It is your favorite time of day/month/year; time to RESOURCE PLAN! Okay, maybe not your favorite time after all. Maybe you dread it like the approach of tax preparation season. I can’t change that (something Benjamin Franklin knew well); I can offer some suggestions on things to consider and hopefully lessen the burden that resource planning brings to the business leaders.
Frequency of Resource Planning
How often do you do perform resource planning? How often should you perform resource planning? Businesses that rely heavily on logistics should plan more often — think FedEx or a restaurant — as gaps in resources available significantly impact their ability to deliver their product. Business that change very little (scale, size or volume) do not need to plan as often. In addition to the more “macro” consideration mentioned, it will likely make sense for your organization to perform detailed bottoms-up resource planning on one frequency and a higher level tops-down forecast on a second (less frequent) basis. By combining both approaches you should achieve learning from each cycle that hands off to the other.
What information do you need to be successful? Is all the information numerical? How easy is it to obtain (at the frequency & data staging that you need)? Similar to the suggestion above, combining multiple data types into your process should be your goal. There will be data driven numbers that you can easily check vs. your metric — individual utilization % — and other information that is not easy to quantify — “when will our new product launch?” The various data points can be incorporated into one central repository that is used to generate your current plan.
Where is your organization now?
The first layer you will probably want to apply in the analysis is an understanding associated with the current state. Based on the resources that you have, are they busy or not busy? What types of tasks are those resources busy with? Are they the right tasks (aligned with goals, objectives and incentives) or not? How does this data point compare to the appropriate metric (i.e. 60% current utilization vs. 85% utilization metric)? This will provide your first indicator towards increasing/decreasing resources.
Stay cognizant of future changes
The second layer should be determined by information that is less easy to quantify. For instance, layer one may have indicated that your help desk resources are not busy right now, but you know that a new product is about to launch and there is expected to be a significant increase in trouble ticket volume starting next week in support of the product launch. You are expecting that the demands on your resources is about to change and you have already planned your resources to include that. Your primary metric (i.e. 60% current utilization) may not take into account strategic efforts your resources are currently involved in. Adding some judgment and perspective into your analysis is advised.
Incorporate predictive metrics into resource planning
The third layer should incorporate a predictive metric into your process to identify red or green lights for your organization. In the SaaS environment, one example of this is the Magic Number, which uses recurring revenue figures and Marketing & Sales spend to make a recommendation to either slow down (magic number < 0.75) or speed up (magic number > 0.75) their Marketing & Sales spend. Another predictive measure would be the seasonality curve in the retail industry — you can count on the increase in business as the holiday season approaches (and the drop-off that follows it).
In summary, resource planning is an ongoing task with many factors to consider. You will need consistent data on a regular basis and you will incorporate the various data points into your analysis in layers. Let me know what areas of resource planning were on or off the mark with your comments.
What areas of resource planning were on or off the mark in your experience?