A new survey sheds light on the risks of inaccurately evaluating the demand for project resources. Get tips on effectively planning for your IT project's capacity.
Appleseed Partners, a marketing strategy and execution services company, and Planview, a portfolio and resource management company, both headquartered in Austin, TX, released a new survey today that shares key findings on the pain points that IT feels with overcommitted resources in product development and IT projects.
Why was this survey conducted?
The survey is intended to assist IT leaders to determine their level of maturity in relation to how resources are employed. The qualitative and quantitative survey cites poor capacity planning as the primary origin when it comes to the majority of resource management pain points, and that this pain tends to be reduced as IT organizations increase their capacity planning maturity. Organizations with a higher maturity have welcomed the cultural shift and have made inroads to become a more capacity-centered business.
Resource capacity planning refers to how efficiently and successfully companies plan for, allocate, and schedule their resources to meet task- and project-specific goals.
An organization's maturity level in terms of project and portfolio management refers to the level of preparedness and sophistication of a business as it relates to project and portfolio management (PPM) activities (see Gartner's five progressive levels of the Maturity Model). Within this model there are core factors that have an impact on the maturity levels: people, relationships, processes, technology, and financial management and the value provided.
Highlights from the survey
- The top pain points of IT and PMO leaders: overcommitted resources, constant change that affects assignments, and an inability to prioritize shared resources.
- Nearly 75% of organizations view capacity planning as extremely important, recognizing the benefits of being able to have visibility into the project demand pipeline and plan resources strategically.
- More than 50% of the organizations scoring a "low-maturity" level find it extremely difficult to achieve a culture centered on capacity planning.
- 29% of low maturity companies do not consider capacity constraints at all, while 29% of companies that do evaluate capacity take weeks to determine whether there is enough resource capacity to take on a new, unplanned project. The result is that low-maturity companies are in the midst of a costly overcommitment epidemic.
Maureen Carlson, Partner, Appleseed Partners, says, "Not enough companies are connecting the dots about the impact of resource overcommitment and the ability to deliver on innovation to meet growth objectives. The research shows that companies are working on products or projects that are at risk of delayed delivery because there was not enough capacity to take them on in the first place. Mature organizations are in a position to evaluate capacity in real-time to make critical business tradeoffs and see continued investment in this area as a competitive differentiator."
SEE: Project Management Resource Kit (Tech Pro Research)
Risks of not improving on resource management and capacity planning
Proper resource management is critical to the success of any project, and it's not hard to see based on the survey findings that poor capacity planning in projects has a significant and negative impact to project timelines, costs, and agility.
PMOs play a crucial role in assisting organizations with strategy and execution and as such must recognize the need for effective resource management and capacity planning. While many lower-maturity organizations may believe this shift in focus to a capacity-centered approach may seem daunting, the risks of not doing so can far outweigh the time, effort, and resources invested to make this necessary change.
In Forrester's 2016 report Managing portfolio velocity is the key to accelerating business agility, analyst Margo Visitacion wrote:
"Managing supply and demand is core to every business success; however, in the age of the customer, organizations must reorder the terms. Effectively managing demand sets the stage for cohesiveness at every phase of strategic planning and execution, and effective capacity management focuses resources on the work that delivers the most value to both customers and firms. Capturing all demand in systems and aggregating that demand with the appropriate context provides strategists with the information needed to make strategic choices. Doing it consistently enables executives to keep resources focused on initiatives that best serve customer interests in the most cost-effective ways."
The benefits to embracing effective capacity planning
Patrick Tickle, Chief Product Officer, Planview, says:
"The contrast between businesses that embrace capacity planning and those that do not is so profound that lower maturity organizations are consistently putting their operations at high risk. Capacity-centered organizations understand the economics of business innovation and digital transformation from a resource capacity perspective and reap the benefits of progressing from blind investments and decision fire drills to knowing precisely what resources are available, where they are applied, and how they can best be tapped to fuel growth objectives."
How to improve resource management and capacity planning
The report by Appleseed and Planview presents five steps to a more capacity-centered IT organization.
1: Make efforts to gain greater visibility into pipeline demand. The report findings show that in many organizations with a lower maturity, over 50% of projects undertaken are unplanned and have lower visibility into resource demand.
2: Strive to gain an improved understanding of resource capacity. Organizations that endeavor to understand resource capacity planning, and incorporate this into their planning with regularity, also tend to grow in their sophistication and maturity as a business.
3: Work to achieve a comprehensive view of both capacity and demand. Mature organizations have a 34% increased chance of having real-time portfolio pipeline visibility, the people available, and the necessary tools to get the job done right without relying on manual workarounds like spreadsheets.
4: Seize opportunities to conduct continuous prioritization and planning. Due to rapid growth or other factors, smaller businesses may not have the resources or time to effectively conduct ongoing PPM prioritization and planning activities. As a business develops more processes or has more resources, time, and business acumen, the opportunity and/or ability to conduct these activities with more frequency also improves.
5: Run and analyze what-if scenarios. As organizations increase in maturity, response times shorten, making decision-making much faster and hopefully more accurate.
For more details, visit Planview to read the entire survey.
- 10 ways to build a solid capacity planning effort (TechRepublic)
- 10 best practices for successful project management (TechRepublic)
- Project management: Plan ahead for critical resource contingencies (TechRepublic)
- Project portfolio management and IT governance (ZDNet)