Process Improvement

Resource Planning in Project Management: Everything You Need to Know

Written By: Matt Lieberson
May 6, 2022
21 min read

“Give me six hours to chop down a tree and I will spend the first four hours sharpening the axe.” This quote, of unknown origin, has double-edged meaning for today’s project managers.

On the one hand, it certainly pays to put a big chunk of effort into your project planning strategy, as this article will spell out.

On the other hand, management technology has become so sophisticated that if you pick the right solution—and take the time to customize it to your needs—your “first four hours of sharpening” can be whittled down substantially, allowing you to expedite projects and manage more efficiently.

This comprehensive guide to resource planning will address:

  • Why you need resource planning when managing projects.
  • How to create a resource management plan.
  • How to properly schedule resources.
  • What software can do for you to make the management of resources more streamlined, efficient, and successful.

Let’s get started with a step-by-step walkthrough of the resource planning in project management process. It starts with understanding what resource planning entails.

What Is Resource Planning?

Resource planning is a management process that helps a company manage its labor, time, budgets, materials, supplies, equipment, and other relevant assets. In terms of labor, resource planning identifies, organizes, and allocates tasks to a team based on their individual skill sets, availability, and experience.

A solid resource plan aligns all parts of a project in one easy-to-access place so all members of a team can quickly see the status of a job. For example, a project may be on schedule but over budget and short labor. Managers need to use resource planning to see these kinds of issues so they can be solved before they escalate and jeopardize a project's success.

Resource planning is an integral part of the larger project management process.

What Is Resource Planning in Project Management?

Project management requires timely information, strategic forecasting, a resource plan, and a whole lot of transparency.

Project management is the overall plan for taking an entire project from conception to delivery, while resource planning operates within the project management system, ensuring any resources needed to complete the job are accessible when it’s needed.

While that sounds simple to do—create a project schedule and expertly manage it—think about all the scenarios that can throw a wrench in the works. People get sick, supplies get lost, contractors flake, and designs require tweaking.

So the real way to look at resource planning in project management is to consider how to account for the surprises that derail a lucrative job.
Project

Project Resource S.O.S.

Smart project managers will build redundancy into their plans to the best of their ability. This includes strategies such as:

  • Staying on top of resource availability by having duplicate equipment or tools.
  • Cross-training employees to fill in for absent coworkers.
  • Maintaining a good stable of contractors who will step in if a job falls behind.
  • Creating budgets that account for potential additional expenses that can be employed to help speed up a job if necessary.
  • Keeping conservative timelines when bidding on a project to account for lost time due to weather, error, labor issues, product delays, and the like.

It’s important to understand the difference between resource planning and capacity planning when deciding how to approach your resource plan.

Resource Planning

Resource planning is the process of assigning the right people to the right tasks and ensuring equipment and materials are available for one job or a complete schedule of jobs.

Capacity Planning

Capacity Planning is the actual process of accounting for and monitoring the current resources of an organization to determine whether the company can take on additional work (or whether employees are potentially idle). Tracking resource capacity helps project managers decide whether they need to hire more help, acquire more contract labor, or order equipment.

Hybrid Planning

Of course, in many small companies, the resource planner is often performing the project tasks of both resource and capacity planning. If this is the case, it is important to remember to differentiate between managing resources in the moment and considering the needs of projects coming down the pike.

Why Do Project Managers Need Resource Planning?

Resource planning is vital to a successful company in any industry. Companies that get it right have a positive project environment, run smoothly, and boast a satisfied workforce and grow their customer base through referrals. Companies that struggle to create a good resource plan suffer the following:

  • Employee burnout (overallocation of resources). Shifting priorities and stressful long hours required to keep projects moving forward can quickly translate into a revolving door of employees at great expense to a business’s bottom line and morale.
  • Idle employees (underutilization of resources). Just as bad as overworking your team is leaving them idle as jobs start and stop due to bad planning. Many companies track “utilization rate,” which measures the amount of time employees spend on valuable work, in order to make sure their workforce is working productively. Many set a utilization benchmark that prompts them to make a change if hit. For example, if a company finds its workforce at 90% utilization (its chosen benchmark metric), HR knows it's time to hire more employees.
  • Budget shortfalls. Budget problems happen when projects run longer than planned or project managers have to acquire labor or materials unexpectedly because of poor planning.
  • Missed project deadlines. Managing resources poorly can have a negative impact on the deliverable at every stage of the project’s development. This is not only bad for company efficiency, morale, and budgets, but it’s also a bad reflection on the company from an outside perspective, which can result in lost clients and bad reviews.
    are clear reasons why a resource manager would need resource planning in project management, but where do you start? By making a plan. Let’s walk through what goes into a plan and how to get started.

What Is a Resource Management Plan?

A resource management plan is the physical manifestation of your company’s goals and objectives. It’s the written document or software solution that puts theory into day-to-day practice. The best place to start creating a plan is by breaking down a project into its discrete parts. Some people create a work breakdown structure (WBS)

In short, a WBS reduces a project to its individual deliverables in a list format. This list, if followed, will result in a completed project. The nice thing about creating a WBS is that it offers a quick-glance look at all the deliverables. You can flesh them out at a later stage when you create the plan and assign resources to the work.

How to Create a Resource Management Plan

There are three first broad steps to creating a resource management plan to keep in mind as you create your resource management plan:

  1. Itemize and understand all your company resources. This includes all resource availability, including people/labor, materials, equipment, space, and anything else you count on to get your projects completed.
  2. Determine how many of these resources are needed to get the project done.
  3. Create a resource schedule and study how likely the team you have lined up will be able to complete the project in the required timeframe.

These sound a bit generic, but these three steps are simply the 40,000-foot overview you need to start with before plugging variables and data into an actual plan. It follows a general life-cycle and can be customized to the unique needs of your company.

Add as much granularity to the above list as you can. For example, instead of looking at resources by month, break it down into weeks. Note the actual hours your team members will be able to devote to your project. Often, people work on more than one project. Study how that will impact the pace and scope of your project.

Last, include any information on possible constraints for your job because all companies have their unique bottlenecks and quirks, such as, for instance, the boss who holds things up in review, or, conversely, the boss that pushes hard to beat schedules to get project performance bonuses.

You might be operating during a severe labor or supply shortage with severe resource capacity constraints. You may have grown quickly in a short time period and have to account for onboarding and training of new hires.

As a resource planner you are uniquely positioned to know the culture and daily reality of your company—make sure to include this valuable insight when planning.

Now it’s time to drill down to get your plan started. Here are 5 areas to address:

  1. Resources. What is your resource availability? When you are considering human resources, collect names, titles, department manager/supervisor, teams they serve on, and level of expertise and skill sets.
  2. Project Costs. Assign costs to all available resources on your list. This is helpful for when you map out potential resources to assign to a project and need to be mindful of the budget.
  3. Availability. Create a detailed schedule of where resources are allocated and how long they will be working on a given project. In addition, it’s ideal to know workers’ typical weekly schedules and planned absences for vacation and training. Determine whether they are already working on another project, and if so, make sure it will wrap up on time.
  4. Source. Do all your resources work for you or are they temporary workers or contractors? Are they “locked down” by another project manager with seniority? Ascertain how these resources performed on past projects. Did they need hand holding? Did they consistently meet deadlines? Did their work need heavy revision?
  5. Forecasting. Create a forecast that addresses what the demand for resources will be in the short, middle, and long term. This will obviously change as projects come into focus and get more specific, but even a general idea of potential requirements can help pinpoint weaknesses or shortfalls that need to be addressed.

There are other areas you should assess that are unique to your company. Add them to the above project tasks list and come up with a general idea of what kinds of data you need to create a thorough project scope.

Once you’ve done this, you can layer this information into a plan and then follow the steps to create an effective resource planning plan.

What Are the Stages of a Resource Management Plan?

You now have a general idea of your plan components. Now it’s time to analyze that against the stages a project typically follows to make sure you are developing a seemless resource planning template for your company.

Confirm Resources

You blue-skyed what you want, but can you have it? This is where your resource goals are double checked against other projects at your company or other constraints. These resources aren’t just people you are assigning tasks to, they also include supplies, office space, materials, equipment, outsourced contractors, and the like.

Acquire Resources

Now, your plan takes a bit more shape as you confirm the timeframe for your project, assemble your project teams and go through the process of requisitions and sourcing. This stage is where you set budgets, negotiate and sign contracts, and address company procedures and policies that apply to your job.

Manage Resources

Now that you have your team, you need to assign them to their correct roles, confirm their responsibilities, and make sure their schedules are accurate and doable. This can be trickier with resources you don’t have as much control over (contractors versus employees), so make sure you ensure that outside contractors or leased equipment are under contract and ready to go. It is wise to factor in padding on the schedule to compensate for contingencies. Some resource managers find it wise to spread critical work out over multiple people to mitigate risk.

Monitor Resources

The job is under way. Now is not the time to sit back and hope for the best. Remember: Your plan is just a plan; if it isn’t executed well, you risk budget or schedule slips. Important issues to watch include:

  • Underutilized or overutilized labor
  • Supply shortages
  • Price fluctuation for any products, supplies, or labor
  • Weather-related slowdowns
  • Client requests or changes

Now that you understand the general components and stages, let’s marry them with technology to create a cohesive plan that is agile, accessible, and transparent. In fact, with the right technology, you can quickly turn your resource data into an actionable plan with clear, replicable steps, which will benefit all your projects.

First, let’s look at what resource management software is and how you can leverage its power.

What Is Resource Management Software?

Resource management software is a technology tool that allows you and your project team to plan, schedule, monitor, and report on projects. While many companies use technology for parts of a project, a smart company will use resource planning software as an overall umbrella to handle every job from initial conception and planning through deliverables and end-of-project billing and reporting.

Benefits of Online Resource Planning Software

One of the most important aspects of resource management software is that it provides real-time data. In the case of resource planning, things can change quickly. Static excel sheets or manual processes can become obsolete in a flash.

With cloud-based software, the opposite happens: The data becomes dynamic and can be accessed and updated by team members inside and outside the company, from any location.

The main benefits of software include the ability to:

  • View the overall project health in real-time.
  • Track resource allocation and costs and how they impact the budget.
  • Integrate all resources into one place for easy monitoring.
  • Assess and shift team workloads.
  • Integrate resources into the project plan.
  • Conduct actual vs. projected costs assessments.
  • Track employee or contractor hours and expenses.

Today’s software solutions are highly customizable planning resources that handle generic workflow and project management. However, you can also add functionality for characteristics your company values, such as critical path method tools, specific resource planning templates, or custom resource planning techniques.

Let’s take Quickbase as an example and walk through how its solutions foster proper planning and resource management success. With Quickbase you can:

Track and Manage Projects End-to-End

Broad visibility into your project allows you to monitor status, progress, and performance of ongoing work. This will allow you to spot areas where projects may be under or over performing. Because Quickbase pulls information from different sources into one comprehensive dashboard, you can see the health of your project at a glance.

Increase Productivity by Moving Beyond Spreadsheets

Spreadsheets aren't a responsive resource management tool. They are static and depend on manual updating by users. Conversely, project management software fosters collaboration among the team, employees, contractors, partners, and other stakeholders. All of this is stored in the cloud, which means it updates in real-time for a truly accurate view of the project’s status.

Reduce Mistakes and Delays With the Use of Dashboards

Let’s face it, most projects move at breakneck speed. Project managers rarely have the time to dig into data or scroll through emails to find information they are looking for. Interactive dashboards are the solution for this. They allow you to click on all the resources of a project, such as job status, labor hours, budgets, material deliveries, and then drill down for more detail.

Assigning Roles & Permissions

While a project is ongoing, various project stakeholders and team members need access to different data. With Quickbase, a project manager can manage roles and permissions as needed to make sure all data is protected and also shared with relevant team members.

Access Automated Reports

The hallmark of a good project manager is one who can manage multiple projects simultaneously using best practices and who can replicate success project after project. The way to do this is by using automated reports, which allow interim reporting during a job and offer a wealth of data after a job to assess what worked and what didn’t. A software like Quickbase allows users to generate reports at the touch of a button.

What Are the Most Important Features in a Management Software?

Make sure your resource planning is top notch by ensuring your software has these features:

  • An interactive dashboard
  • Real-time data updating of all resources, including availability, costs, hourly rates, and the like.
  • Easy-to-understand charts, graphs, and reports
  • Offers easy download of materials
  • The ability to set and monitor budgets in an easy-to-use and share format.
  • Easy scheduling format with the ability to assign teams and track resources.
  • Seamless toggling across multiple projects.
  • Performance tracking.
  • The ability to forecast budgets and schedules.
  • Easy-to-generate reports.

This is by no means an exhaustive list. Instead, it points out the typical functions a project manager can use to help make a resource planning or project management job progress efficiently. To make sure you get the functionality you need, trial a project management software solution.

How to Execute a Resource Plan Using Software

Here’s a quick run through of how a generic project could be run through software to optimize resource planning. It assumes you have created your plan in the software. Now it's time for the inputs:

Resources

Enter your resources, their costs, and scheduling parameters. These include people and materials/supplies and equipment.

Costs

All of your people and materials should have costs associated with them. For labor, it’s typically hourly costs. Once you enter them, they become real-time data tied into the budget. As projections turn into actuals, you can see how your budget is faring throughout the project timeframe.

Tasks

Enter your tasks and assign them start and end dates. These tasks can then be assigned to the resources you have at your disposal and can be tracked within the software and populated into relevant scheduling and cost tracking.

Time

Once a project has started, people log their hours via electronic timesheets, and it updates in the software. Just as you can do with budgets, you can see how your allocations compare with actuals.

Report

Periodic reporting to clients or other stakeholders helps foster trust. Using the software you can quickly create and share reports that show the metrics that are most important to them.

As the project proceeds, you can use the data in the software to reallocate resources, move people from one function to another, or request more resources. This crucial step helps you keep a project from getting off track by allowing adjustments throughout the process.

As you can see, software is an invaluable tool for successful resource planning. If you use a no-code solution like Quickbase, you can add other functions to the more broad ones listed above. To help you decide what those might be, consider the following typical steps in the resource planning process. A customizable software will allow you to integrate all these (and more) with ease.

Best Steps for Resource Planning

You have all your data inputs, have agreed on what you are monitoring and tracking, and have familiarized yourself with software you plan to use. Here’s where it gets fun. You can use the software as you follow the best practices steps detailed below.

Consider using a smaller project or even a made-up project to practice customizing your resource planning process to best solve for the unique needs of your company. For example, some companies may struggle more with labor and staffing, while others are trying to refine and tighten schedules.

Conduct a Resource Management Meeting

While your inclination might be to start setting up a project and then getting input afterward, it is generally a better idea to add a resource management meeting as the first project phase. This meeting brings together all stakeholders so you can gather all the requirements. Doing this will ensure the plan you bring to life in the software will be viable from the start.

Ask yourself the following questions before you put effort into setting up a project in your software:

  • Do you know your skilled resources, their costs, and their availability?
  • Do you have approved project budgets and budget milestones?
  • Do you have an approved schedule and schedule milestones?
  • Do you have a detailed list of non-human resources, such as materials, products, equipment, and tools?

Match Resources to Tasks

Using your software’s workload management tool makes allocating resources easy. Once that data is entered, you will get a clear picture of where you have too many people, too few, or potential schedule problems with vacations or multiple departments using the same resources.

Enter Your Budgets

There are all kinds of budgets on a job: financial, time, materials, people, and others. Using the information you have gathered from your kick-off meeting, management, or client, enter all of them into your software so you can have a complete picture of all of them, and as they update in real-time you will be able to look at your dashboard and assess the health of your project.

Forecast Future Needs

While your current project is ongoing, it is imperative that you keep one eye on the future, even if things are moving along well. Your software can help you determine how you can solve for a possible labor shortage in the future by hiring additional contractors. Not only will it tell you whether there is availability, but it will also reflect the addition of contractors to your budget forecast.

Make Your Resource Plan Replicable

When you consider all the work you have put into creating a perfect resource planning tool, it makes sense to create it in a way that it can be used for future projects as well. You can set up workflows that are generic enough to be used across many projects and then have additional micro-focused management tools that are specific to a certain job.

The more you use your software, the more you will see the potential to customize only where you need to. Having a replicable resource plan will help your organization as a whole. As the entire team becomes accustomed to seeing data in a particular way, they will become more comfortable with it and therefore interact with it more as a result.

Use Your Plan As a Springboard to Better Projects

Don’t let your project data end when a project wraps up. Instead, use what you have collected to analyze how you could work smarter and faster on future projects.

Information such as budget overages, delays, idle workers, or expedited timelines–whatever the data is–can be mined for information on how to adjust resources for the next project.

Use the reports functionality to create a report of what you discover to share with your team.

Conclusion

Resource planning is pretty simple: It is estimating all the work that needs to be done and creating a schedule and then slotting in resources where they belong to get the work done on time and on budget.

The good news is that with some planning and careful scrutiny of your needs you can master resource planning, particularly in the face of the unique challenges facing project managers today.

Try Quickbase’s no-code solution and get your resource planning organized and operating smoothly. In the process you will not only get your projects on track, but you will also learn more about your business by reviewing the data available through digital integration. This data is a powerful ally you can use to bring efficiencies to your projects today—and grow your business exponentially tomorrow.

FAQs

What is resource planning?

Resource planning is a management process that helps a company manage its labor, time, budgets, materials, supplies, equipment, and other relevant assets. In terms of labor, resource planning identifies, organizes, and allocates tasks to a team based on their individual skillsets, availability, and experience.

Why is resource planning so important for project management?

Resource planning is important for project management to avoid schedule delays, employee burnout, underutilized resources, budget shortfalls, missed deadlines, and poor client relations. Efficient and transparent management of resources will enable a project manager to successfully manage multiple projects.

What are the steps in resource planning?

There are six general steps in resource planning:

  1. Conduct a resource management meeting to get project requirements.
  2. Match your resources to the tasks required to get the job done.
  3. Enter all your budgets–time, money, and other categories that need to be tracked.
  4. Forecast future needs while monitoring the project’s progress.
  5. Make your resource plan replicable.
  6. Use your plan as a best practice springboard for future projects.
Written By: Matt Lieberson

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