Capacity management addresses what types of resources are needed, how many are needed, and when resources are needed to support portfolios, including ongoing optimization to maximize utilization and minimize conflicts. It also seeks to address conflicts related to the resource demands of portfolios and their respective components.
The key element: One important element of capacity management is resource capacity planning. It entails the forecasting of resource demands and the available supply of resources for portfolio execution based on the available information in the portfolio roadmap, strategic plans, historical data, etc.
Resource capacity planning is a critical function of portfolio management. Organizations commonly want to understand resource availability because every company has a limited number of people. Resource capacity planning is about comparing future resource utilization of project resources against available capacity to do work. Utilization is the amount of effort a person spends on work (project work, operational work, etc.) during a given amount of time. Capacity is the standard amount of time available to do work. In order to accurately measure utilization and capacity across the portfolio for each resource role the following are needed:
1) All the projects in the portfolio
2) The forecasted utilization for that role for each project in the portfolio for a given timeframe (e.g. monthly).
3) The amount of non-project work time for that role for a given timeframe (e.g. monthly).
4) The standard available working time for that role (typically 40 hours per week)
Collecting this information for a given resource pool is at the heart of capacity planning and enables us to answer two fundamental questions:
– When do we have capacity to commit to additional work? (portfolio-oriented)
– Are resources available to complete our committed work? (project oriented)
The Portfolio Oriented View of Resource Capacity Planning
The first question above is portfolio-oriented in nature to help senior leaders on a portfolio governance team understand when new project work can be initiated with available resources. Understanding resource availability informs whether new projects can be successfully completed on time, on scope, and on budget. If a project is initiated when there are inadequate resources, it often requires some of those team members to work above their available capacity or they work less than the project forecasts which in turn extends the project and results in extra multi-tasking.
The Project Oriented View of Resource Capacity Planning
The second question “are resources available to complete our committed work?” is a project-oriented view. The focus is on a single project and whether there are any new resource shortages or constraints that would prevent the team from hitting their schedule, scope, and budget targets. The same resource data used to compile the portfolio level view can also be used to drill down to a single project view and give the Project Manager a look ahead to identify potential constraints or resource gaps.
Sources:
PMI, The Standard for Portfolio Management, 4th Edition
https://acuityppm.com/ppm-101-the-challenges-of-resource-capacity-planning/
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