Effective Resource Demand Management
Effective resource demand management seems easy in concept. Yet most organizations struggle to achieve any positive outcome in this area, even after purchasing costly tools and trying out significant organizational improvements. Why? Because resource demand management is an inherently complex and multi-dimensional set of processes that need to be tailored and applied sensitively if one is to have any chance of success.
However MI-GSO | PCUBED has found that if structured correctly to your organization, requirements, and its appetite for data maintenance, resource demand management can deliver exceptional returns.
Demand vs. Capacity
Resource demand management aims to match incoming work (demand) to the business unit’s ability to deliver (capacity). Achieving the right balance underpins a productive and sustainable business operation, but unfortunately it is also one of the most elusive organisational competencies to master. Driving a bus along a highway is simple enough if you have the appropriate visibility (through the windscreen) and controls (steering wheel, brakes, and accelerator). In comparison the resource management “highway” is fraught with bumps, the occasional kangaroo (at least, here in Australia), and most managers have to travel this road blindfolded and hog-tied to boot!
At the core, balancing demand to capacity is all about exercising timely controls. The table below shows some examples of how the demand/capacity equation can be balanced using effective management controls.
This further exposes a keystone of effective demand management: The appropriate level of management – people who can execute the controls – must be actively engaged in the process.
Setting Appropriate Detail in Resource Planning
Most executives would love to be able to put their hands on a detailed view of the forward demand and capacity for every team member into the distant future. After all, that would allow them to reallocate or prioritize work, or hire extra staff, well before any pain became real! Unfortunately, this is simply unachievable as most organizations’ work programs are highly dynamic, and managers find maintaining an up-to-date plan proves too time consuming and costly.
In reality the resource planning horizon only needs to provide a forward view sufficient to cover the demand/capacity controls being undertaken (often set by procurement windows). For some organizations this may be as few as four weeks (to engage suitable contractors, for example); for other organizations this may be 12 months or longer (to receive budget in the annual operating expense allocation).
In addition, the resource plan only needs to support a task-level detail for the next few weeks to support the day-to-day resource management decisions. The further you go into the future, the less detailed the planning needs to be.
The position of the line will vary from organization to organization and is largely driven by workload profile, operational agility, and the planning effort the organization can afford (area under the line). This will be an important topic for discussion with the sponsor before designing the new processes.
Resource Management Processes
In order to plan and manage resources for the entire forecast horizon, processes should be separated into distinct focus areas, each with its own stakeholders, process-flows, governance, and data requirements.
Typically for a one-year forecast horizon there are three focus areas:
- Resource Budgeting: Provides the longest-term and a sketchy level of planning detail. Forecast is typically made six to twelve months forward and modeled at Skill Fulltime-Equivalent (S-FTE) per Service per Month level of detail.
- Resource Forecasting: Provides the medium-term view and planning detail. Forecast is typically made one to six months forward and is modeled at Days per Person per Project per Month level of detail.
- Resource Scheduling: Provides the immediate-term and most detailed level of planning. Forecast is typically made one to four weeks forward and is modeled at Hours per Person per Task per Week level of detail.
It may be appropriate to lead implementation with one process (such as resource scheduling, for example). Just make sure all stakeholders understand and sign up to the limitations of a one-part solution. Implementing all three processes in parallel will provide a resource demand management solution for the entire planning horizon at the appropriate level of detail and minimum cost.
With this information in hand you should be prepared to embark on an exercise to design and implement appropriate resource demand management for your business unit or organization. Like all complex implementations it certainly helps to have experience on hand – our PMO teams can provide on site expertise to help guide you through the strategy, governance, process definition, tools, data, reporting, and organizational change aspects of your implementation.
A Final Point to Ponder
In our experience resource management processes strike severe (and terminal) resistance if applied with the intention to squeeze more productivity from staff. If there are productivity issues, then these need to be named and addressed separately from implementing new resource management processes and tools.
The ultimate gauge of success will be whether your changes are viewed as a valuable and positive contribution by all stakeholders in the process change.
This article was written by Richard Greenall, who indeed hails from Australia.
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