According to a study, “53% of decision-makers consider enterprise resource planning as a crucial investment for their business.”
Resources are the most high-priced investments for an organization. On that account, utilizing the workforce to its maximum potential becomes indispensable. That’s where resource planning comes in.
Whether you want to scale your operations or withstand the changes in the dynamic business ecosystem, creating a resource plan is a must. In addition, resource planning eliminates the guesswork and ensures that projects are suitably staffed beforehand. When followed precisely, resource planning aids in enhancing productivity, project performance, and profitability.
This blog provides tips to create an efficient workforce with resource planning and how SAVIOM‘s resource management software can help.
But before that, let’s have a look at the basics.
1. Resource planning – definition & significance
Resource planning is a systematic process of identifying, forecasting, and allocating business resources efficiently across various projects at the right time and cost.
A well-grounded resource plan provides visibility into current resources and their attributes, such as availability, capacity, demand, costs, skills, and utilization. When paired with demand forecasting, it facilitates competent allocation and eliminates last-minute firefighting. In addition, it provides managers with a clear picture of resource excesses or shortages, thereby helping them implement the right resourcing treatments to bridge the capacity gaps ahead of time.
Moreover, effective resource planning enables organizations to leverage cost-effective global resources and reduce project resourcing costs. It also helps forecast and maximize the resource utilization, enabling you to mobilize them from non-billable to billable or strategic projects. Finally, an intelligent resource plan ensures the successful delivery of the project on time and within budget.
Now that we understand resource planning and its benefits let’s see how it can help build an efficient workforce.
2. 5 steps to create an efficient workforce with resource planning
Here are the ways to create an effective resource plan.
2.1. Foresee and bridge the demand gap ahead of time
Resource planning empowers organizations to anticipate the project requirements and analyze the existing capacity. It enables them to identify and fill the demand gaps proactively with appropriate resourcing treatments. For example, when there is a resource excess, managers can bring future projects ahead or sell excess capacity aggressively. On the other hand, for resource shortfalls, managers can initiate upskilling, out-rotation & backfilling, or planned hiring to meet the project requirements.
2.2. Ensure competent and cost-effective resource allocation
Effective resource planning aids in the effortless allocation of competent resources to projects based on skills, experience, qualifications, availability, and other criteria. In addition, by gaining comprehensive visibility into the organizational talent pool, managers can allocate skilled employees from low-cost locations. Therefore, by leveraging an economical workforce, organizations can control project resourcing costs and boost business profitability without compromising quality.
2.3 Create the right mix of blended resources
Resource planning helps in creating the right band mix of senior, mid-level, and junior resources for every project. It enables managers to assess the nature of skill requirements and determine if the skill demand is a short-term or long-term demand. Depending on that, they can leverage a permanent or on-demand workforce. Hence, resource planning ensures that the talent pool is optimally balanced in terms of experience, expertise, and skills to meet the project demand.
2.4. Maximize the productive utilization of resources
The billable hours delivered by employees play a crucial role in enhancing the profitability of an organization. With resource planning, managers can ensure that the resources are involved in billable or strategic work instead of non-billable activities. For example, a senior accountant of an audit firm remains engaged in BAU, such as meetings, data entry, etc. In such a scenario, the resource manager can move him from non-billable activities to billable projects to improve profitable utilization. This will boost employee productivity and enhance business profitability.
2.5. Manage sudden ramp-up and ramp-down effectively
Resource planning enables organizations to be more agile and responsive to unexpected ramp-up and ramp-down in project requirements. It helps managers forward plan for ramp-up activities with appropriate measures such as out-rotation & backfill strategy, allocating benched resources, etc. Similarly, it also helps managers anticipate when resources will be released and find appropriate billable activities for effective ramp-down management.
2.6. Formulate a training & development plan
Formulating a training and development program is an essential aspect of resource planning. First, managers must analyze the organization’s current and future needs and identify skill gaps in the workforce. For example, the resource manager can collaborate with the sales team to understand the upcoming project needs. Based on this information, they can design a training and development program that mitigates the gap and creates a future-ready workforce.
2.7. Implement succession planning for critical roles
Resource planning plays a significant role in building and implementing a succession plan for critical roles. Managers can assess the skills and competencies required for key positions. Then, with the help of an up-to-date resource inventory, they can identify employees who have the potential and can be upskilled for these high-level positions. This ensures that the organization has the right people to achieve the strategic goals, even when key individuals leave the organization or retire.
The following section describes how resource management software can help.
3. How can advanced resource management software help?
With the help of advanced software, you can bring all the resource-related information into one place and manage resources efficiently. Here is how Saviom’s advanced resource management solution can benefit your organization:
- The tool’s 360-degree visibility and advanced filters facilitate the allocation of competent resources to the projects. It also enables managers to assign cost-effective resources across matrix boundaries.
- The advanced forecasting and capacity planning capabilities allow managers to identify and mitigate demand vs. capacity gaps.
- The tool also provides a competency matrix that helps design training & development programs and succession planning strategies.
- The utilization reports and color-coded heatmaps help identify instances of under/overutilization and eliminate them using optimization strategies.
- The people on the bench and project vacancy reports enable managers to mobilize idle resources to billable and strategic work and improve productivity. Moreover, these reports help in the effective management of sudden ramp up and ramp down activities.
- Lastly, the what-if scenario-building technique helps compare various resource allocation scenarios to arrive at the most appropriate resource plan.
These features help streamline resource planning and build an efficient workforce.
Effective resource planning prepares the firm for market volatility and keeps it sustainable in the ever-changing business world. The ways mentioned above, paired with the right resource management software, can help you build an efficient workforce with resource planning.