Balancing project demand and team capacity is an ongoing challenge requiring a few different solutions. In this blog, we share five ways to improve project resource management.
Organizations are too often faced with a common predicament – a relentless demand for their team’s resource capacity from an ever-expanding list of projects across multiple lines of business. Finding a balance between the capacity of your teams to work on projects and the constant demand for that capacity is a complex and substantial challenge that many organizations struggle with, especially now.
With today’s emphasis on remote work and distributed teams, managing project demand and team capacity has become an even bigger tightrope act than in the past. Alongside the speed at which the marketplace is evolving and greater project needs, you must also ensure effective virtual communication and address issues related to distributed team collaboration.
Project resource management has been a difficult task for project management leaders, even without modern challenges. Luckily, there are solutions you can use to lessen the challenge. We’ll review some of these solutions, but first, what makes resource management challenging?
The Hurdles for Effective Resource Management
A survey conducted by The Project Group found that resource management is the least established area of the project management office’s (PMO) responsibility compared to the other PMO functions. So, why is it that so many organizations don’t fully implement such a critical function? Here are three factors that make it a challenge:
- Prioritization Across Teams: One of the central challenges in effective resource management is project prioritization. In a complex organizational environment, multiple teams and departments often have their own agendas and projects. Without a unified approach to prioritization, team members may find themselves contending with conflicting priorities, leading to autonomous decision-making and potential risks to project commitments.
- Capacity Forecasting: Predicting available project capacity with a high degree of reliability is a daunting task. Team members’ workloads are seldom consistent and can vary significantly over time. Furthermore, the unpredictability of capacity projections makes forecasting a challenging endeavor.
- Coordination Between Project and Resource Managers: Effective coordination between project managers and resource managers is vital for managing changes in projects and available capacity. An ineffective partnership between these two key roles can result in resource capacity and demand falling out of sync, creating risks to the project portfolio.
Project Resource Management: 5 Solutions
While the challenge of balancing project demand and team capacity is a significant one, organizations have a variety of solutions at their disposal to address these underlying causes.
The specific approach may vary depending on your unique circumstances and needs. Here are some common solutions that organizations can employ:
1. Project Prioritization
Develop clear project prioritization frameworks, which will enable you to focus on the most strategically important projects. Such frameworks ensure that projects aligned with business goals take precedence. For example, is your organization primarily focused on saving money or avoiding big risks? Or do you need to stand out among your competitors? Answering questions like these will help you determine what’s most important as you build your frameworks.
2. Capacity Planning
Capacity planning involves forecasting future project demand and assessing your team’s time and resources to handle it. This allows you to anticipate and address constraints proactively. Is your company planning a massive project that will require a majority of your team’s focus? Or is there room for your team to take on more urgent requests? Carefully consider this information as you determine availability, as it could impact your team’s success and room for growth.
3. Project Portfolio Management (PPM) Software
PPM software enables the centralized management of all projects to ensure alignment with organizational objectives and optimal resource allocation. It plays a crucial role in identifying and addressing resource bottlenecks by providing real-time visibility into resource availability and aiding in optimizing resource allocation. Being able to visualize team capacity will help you determine when and where there are open spots for more demand.
4. Data, Analytics and AI
Using data and analytics can help you develop valuable insights into resource capacity and demand. Data-driven insights provide a solid foundation for resource allocation decisions. For example, using a tool like Power BI or the previously mentioned PPM Software, you could analyze your project demand and team capacity against your previous year’s data.
You can also go a step further by using that data in conjunction with AI tools to predict capacity constraints and optimize resource allocation. These technologies can analyze historical data, project demand, and team member capacity to make real-time recommendations for resource allocation.
5. Agile Collaboration
Effective collaboration creates an environment where teams can work together more seamlessly to address challenges related to project demand and team capacity. Encourage your teams to tackle projects together and embrace agile tools and techniques, helping them become more flexible and efficient so that they can adapt more easily when internal needs require them to take on multiple projects.
More often than not, organizations don’t rely solely on one solution but opt for a combination of several approaches. This holistic approach recognizes the challenge of balancing project demand and team capacity, which is an ongoing process of refinement and adaptation.
Say, for instance, if you use the data from your PPM software with an AI tool, then you’ll have a strong idea of how your team might be able to work this year. But when you layer agile collaboration on top of that so your team is working quicker than they were last year, you may be able to input that information in your AI tool to determine your team’s change in capacity. Then, with your project prioritization framework in hand, you can more easily determine exactly which project can fill in your newly acquired timeslots.
For example, an organization was in the midst of a long data warehouse project that was consistently being sidelined by competing priorities. The PPM tool allowed the organization to identify a four-person pod that would be available for four weeks and helped identify the velocity of the team. The AI-based tool helped quickly analyze and select epics and features from the PPM tool that was the highest priority. The team executed this mini sprint, which brought in immediate revenue for the organization and allowed the initiative to create value while the full project was still in flight.
By consistently fine-tuning project resource management practices, you can optimize resource use, ensuring that your projects enable — rather than block — strategic objectives. This alignment ultimately leads to successful project delivery and contributes to organizational success.
In Pursuit of Balance: Project Resource Management
Your organization must remain vigilant in its pursuit of balance. The business landscape is continually evolving with new technologies, changing market dynamics, and shifting customer expectations. This means that the challenges related to project demand and team capacity are not static — they require ongoing attention and adaptation.
Balancing team capacity and demand for effective resource management is not only a challenge, though — it’s an opportunity. It’s an opportunity to enhance agility, boost efficiency, and ultimately drive greater success in a dynamic and competitive business world.