants for the projects. By working on the projects of their interest, professionals will be more motivated, enhancing their performance. Furthermore, it will increase autonomy and help with their career trajectory, resulting in improved retention.

Now that the strategies are understood, let’s know how an advanced resource management solution will help streamline the resource planning process.

How can a modern ERM tool streamline resource planning in audit and accounting firms?

Advanced resource management software provides efficient resource planning capabilities that help audit and accounting firms utilize their resources optimally.

Here’s how-

• It offers 360-degree visibility into audit and accounting projects/non-project activities such as BAU/admin, leaves, etc. Besides, the software helps maintain up-to-date competency and skill information that facilitates the competent allocation of consultants.
• The multidimensional sorting feature, along with advanced filters, helps managers uniformly distribute the employees according to the work requirements.
• Moreover, the forecast vs. actual and utilization reports helps accounting supervisors implement corrective measures and eliminate under/over utilization. It also helps them mobilize skilled accountants from non-billable or admin/BAU work to billable or high-priority projects.
• The modeling and simulation technique enables accounting managers to create and compare various project scenarios and determine the best-fit resource plan.
• The accounting/audit managers can use the open seat feature of the tool to publish various open positions. It will empower auditors/accountants to choose projects of their interest, thus improving engagement and productivity.
• Further, the tool’s collaboration feature helps managers share the lesson-learned reports after completing the project. This report can be referred to by others while working on similar audit/accounting projects and improve resource planning and cost estimations.

This way, modern resource management software can help streamline resource planning in audit and accounting firms.

The Bottom Line

“Planning is bringing the future into the present so that you can do something about it now.” ― Alan Lakein, author

Rightly said, it is essential for audit and accounting firms to create an effective resource plan. It will help unleash the maximum potential of resources and increase their productivity and engagement. However, it is only possible when organizations use robust ERM software to identify and mitigate bottlenecks early. It will help optimize and futureproof the audit & accounting workforce against market volatility, ensuring profitability and sustainability.

So, what’s your strategy to streamline your firm’s resource planning?

The SAVIOM Solution

SAVIOM is the market leader in offering the most powerful and configurable solution for managing your enterprise resources effectively and efficiently. With over 20 years of experience, this Australian-based MNC has created its global presence across 50 countries and helped more than 100 customers achieve their business goals. SAVIOM also has highly customizable products for project portfolio management, professional service automation, and workforce planning software based on business requirements.

However, with the evolution of technology and business processes, resource planning became complex and included other components such as forecasting and capacity planning, optimization, and more.

Since traditional excel sheets are not designed to handle these complexities, businesses started adopting dedicated resource management software for this resource planning.

Moreover, excel sheets create silos of data, are error-prone, and have several limitations that can lead to double-data entry, internal conflicts, etc.

This article highlights drawbacks of using spreadsheets for resource planning and explains the need for futuristic resource management software.

Let’s begin with understanding the evolution of resource planning.

How resource planning has evolved with time?

As mentioned in the previous sections, organizations followed a traditional hierarchical structure, and resource planning was only limited to basic allocation and scheduling. Moreover, since departments were siloed, using spreadsheets met their business requirements.

Over time, the advent of globalization allowed businesses to onboard resources from different geographical boundaries. Since excel could not provide real-time visibility of enterprise-wide resource schedules, organizations started adopting basic scheduling solutions using complex home-grown tools.

Globalization also led to a hyper-competitive business landscape, skills shortage, etc., which eventually gave rise to matrix organizations. When resources were shared across departments and simultaneously worked on multiple projects, it became challenging to allocate them, resulting in double bookings and internal conflicts. As a result, it was not viable to use Excel sheets or even basic tools for this purpose.

To ensure efficiency and profitability, businesses started realizing the need for a comprehensive resource planning solution that will not only help in competent allocation, but also provide real-time analytics to make informed decisions.

Now that we know how resource planning has changed with time, let’s look at the problems organizations face while using Excel.

Drawbacks of using Excel for resouresource planning

Many organizations have adopted Excel for resourcing planning because it’s cost-effective, readily available, and managers are familiar with it. While Excel offers many benefits to users, it also has some drawbacks.

The most prominent ones are discussed below

Spreadsheets are easy to develop but difficult to maintain

Most organizations use spreadsheets at the beginning to meet the initial business requirements and consolidate the data. However, as the organization scales up and hires more resources, it becomes challenging to handle and update a large amount of data on a regular basis. Moreover, resource managers can create in-bult macros which are easy to develop but difficult to maintain.

Inability to provide real-time data for decision making

Resource planning is a data-driven process and hence demands accurate information in a timely manner. In the absence of centralized visibility of resource-centric information, one cannot take the right decision. Resource managers can use multiple spreadsheets in silos which causes data inconsistency. The information cannot be synchronized in real-time, leading to double booking and other related conflicts.

It does not offer advanced forecasting and capacity planning

Resource forecasting is crucial when forming a resource plan as it helps managers bridge the capacity vs. demand gap ahead of the curve. Excel sheets, however, do not comprise this advanced feature. As a result, businesses do not get valuable foresight into the projects, leading to various bottlenecks such as last-minute firefighting, increased hiring/firing cycles, etc.

Spreadsheets do not offer centralized or multidimensional views

Organizations following a matrixed structure need to view data on a unified platform to make informed decisions as per an individual’s job function. Since excel sheets are updated manually and in silos by respective departments, it’s not possible to get a centralized view of the workforce. Moreover, managers do not have the liberty to view the information multi-dimensionally or from different angles, which can lead to delayed decision-making.

Absence of role-based security access

Security and access controls are essential to prevent information overload and data breaches. However, spreadsheets do not offer role-based access, and sensitive information is accessible to everyone in the workplace, causing information overload.

Cannot reconcile data between multiple spreadsheets

The Excel sheet does not have the capability of integrating large volumes of data across multiple spreadsheets. If someone does this manually, it will be time-consuming and subject to many errors leading to inadequate decision-making and inefficiency.

Excel sheets are susceptible to human error

According to research, 35% of users said data errors are common in the most crucial spreadsheets they use at work.

In spreadsheets, employees manually enter and modify all types of data, making it prone to human error. Something as simple as one wrong formula, number, or formatting can cause large misinterpretations and lead to skewed or incorrect data. For example- An error while adding billable hours of work can lead to incorrect billing and invoicing.

Subject to these drawbacks or limitations, it is about time businesses look at an alternative solution to streamline resource planning.

How enterprise resource management software is the best alternative to an excel spreadsheet?

Resource management software is the best alternative to excel sheets as it offers all the necessary advanced features required resource planning on one platform.

The following section explains the salient features-

Easily configurable and scalable

The enterprise resource management software architecture is highly configurable and scalable, which helps businesses meet their current as well as future needs. The high configurability allows them to customize their tool based on their structure and work processes. They have the liberty to pick their sorting dimensions or reports and function seamlessly.

Additionally, as and when business grows, the software’s scalability allows users to multiply data hassle-free. For instance, if the workforce grows from 100 to 1000 employees, requiring multiple resource managers, you can add them to the database and buy more licenses for the managers.

Enables data-driven decision-making using real-time BI reports

As mentioned earlier, resource planning is a data-driven process. Hence, to initiate hiring or upskilling or allocate resources and meet the project demand, it requires visibility into capacity vs. demand, resource utilization, availability, etc.

The resource management software comes with an integrated Business intelligence tool that provides real-time reports on various resource metrics. As a result, it helps managers make data-driven decisions. For example- Managers can procure reports of different metrics such as utilization and availability to prevent over or under-utilization of the workforce.

Helps forecast and forward plan pipeline projects

As we have mentioned, excel sheets do not offer foresight into project pipeline demands, which can lead to last-minute firefighting of resources, unnecessary hiring/firing, cost escalation, project delays, etc. However, using a resource management tool will help you foresee the pipeline project demand.

Further, resource managers can use the capacity vs. demand report to identify shortage or excess of resources ahead of time. As a result, they can implement appropriate resourcing treatments like- hiring or upskilling, bringing forward project timelines, etc., and accomplish projects without compromising quality.

Facilitates drag-drop capability for seamless resource scheduling

The resource management software’s multidimensional scheduler comes with an easy drag and drop capability. Using this feature, managers can schedule tasks seamlessly, book bulk resources, implement changes, etc. Further, in case there is overloading, the resource management software gives you an early warning, and thus, managers can easily split the task between resources to prevent employee burnout.

Additionally, the drag-and-drop capability of the tool helps to implement changes instantly, which allows everyone to see the updates in real-time and plan work accordingly. Moreover, drag and drop is ideal for agile scheduling, and it meets dynamically changing demands seamlessly.

Provides multi-dimensional 360-degree visibility

The resource management software provides a bird’s-eye view of the resources’ skills sets, experience, capacity, availability, current and future schedules, and other resource metrics on a single platform. This helps managers allocate the right resource to the right task based on the skill set required.

Further, the tool provides a multi-dimensional view of the data. As a result, Managers can view information from different angles. For example- a department manager can view the projects and progress of their department, whereas a project manager can view the progress of the project and their team. This prevents information overload by providing the right information to the right people.

Ensures role-based access to avoid information overload

Role-based access control (RBAC) restricts network access based on a person’s role within an organization and has become one of the primary methods to ensure security. This access can be based on several factors, such as authority, responsibility, and job competency.

The resource management software provides role-based access that lets you control data visibility with a combination of security rights, portal designs, and filters. It helps end-users of the system see relevant information as per their role and prevent information overload.

Apply simulation technique to form the best-fit resource plan

Simulation and Modeling technique allows managers to build and compare different outcomes by changing one or more constraints without really modifying the actual plan. This facilitates managers to make informed decisions and form the right plan.

Similarly, the resource management software enables the managers to create numerous scenarios using this technique. It helps the managers form the right resource plan, ensure a healthy resource index, and avoid any resourcing bottlenecks down the line.

The bottom line

It’s evident that Excel has its place in the world. However, when it comes to managing your resources intelligently, Excel is not the right choice as it does not entail any advanced features that help form an accurate resource plan and ensure successful project delivery. Therefore, it’s time businesses adopt dedicated resource management software to unleash the maximum potential of the workforce.

So, are you ready for efficient resource planning in your workplace?

The Glossary

The SAVIOM Solution

SAVIOM is the market leader in offering the most powerful and configurable solutions for managing enterprise resources efficiently and effectively. Having more than 20 years of experience, this Australian-based MNC has a global presence in over 50 countries. It is also popular with more than 100 customers and helps them achieve their business goals. SAVIOM also has products for project portfolio management, professional service automation, and workforce planning software which can be easily customized as per business requirements.

This has all obviously changed drastically over the last 15 years with working from home now a more prevalent practice, thanks to the advances in technology and internet speeds.

While certain businesses have made that leap, others still have concerns holding them back from enabling their workforce to go remote. Interestingly, Saviom was one of those companies, preferring direct in-person team engagement over any form of remote working. With the lockdown brought on by the COVID-19 outbreak, however, we saw the need for more flexible working environments and (luckily) geared the organization beforehand.

I am happy to report that WFH has been a net positive outcome for Saviom with measures of work visibility, staff productivity, and utilization either maintaining or improving over these last few weeks. In my view, the potential of organizational remote working will be one of the major silver linings from this current crisis and it will permanently transform the way we do business.

For my second post in this series (first post here), I’m going to focus on the concerns that these leaders have, ways to overcome such challenges and the tools that you should be equipped with to get the most out of this WFH setup. Enjoy!

 Work From Home Concerns for Business Leaders

1. Lack of Real-Time Work Visibility

It’s often difficult for managers to clearly know what’s being worked on when in the office let alone when staff are working from home. Sending out continuous reminders or emails asking what everyone is working on can often feel intrusive and uncomfortable.

The idea of having everyone present physically is more reassuring to organizations wishing to have immediate visibility into work execution. Managers can then ascertain if everything planned is on track for completion.

2. Maintaining Productivity

An employee may be working exceptionally hard from home, even to the point where they are more productive than they would be in the office. But in the absence of the immediate visibility of the amount of work being produced, it is challenging to judge overall productivity. In response, it’s easy for companies to become anxious about a drop in business output. After all, can the same excellent performance be said of every employee at all times?

3. Fear of Lower Resource Utilization

In most businesses, there is no efficient system in place to estimate the workload and or even the completion time of a project. This makes it impossible to measure and forecast the effective utilization of resources. Not to mention channel the energy of the resources in the right direction.

This is yet another valid reason why businesses have concerns about a work from home practice, especially as said resources are now spread far and wide as opposed to contained in the office.

How To Overcome Work Visibility, Productivity & Utilization Challenges

1. Create Absolute Visibilities into Resource and Work

The best way to figure out task allocations is to lay out all the pieces of the puzzle. It starts with understanding what ‘work’ really means here. It refers to the time spent on the project as well as non-project activities (i.e BAU, administrative tasks, support, and training) i.e areas that usually run in the background unchecked. A high-level view of both work categories gives you a rough idea of the output to expect.

Next, see what that work breakdown with your staff is looking like. Are your resources spending more time on nonbillable work that can be scaled back? Can they be shifted to project hours instead? Having an overview of both staff and their high-level work allocations off the bat avoids needing to check-in constantly and for you as a manager to reallocate your work.

2. Forecasting and Monitor Effective Resource Utilization

When it comes to forecasting, as the saying goes “a stitch in time saves nine”. The same is true for any business as you need to be able to nip any potential issues in the bud before they become a problem. With the help of a centralized resource plan, you can forecast the utilization of each and every person across your company.

By using resource planning software, management can closely monitor the effective utilization of employees and take any necessary action ahead of time.

3. Establish Nitty Gritty Task Allocation And Monitor Productivity

For day to day tracking of regular and ad hoc work, it’s important to establish a centralized system whereby every type of task can be allocated and monitored without creating unnecessary administrative overheads.

It’s important to be able to manage high-priority tasks as well as the nitty-gritty ones which, although often small, can become a huge challenge if not taken care of swiftly. When you’re working from home, it couldn’t be more important to keep track of everything.

4. Bring Remote Teams Closer To Collaborate

Overcommunication is key to remote collaboration and keeps work and non-work related discussions separate. Saviom, for instance, uses a combination of Skype, emails, and Samepage to loop in its members for important events. This way, no one ever misses an update or lets a time-sensitive dependency drag on.

What type of tools ensure staff productivity and utilization?

1. Resource Management Software

While team collaboration tools are perfect to ensure people are clearly communicating, you will require a resource management (RM) software that gives you a broader picture in terms of work visibility and team utilization levels. RM tools are built to tell you the work staff are working remotely with exact numbers on how well they are being utilized.

Tools, like Saviom, are built specifically for such scenarios as well as future-proofing capabilities such as forecasting excess or shortage of staff based on incoming work and reports to help maximize billable and strategic utilization.

2. Project & Work Management Software

Project and work management software is designed to organize various types of planned or unplanned tasks. Managers will then assign these tasks to the relevant team members. Employees will then complete these tasks and update the progress status. They can also record how much time has been spent on each task. This helps the management to have real-time tracking of workload and productivity of employees.

More on Saviom’s Resource and Project Planning Software

If you are looking to overcome the challenges of work visibility, productivity, and utilization that arise from your employees working from home, then it’s time to bring Saviom on board to make this happen.

Our resource planning and project planning solutions have an impressive track record of helping companies across the globe to increase their workforce efficiency. What’s more, you can gain real-time insights on even the most time-sensitive projects. Whether your team is based in the office or working remotely you can ensure tasks are delegated and productivity remains consistent.

Throughout the challenges of COVID-19 and beyond, Saviom is here to support your business operations.

To find out more, contact us today. You can even try it for free to see how Saviom’s workforce planning software can work for your business.