What is Capacity Planning and How often should we do it?

Capacity Planning is an activity to decide and find out what is your capacity to meet the demand of time. Though it is an easy job for humans capacity planning software makes it all the better.

Let us understand it with an example. You plan a vacation, that too, a road trip, and choose either to drive the vehicle yourself or hire a rental car. In both cases, the fun will remain the same but you would relax more if you book a taxi to take you around. True? This shows your capacity to afford the trip. Booking a cab attracts extra expense and that varies according to your capacity. Mostly you will spend according to the cost you can absorb but will keep your expectations too in mind. Isn’t that?

Similarly, in an organization, you take and fight to fetch projects only after realizing the team you have, in short, your capacity. You know what is the talent of the team and what more should they be trained for? The idea is to plan, execute, and manage every work depending on the workforce.

What is Capacity Planning?

Capacity planning is the process to find out how many resources do you need overall in the company to complete all the tasks. You need to check whether you have enough staff that will help you sail through to finish not just one but different tasks. It runs with a thought process and planning to understand how a particular project should be executed.

But why should you do it?

Capacity Planning helps you to identify the need to scale-up, identify flaws, create alternate plans, and reduce risks within a proper period. The idea is to face the brunt of any situation which can affect your business earnings.

The planning capacity goes at the organization level and not at the project levels. The client’s demands may vary and you must have the ability to fulfill those. To begin with the process, the magnitude of the demand is set.

In an organization, the expected resource utilization in the future is established in comparison to that of the available ones.

How can you start with Resource Capacity Planning?

To start with the resource capacity planning, you must do these:

  • Keep all the project portfolios and the ongoing projects in mind.
  • Forecast the utilization of resources for a project portfolio for a particular time frame, maybe, monthly.
  • The standard work time that is needed for that particular role.

When you have this information, you will be able to analyze:

  • Whether you can accept the new projects or not?
  • When is the right time to accept the new projects?
  • The capacity of the company or the availability of resources to complete the project.

When you know that you have a shortage of resources, you can immediately take action by hiring or training the talent pool. If your staff is ready, it will inform you whether the new projects can be completed within the stipulated time or not. You cannot go overboard to load a particular employee for a project. Hence, with capacity planning, you would be able to make decisions on :

  • Adding more resources.
  • Reduce the scope of the projects.
  • Extend the duration of the project.
  • Reduce the work of existing employees to complete the important tasks first.

How do you calculate Resource Capacity in an organization?

To analyze the total resource capacity of your organization, you can find out the total number of standard hours any individual in your company can work as defined by the employer. A resource capacity for an organization is measure by timelines and includes:

  • Permanent Employees and Contractors.
  • Part-time and full-time employees.
  • Employees that are hired and would join on a particular date.
  • Employees that would leave the business on a particular date.

By evaluating a total of all the efforts, you can find out how much work you can accept. Apart from this, you will have to calculate resource demand also.

The resource demand or the type of resources your company would need will depend on:

  • Projects.
  • BAU.
  • Support.
  • Admin.

As a project manager, your job is to forecast the shortage or abundance of employees for all types of projects. The gap between capacity and demand can be established in hours or person-days.

How often should you do Capacity Planning?

In an organization, the project managers are responsible for resource capacity planning. It can be done in two ways. One for the short-term projects and the other for the long term. For the shorter duration projects, the capacity planning can be done weekly or monthly.

On the other hand, for long-term projects, resource capacity planning can be done annually. However, you must evaluate the situation once every six months.

How will the resource capacity planning help?

The resource capacity planning can help any enterprise to:

  • Remove under-skilled employees.
  • Utilize competent resources without compromising the quality.
  • Save one employee from overbooking/double-booking.
  • Control unexplained quitting of jobs.
  • Control the firing and hiring cycles. 
  • Prevent spending extra money on last-minute hiring.

Why do you need a tool for capacity planning?

A software tool is needed for capacity planning because:

  • It helps in centralizing the data of all the projects and employees.
  • Makes the job easy for the project managers.
  • Saves you from skipping any important information.
  • Saves time.
  • Makes allocation and planning both convenient.

Resource Capacity Planning in every organization can be done easily with the Capacity Planning Software. eResource Scheduler is the best company to provide Enterprise Capacity Planning Solutions. They have experience of more than 10 years and have designed the software tool to work out the operational efficiency of the company.

A blogger by passion and working as a digital marketing manager in one of the leading digital marketing agencies of USA. Also, loves music, travelling, adventure, family and friends.