Resource Projection – Introduction
Business planning is the art and science of identifying what a company should and should not do balanced by its available resources. While much of business planning focuses on setting strategic direction and defining tactical activities, achieving balance requires that significant attention be given to the critical area of resource projection.
Annualized resource projection involves a number of processes that together paint a picture of the organization’s resource availability and needs. Creation of this picture begins with development of two key elements: resource availability and standardized activity assumptions. These assumptions are then applied to the proposed activities identified during the alternative development process. The resulting all encompassing list of resource loaded activities is further honed through an iterative process involving resource projection and alternative selection into the final portfolio of activities to be pursued. Derived from this portfolio is the organization’s time bound resource availability and needs.
Capacity planning refines the annualized resource projections; giving the organization insight to the additional resources needed in order to account for the inefficiencies associated with resource scheduling; personnel hiring delays and qualification; and equipment maintenance, calibration, and retooling. Each of these inefficiencies prevent resources from being available one hundred percent of the time; thereby forcing the organization to either increase its asset base or decrease its level of activity. Capacity planning reveals the average level of inefficiency providing insight to the resource and activity planning adjustments to be made.
Focus of the Resource Projection Topic
Articles in this topic area are dedicated to discussing the leading practices of companies successfully executing a resource projection program in support of strategic planning. The following articles, podcasts, documents, and resources cover those topics critical to a strong resource projection program.
Articles
- Best Practice – Standardized Assumptions by StrategyDriven Contributors
- Best Practice – Begin with the Work by StrategyDriven Contributors
- Best Practice – Controlling Assumption Changes by StrategyDriven Contributors
- Best Practice – 80 Percent Efficiency Estimate by StrategyDriven Contributors
- Best Practice – The 40 Hour Work Week by StrategyDriven Contributors
- Best Practice – The 45 Week Year by StrategyDriven Contributors
- Warning Flag – Assumed Discretionary Effort by StrategyDriven Contributors
Documents
Whitepapers
Sign up for our Email NewsletterResource Projection Best Practice 1 – Standardized Assumptions
Understanding the resource cost of activities is key to creating confidence that assigned work can be completed successfully and on time. Regardless of whether activities are frequently recurring and therefore well understood or one time efforts to produce a unique product or service, the use of standardized resource assumptions greatly helps the organization anticipate the quantity and type of resources needed to perform its approved work.
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Additional Resources
StrategyDriven contributors recommend the following resource that elaborates and compliments the Standardized Assumptions best practice:
A Guide to the Project Management Body of Knowledge, Third Edition
by the Project Management Institute
Resource Projection Best Practice 2 – Begin with the Work
The business planning process of balancing what the organization will do with its limited resources is an iterative one. However, resource owners too often focus on the amount of resources they have and alter work estimates so the activity portfolio they are responsible for fits within the resource pool under their immediate control. This practice frequently leads to under-estimating resource needs as managers continually strive to expand their activity portfolios; resulting in reduced quality, late deliveries, and a diminished bottom line.
Resource Projection Best Practice 3 – Controlling Assumption Changes
Standardized activity resource assumptions enable decision-makers to anticipate the quantity and type of resources needed to perform approved work; facilitating selection between competing alternatives, long-term resource planning, day-to-day scheduling, and performance measurement. Over time however, personnel, process, and business environment changes will necessitate reevaluation and alteration of the organization’s standardized activity assumptions. To accommodate these changes and maintain the benefits of using standardized assumptions requires establishment and use of a change control process.
Resource Projection Best Practice 4 – 80 Percent Efficiency Estimate
Human beings are social creatures having both emotional and physical needs. Businesses able to satisfy these needs will be better positioned to attract and retain talented personnel; giving these businesses a much needed advantage in the increasingly knowledge driven marketplace where human resources are increasingly limited. Such organizations will further benefit from increased worker engagement because employees feel more connected and valued.
Meeting these very personalized needs requires an ongoing time investment, social time to build and maintain co-worker relationships, to connect with customers and clients, to contact family and friends, as well as time to physically relax, refresh, reflect, and rejuvenate. This time investment varies day-to-day and person-to-person making it extremely difficult to measure. Time studies, project management research, and this author’s managerial experience suggest that knowledge workers, on average, require a twenty percent time investment in these personal activities. Stated another way, professionals spend about one and a half hours of an eight hour workday on non-productive but personally necessary activities. Hence, professionals, those whose breaks are ill-defined, can be assumed to work at eighty percent efficiency when fully engaged.
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