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Businesses are reviewing their resource planning capabilities to become more agile and profitable. In recent years, uncertain global markets have resulted in the loss of money and workforces for a large number of employers. Add to that, the project management landscape has changed dramatically.

For instance, project managers face the constant challenge of identifying best-fit resources from the global talent pool, increasingly working across time zones, full-time, part-time and on contract. These highly-skilled resources must be available to work on short notice on complex projects. Managing them while following contrasting labor laws and compliances is not easy.

On the demand side, decision-makers must deal with more frequent projects with reduced scope for work. Project managers must utilize their resources’ billable work hours for such projects to remain financially viable for organizations. This means businesses need to plan their people, finances, time, processes, and technology platforms in a manner that helps provide a seamless stakeholder experience and increase project margins. And resource planning helps with just that.

A well-executed resource planning process can help project managers minimize costs, predict resource requirements, and deliver projects on time and within budget, increasing profitability. Employers that align their resources and plan them well are more likely to offer consistently better quality project outcomes and enjoy higher customer satisfaction than those that don’t.

If this sounds challenging, don’t worry. We’ve got you covered.

This blog explains everything there is to know about resource planning and how your business can benefit from doing it right.

What Is Resource Planning?

Resource planning refers to planning and aligning business resources like money, time, technology platforms and workforces to improve project outcomes.

Resource planning includes identifying team members and allocating them work based on their skills and abilities. Plus, forecasting and acquiring the platforms, tools, processes and skills required to deliver high-quality project outcomes, consistently high stakeholder satisfaction and profit margins. Through resource planning, project managers can manage their future projects better by preparing for challenges before they occur.

When carrying out resource planning, project managers must be flexible and adaptable. The ability to pivot quickly can help tackle unforeseen changes. For instance, new requirements can shorten deadlines, increase work deliverables, and create the need for new skills and tools.

Through resource planning, project managers can become more flexible and adaptable so they can:

  • Deal with unforeseen issues, such as staff leave due to health or family emergencies
  • Handle tweaks in project priorities
  • Minimize cost escalation owing to changes to project deliverables
  • Address resource shortages, predict resource requirements and manage demand-supply gaps
  • Juggle multiple task priorities resulting from client requests

Why Is Resource Planning Important?

Resource planning is important for several reasons. We have listed some of them below.

1. Enhances Efficiency

An illustration of some people pushing round red objects, indicating movement, improvement and competition

The success of any project depends on effective execution. Resource planning in project management helps managers preempt project requirements and align resources beforehand. This preemptive intervention helps either negate any last-minute changes in resource allocation or the skills needed to manage a project or address them more proactively.

For instance, identifying the right person for each job. To find the best fit, managers must understand the skills and aptitude of their resources and match them with the traits and abilities necessary to execute the project successfully.

But, first, they should have real-time visibility into their availability, time-off and utilization levels to assess whether or not they can allocate the tasks to those resources. Since project managers consider such possibilities while undertaking resource planning, they are able to allocate the most suitable resources and the necessary technology tools and platforms.

As a result, teams are more efficient and deliver higher quality output, impacting project outcomes positively.

2. Enables Judicious Allocation of Resources

Any business has finite resources, like workers, tools and time. Resource planning helps make timely decisions about how and when to allocate resources, helping maximize organizational gains.

Let us understand with an example. Suppose there is a last-minute scope change. Then, project managers must factor in their members’ workload when allocating tasks and identify overburdened individuals.

Productivity data can help determine employee bandwidth. This scientific approach helps ensure that team members are not unduly stressed, boosting employee satisfaction and efficiency.

3. Helps Prepare for Future Projects

Resource planning is key in helping businesses plan resource capacity and availability, thereby ensuring that they have enough resources to manage projects in the pipeline. Otherwise, firms are likely to face resource shortages and acquire them at higher prices, impacting project profitability and customer relationships. Resource planning also enables project managers to take a telescopic view of their team structures and headcounts, improving longer-term stability.

Steps in the Resource Planning Process

Resource planning is a multi-step process that involves careful assessment of available capabilities and existing gaps. Mentioned below is a five-step process:

Step 1: Planning a Project’s Requirements

The first step of the resource planning process is to evaluate the project’s resource requirements. Here, a project manager should ask:

  • How many and what types of human resources (full-time, contractual and part-time) will I require?
  • What technology tools and platforms will help execute the project seamlessly?
  • How much time will the project take to complete, and what will it cost in terms of work hours?
  • How much money will I need to acquire people and tools?

By answering these questions, project managers can easily pinpoint all the necessary resources needed to complete a project.

Step 2: Resource Acquisition

Once project managers have visibility of the resources, they need to acquire them. The idea is to collate all resources beforehand and pool them in a manner that decision-makers have comprehensive visibility. Unfortunately, acquiring and retaining human resources is one of the trickiest aspects of resource planning.

A fast-changing skills landscape means organizations must consider hiring from outside, as upskilling and reskilling the available talent pool is time-consuming and not viable for time-bound and time-sensitive projects.

For this, human resources departments need to work in tandem with project managers to identify and hire professionals based on their skills, expertise and experience.

Step 3: Resource Management

Here, project managers manage their resources using one of the many resource management techniques like resource forecasting and resource leveling. Essentially, using a technique like resource forecasting, project managers are able to match their resource demand with supply, thus ensuring that they always have sufficient resources to manage their projects.

Aside from helping maintain a healthy proportion of resources pool to projects, project managers can determine the resources required from the current resource supply for future projects, such as the cumulative work hours and cost rates of human resources. Hence, project managers manage their resources optimally, often using Professional Service Automation (PSA) software to gain real-time visibility to better control the delivery and quality of their projects.

Resource management reduces the risk quotient of team leaders and managers as they can spot potential resource conflicts early on and address them proactively. This farsighted approach reduces the likelihood of delays and cost escalation. People management aside, resource management also encompasses the technology and tools required for people to execute tasks and mandates regular inspection of schedules and timelines.

Step 4: Controlling Resource Usage

Male and female industrial engineers in hard hats discuss new projects while using laptops

To ensure peak efficiency, project managers need a way to assess how efficiently resources are being used. For instance, they monitor human resource usage by measuring the utilization rate, which is calculated as follows:

Utilization Rate = Billable Hours/Total Working Hours

For example, the utilization rate of a consultant working for 60 hours out of a total of 100 hours would be 60%. Organizations commonly exclude approved leave and holidays. However, they can choose to implement the process that works best for them.

Low resource utilization must be corrected immediately to maintain healthy project margins.

Step 5: Reviewing the Resource Planning Process

No resource planning process is fool-proof, and the scope for improvement always exists. In this final step, project managers review what went well and how they can further streamline processes and resources to reduce the time-to-delivery and increase efficiencies.

For instance, they can evaluate the costs of hiring and retaining full-time workers vs. contractual employees to reduce human resource-related expenses. Or assess whether or not the employees achieved the desired goals. This way, project managers can make smarter hiring decisions and avoid ad-hoc talent acquisition in future projects.

How Can Efficient Resource Planning Lead to Project Success?

We have outlined the steps involved in the resource planning process. Now, let us check out some of the advantages of resource planning, as listed below.

1. Improves Output

When all resources are aligned and allocated intelligently, project outcomes are better. Teams work together and perform well, and understand client and stakeholder expectations. Businesses acquire resources after carefully considering how to utilize them.

More so, a clear line of communication and expectation exists between employers and employees, reducing the likelihood of miscommunication. These factors minimize rework and repeated realignment of resources. Hence, teams are well-equipped to perform their duties efficiently, which improves output.

2. Saves Time

Resource planning helps preempt project needs and identify resources beforehand, which means project managers are well-prepared. For instance, project managers identify the team members who are most qualified to undertake specific tasks before allocating them tasks. This way, teams can achieve their project milestones faster.

Businesses are increasingly leveraging Artificial Intelligence (AI)-enabled PSA platforms that offer real-time visibility into project information and an up-to-date view of their progress in one place. So, managers gain better insight into their projects and bottlenecks, saving them time.

3. Saves Money

Efficient resource planning leads to judicious resource allocation, allowing team leaders and managers to assign projects at the right time. Conversely, last-minute resource acquisition or under-utilizing can lead to cost escalations.

For instance, if team members with specialized skills are on leave, project managers can postpone the project and allocate other team members tasks that are more aligned with their skill set until specialists resume work. Such an approach means team members don’t waste time undertaking tasks they cannot complete without input from those specialists and work on other projects.

4. Helps Prepare for the Future

Resource planning enables organizations to plan projects for the future based on their awareness of the available resources and the forecast demand. Since they are already well-versed with current project requirements and have excellent visibility into the project pipeline, they can better plan their resources, like upskilling employees for future projects, so they don’t need to hire from outside. Or conversely, project managers can inform resource managers to hire specialists with the skill set that they will need to execute a future project.

Consequences of Inefficient Resource Planning

1. Increased Likelihood of Delays and Project Failures

Inefficient resource planning can severely impact project timelines. Teams can find it challenging to deliver on their tasks if they don’t have clarity about their deliverables and expectations or don’t have access to the tools and software that can help them complete their work more efficiently. Issues like resource mismatch, unclear objectives, and unrealistic schedules can derail project progress and even lead to project failure.

2. Poor Resource Utilization

Inefficient resource planning leads to under-utilized or overutilized resources, which breeds discontent and costs businesses much more than money. For instance, employees may suffer burnout due to excessive work and may be less motivated to contribute. Or under-utilized employees can lead to the loss of billable hours. Without adequate resource planning, poor resource utilization is a given and always leads to a loss of revenue.

3. Affected Bottom Line

Bottom line text circled in red pencil on a textured paper surface

Improper resource planning can result in additional labor, equipment, facilities and administration-related expenses, all of which increase project costs. Plus, team leaders and managers cannot monitor and control team-related costs without resource planning, which affects project profitability. Therefore, resource planning is critical for a healthy bottom line, especially when teams are using consultants or freelancers.

How Different Industries Can Benefit From Efficient Resource Planning

1. Marketing/Media

The demand for employees with new skill sets is rising in media and marketing organizations. However, the lack of clear visibility into the skill sets of the existing organizational resources can dent its effort to bridge the skills gap with training or talent acquisition initiatives.

Efficient resource planning can help them manage their employees’ skills & certification management capabilities. And track every resource’s skills and expertise levels. Using resource management software like Polaris PSA, organizations can quickly analyze skill set availability to proactively hire or train their resources against future project demand.

2. IT/Tech

The information technology industry is the backbone of the services ecosystem and must stay ahead of the curve. However, massive and ongoing technological advances like AI and ML mean the industry will consistently play catchup to acquire and retain highly-specialized and skilled knowledge workers to manage their clients.

Given the need for specialized knowledge workers, often at short notice, the IT industry can benefit immensely from prudent resource planning. Demand forecasting for human and technological resources to complement one another for efficient client servicing will also be useful.

3. Accounting/Audit

The accounting industry also faces a serious skills shortage due to high employee turnover and the need for technologically-skilled employees. Navigating various tax laws, regulatory changes, and new payroll management systems for their clients requires a clear understanding of organizational resources, and the ability to hire, skill and upgrade on the go. Resource planning can enable accounting firms to manage such business requirements more effectively.

4. Legal Firms

Legal organizations are also witnessing a sea-change in their hiring models. Lawyers are increasingly working as consultants rather than full-time employees. In such cases, resource planning can help legal firms track and manage their consultants’ billable work hours and align suitable resources for future tasks. This way, they can remain more profitable and offer disruption-free services.

5. Consulting

Consulting businesses often list access to resources with the required skill sets as one of their foremost challenges. Market fluctuations have made it harder to forecast resource requirements and ensure profitability. So, management consulting firms need real-time visibility into key metrics of their resources for making proactive decisions.

Businesses can use intelligent tools to better manage their resource planning processes and plan intelligently to account for skills. Using intelligent resource management platforms, businesses can access a detailed skills and certifications catalog, allocate human resources according to skill sets and hire or train human resources based on accurate analysis of skill sets.

6. Engineering/Construction

Engineering and construction services are increasingly witnessing fluctuating demand and supply – where the demand for specialized services can emerge from nowhere. Preempting such demands is difficult, and aligning highly-skilled resources for them is even more so.

Add to that, the disruptions in the labor markets have also impacted blue-collared workers. Amid these business challenges, resource planning can help businesses manage the supply of resources judiciously so that they can operate efficiently and profitably.

How to Use a Resource Planning Tool for Efficient Resourcing

Resource planning has become increasingly complicated after organizations have adopted remote and hybrid workplace ecosystems in droves, are hiring globally and working with clients across geographies. On the demand side, client requirements are changing drastically. While on the supply side, consistent disruptions in the labor markets have created challenges around acquiring and retaining highly-skilled workers – who can work on projects that require specific skills and expertise.

Project managers can no longer rely on traditional or stand-alone solutions to manage resources and predict resource availability efficiently.

Unfortunately, most organizations use manual or stand-alone solutions to manage employee schedules, skills, certifications, attendance, and time off. However, these stand-alone solutions operate in silos and create fragmented data – which means managers must spend precious billable work hours to interpret employee data and pinpoint the best-fit resources for the task. This lack of real-time visibility into resource availability is a real challenge impacting efficient resource planning.

How Polaris PSA Can Help

Organizations are increasingly deploying PSA tools to plan their resources better. Polaris PSA is one such tool. The world’s first self-driving PSA, Polaris PSA, employs advanced AI/ML (Artificial Intelligence/ Machine Learning) technology to analyze real-time data and deliver actionable recommendations that keep resources on track.

Some of its key features are listed below.

1. Intelligent Resource Management

Organizations can leverage AI/ML-powered Polaris PSA to manage resources on autopilot and optimize business growth. Polaris ‘Smartmatch’ automatically weighs resources’ ongoing engagements and their skill sets and provides intelligent recommendations on the best fit for a project’s requirements. In addition, its resourcing workflows enable seamless collaboration between resource managers and project managers.

Polaris also offers complex and customized selection criteria. Hence, project leaders and managers can prioritize specific skill sets when requesting resources, to allocate the best resources to each project.

2. Cost-optimized Resource Allocation

Project managers can use Polaris PSA to account for user schedules, time off, and other important details when distributing allocated hours to days. Thus, they can allocate resources optimally. Using this feature, project managers and team leaders gain long-term visibility into their resources’ availability, which minimizes project delays.

3. Smart Task Management

Project managers enjoy greater clarity and ease of use managing project tasks using an industry-leading, intuitive project interface. It is an intelligent tool that considers direct and indirect variables like utilization and margins. It helps organizations assess compatible rates for all project resources.

4. Skills & Certification Management

Organizations can leverage Polaris PSA’s skills and certification management feature to assess their employees’ skills, certificates and expertise levels as desired. Plus, they can easily manage skills and certification updates with attestations. Polaris PSA also features a skills catalog function that allows the creation of a reference catalog of skills needed by each role.

Organizations can also conduct skills-based assignments to fully leverage the skills and expertise of their resources, while initiating and fulfilling resource requests. Polaris PSA enables organizations to manage hiring and training needs by helping project managers analyze resource availability based on skill set. This further enables them to proactively hire or retrain resources and meet future demand.

Frequently Asked Questions

1. What are the steps of resource planning?

There are five steps in the resource planning process:

  • Planning the project requirements
  • Acquiring resources
  • Managing resources
  • Controlling resource usage
  • Reviewing resource planning

2. Why is resource planning important?

Resource planning in project management helps managers preempt project requirements and align resources beforehand. This way, project managers optimize project costs and resource utilization, enhancing efficiency and profitability. This preemptive intervention helps either negate any last-minute changes in resource allocation or the skills needed to manage a project or address them more proactively.

3. What is an example of resource planning?

Resource planning is a systematic process to ensure optimal utilization of time and people by allocating work to team members based on their skills and ability, to attain the highest possible efficiency.

Here’s an example of resource planning: Suppose an organization wishes to complete a software development project. To accomplish this, it will outline the project’s requirements, address hiring needs, manage the project deliverables and ensure control over resource usage to enhance revenue. Plus, it will examine the resource planning process to assess how it can improve processes, address gaps and create a more fool-proof strategy.

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Shashank Shekhar


Shashank Shekhar

Shashank Shekhar has been a Senior Marketing Communications Specialist for over 9 years. He specializes in writing about technology trends like Artificial Intelligence (AI) and machine learning (ML) and their impact on shaping the project management landscape with tools like professional services automation solutions and time-tracking solutions. Outside of work, he loves reading about history, astrophysics and geopolitics.

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