Capacity planning is about balancing supply and demand, the people and things you need to get your projects done (on time and on budget), and the available work capacity. This notion of balance also concerns your team and the profitability of your company. What exactly is the difference between capacity planning and resource planning? And how do you make the capacity puzzle fit perfectly?
What is capacity planning?
Project capacity planning is the process of examining whether an organization has the people and resources needed to complete a project. Unlike resource planning, the focus here is on the deployment of staff. This means answering the following questions: Are there enough people available? How much time do they have for the project? Do they have the required skills? By doing this in advance, you can anticipate and adapt if necessary: change work schedules, adjust vacations or bring in additional staff.
Once you have completed this capacity planning phase, you can begin to plan resources: define deliverables for each task and assign them to people, based on their skills and the time available.
Why is capacity planning important?
A good capacity planning allows you to correctly estimate the duration of a project, to forecast your budget and to know exactly which people and resources you need. This avoids bottlenecks, wasted time, resources and money, as well as delays or shortages for your customers.
"In the past, we would take on a project, put all our energy into it, and on the second-to-last day ask the client if they could push the deadline just a little bit. Today, we have bigger clients, bigger budgets and longer projects. With Teamleader Orbit, I can now see at a glance what everyone is doing, who has time on their hands and who is fully occupied." - Glenn Fellows, Lunar's Managing Partner
Balancing your employees' workloads and assigning people with the right skills to the right tasks also results in satisfied and productive employees. They will be less likely to quit due to illness or burnout. They also won't be left behind unnecessarily in an unprofitable manner.
"The challenges Digitag faced before Teamleader Orbit was the multitude of tools for project management in the broadest sense," explains Quentin. "We had one tool for project management, one tool for time tracking, one tool for invoicing, one tool for everything CRM sales. It just wasn't possible anymore. When I noticed that there were different tools to be able to deliver and complete a project, I said to myself that we absolutely had to find another solution." - Quentin - Digitag
4 steps to get started with capacity planning
This management process can be roughly divided into four stages.
Step 1: Review the project backlog
What are the upcoming projects? And how many FTEs do you need to complete them?
Step 2: Determine Available Capacity
Review your current capacity at the company level, by team and by employee. Is it sufficient for all planned projects? Will you need to hire staff or freelancers in the coming months?
Step 3: Determine subtasks, task order and priorities
What is your goal? What are your milestones and subtasks for each project? What steps are a priority? What do you need to address first, before you can move on to the next task?
Step 4: Assign tasks to teams and employees
How do you allocate tasks to your teams? Who is responsible for each subtask? Set deadlines for each step and assign them to your employees.
What are the hardest things that entrepreneurs face most often?
From conversations with our clients, it is apparent that when planning capacity, they often face the following issues:
Projects that are not completed on budget or on time;
People being sidelined, which reduces profitability;
Overworked team members;
Senior (more expensive) profiles who have to step in to save a project, causing the company to lose revenue.
Without tools, capacity planning is a very complex puzzle. That's why companies working on larger, long-term projects often use capacity management software, such as Teamleader Orbit. This helps to clarify planning, subtasks and milestones, making it easier to identify bottlenecks and take timely action.
With Teamleader Orbit you can, among other things:
Determine the net capacity of your organization over a given period;
Determine the capacity of a project. Do you have enough people? Do they have the right skills? Can they do what you planned or do you need to make adjustments? Are there problems with certain tasks or steps?
Change your schedule smoothly. You can assign different people to your projects, intervene when the workload becomes too heavy for some employees, and thus adapt the feasibility of your processes;
See where there are shortages and make hiring decisions. What will be the workload of your development team in the next three months? Will your employees have to put in extra effort? Would it be better to bring in freelancers to get things done?
Want to know if your company can increase profitability through better capacity planning?
