What is Resource Planning?

Resource Planning is about identifying, forecasting, and allocating resources within an operation or business. The aim of Resource Planning is to ensure the effective utilisation of resources and it is an integral part of service companies and projects.

Resursplanering illustration

Resources are not just human resources. They can be technical and administrative resources, materials, equipment, and office space. Physical resources are often more relevant to manufacturing companies. Of course, money is also a critical resource for all operations, although it is rarely the focus when discussing Resource Planning.

According to McKinsey, and 83 percent of decision-makers surveyed, strategic resource management is most critical for growth - even more important than operational efficiency and mergers and acquisitions. Yet, only a third of the companies surveyed redistribute just 1 percent of their capital annually (the average is 8 percent). Here, personnel and skills are a significant part.

Resource Plan Staff

Projects often heavily influence resource planning. Projects come and go, causing a redistribution of resources within the operation. Therefore, there is a natural need for resource planning in project-based operations.

The revenue model of consulting firms is strongly linked to how well they manage to allocate their consultants' time in projects and administration. Low staff costs, high productivity, and high flexibility, combined with high-quality delivery, are becoming increasingly important as digitalisation advances and markets become more international, thus more competitive.

There is much to consider for someone responsible for personnel at a service company. Availability, desired working hours, budgeted hours, revenue targets, project allocation, laws and regulations, are just a few examples. Identifying the necessary skills and how to best utilise them is also important.

For example, to be able to resource plan a project, you need to:

  • Gather input about expectations, needs, challenges, and risks from the customer, your team, and other stakeholders when planning. Set goals collectively.
  • Learn from how you or others have done in the past. The most effective service companies have structural capital that builds over time and creates increasingly efficient projects.
  • Build a clear timeline with important deadlines and deliverables, and/or use one or more software tools to support planning and communication.
  • Identify the resources you need and when you need them. You also need to identify if there are missing resources (such as skills) and how you will ensure to bridge the gaps through, for example, subcontractors.
  • Identify when and how you get the resources you need. As a Project Manager, you will need to ask for the human resources from line managers or consultant managers. Dialogue about capacity, availability, skills, and risks.
  • Analyse the feasibility of the project's expectations, if the project is feasible, and if there are risks of not being able to meet project objectives.
  • Develop a comprehensive project plan but be prepared to reassess your plan along the way.

Resource Planning with a Software

Service companies work extensively with utilisation because they sell knowledge through consultant hours. They are also good examples of when resource planning is a necessary part of operations management.

Using their planning tool, the managers in the operation can gain better insight and control; manage the consultants' hours more effectively, see a real-time view of outcomes, plan for holiday peaks, optimise and manage risks around utilisation, and identify time thieves among tasks.

The consistency and communication opportunities in a resource planning tool save managers time. Getting the planning visualised and being able to work on it together results in significant time and efficiency gains.

It is possible to link your resource planning system with a system that manages broader planning (Hypergene), allowing for more extensive analyses and follow-ups and working with KPIs and key figures.

If you're using an all-encompassing solution, it's possible to link your resource planning with budgeting, Risk Management, Scenario Planning, Goal Management, and Strategic Planning. You see the relationships you need to see and get a broader basis for forecasts and analyses. Transparency, collaboration opportunities, and understanding are also expanded, often with the help of one or more Controllers.

Excel is commonly used as a resource planning tool, which often leads to challenges. Excel is a fantastic tool, but it's not a planning tool.

Hypergene provides flexible support for Driver-Based Resource Planning, integrated into Hypergene's framework for the Budgeting & Forecasting module. Here you will find built-in configurable support to manage both the cost and revenue side in a smooth configuration via a self-service interface.

A selection of features includes:

  • Support for different resources.
  • Management of central surcharges (for instance, pension surcharges).
  • The ability to work with various types of absence.
  • Built-in calendar function and hourly price list for managing revenue generation.
  • Support for various accounting rules.
  • The ability to work with different models to populate proposed data.

10-minute video demo of Hypergenes solution: