Resource forecasting is a powerful tool in project management. When done correctly, it allows you to anticipate upcoming work, schedule start times, and allocate the right team members. Think of it as your real-life superpower, granting you the remarkable ability to see the future of your projects with clarity and ease.
This guide is all about explaining the nitty-gritty of resource forecasting. We'll break it down into easy-to-follow steps and share some valuable tips. Plus, we'll highlight how tools like Float can be your allies in this process.
Stick with us, and together, let's unleash your project management superpowers!
What is resource forecasting?
Resource forecasting involves assessing upcoming projects, determining the level of effort they require, and comparing it with the resources you currently have at your disposal.
To effectively forecast resources, you need to:
- Comprehend the requirements of your upcoming projects, including the necessary skills to execute them.
- Understand your current team members' capabilities and career aspirations, helping you decide whether to involve them in these projects.
- Estimate the duration of project execution based on the staffing approach you choose.
- Formulate a plan to bridge disparities between the required resources and what's available.
In large organizations, resource managers usually handle this task. In other setups, it might fall under the responsibilities of project managers. The latter often have a unique advantage as they regularly interact with team members and are familiar with clients' needs, making them well-equipped to align resources with projects.
When I led a team of 15 people in my strategy consulting days, resource forecasting was vital to my job. In addition to determining how many hours it would take to execute the projects in my portfolio, I was responsible for ensuring that team members met our company's target threshold for billable hours to avoid team members being underutilized or overutilized.
More importantly, however, I was responsible for my team's career development. Were they happy and fulfilled in their jobs? Were they motivated to deliver high-quality work?
Resource forecasting was critical to understand each team member's short-term availability (3-6 month timeframe) and help us plan for any expected gaps in work. It would also help us match team members with projects that would keep them engaged, develop their skills, and ultimately grow their careers.
Did you know?
Resource planning is not a one-size-fits-all process. Resource forecasting gives you the big picture, assessing the required hours and skill sets, including equipment and materials. Then you drill down to workload forecasting, estimating the projected hours for each team member. Together they form a comprehensive resource plan.
The benefits of resource forecasting
Resource forecasting has numerous advantages for organizations:
- It provides a clear view of the project pipeline, ensuring that project selection and prioritization match the organization's strategy.
- It allows ample time for making important staffing decisions, such as hiring or letting go, and creating contingency plans based on expected project needs, enhancing project delivery.
- It considers employees' career goals when assigning projects, which can boost employee engagement, reduce staff turnover, and lower costs.
- It encourages financial responsibility by providing insights into anticipated revenue, which can guide operational decisions and affect spending.
What are the steps in the process of forecasting resources?
When forecasting resources, these are the steps to follow:
- Define your upcoming project pipeline, noting when work is expected to start and its likelihood of happening. Validate this data with project stakeholders, such as your sales or business development teams.
- Estimate the effort needed to complete the work, including the required skill sets. Consult historical data, experience, and other relevant information to inform your project estimates.
- Compare your project estimates with the resources you have available. Check who's available during the projected timeframe and whether their skills match the project's needs. You may need to consider adding to the team if there's a mismatch.
- After making a plan, validate and refine your project estimates. Speak with proposed team members to confirm their interest, availability, and the feasibility of delivering on the project. Also, plan for contingencies, such as a critical team member leaving.
- Finalize your plan and get approval to address any gaps in your resource forecasting, like needing additional budget to hire more staff.
Your resource forecasting plan could be as straightforward as a small table. It's a great way to organize and visualize your data, making managing your resources and planning your projects more accessible.
Project | Timeline | Skillset / Role | Person | Estimated Hours |
|---|---|---|---|---|
A | February - June | Engineer | Jessie | 60 |
A | February - June | Project Manager | Zack | 100 |
B | March - May | Business Analyst | Maham | 75 |
B | March - May | Designer | Mariana | 120 |
B | March - May | Project Manager | Zack | 50 |
Six challenges of resource forecasting and tips to resolve them
Resource forecasting is integral to project management, but it can present some challenges. Here are six common hurdles you might encounter and advice on how to overcome them:
Challenge #1
You're concentrating on project execution and failing to allocate sufficient time for business development, leading to a lack of visibility into future work.
Solution: Consciously devote time and resources to build up your organization's sales capability. This may mean recruiting a dedicated sales team or upskilling your existing team members to seek, track, and follow new opportunities. Building a robust pipeline of upcoming projects will give you a clear understanding of future work.
Challenge #2
You're not entirely clear on your team's skill sets, and with frequent staff turnover, you struggle with planning for future projects.
Solution: Now is the time to invest more heavily in your team. Enhance your middle management and improve the overall workplace experience. Fostering a positive environment and clear career progression paths can significantly boost employee engagement and retention, leading to a more stable and knowledgeable team.
Challenge #3
You find yourself scrambling to forecast resources at the last minute, making real-time staffing decisions that could become costly mistakes.
Solution: Integrate resource forecasting into your regular project planning process. By understanding the scope of upcoming work, you can appropriately allocate staff from your existing team or through new hires. Forward resource planning eliminates rushed decision-making and contributes to smoother project execution.
Challenge #4
You initially forecast resources as part of your project planning but don't maintain regular updates. This leads to your forecast information becoming outdated quickly.
Solution: Assign a specific person or team to refresh your resource forecast, maybe every month regularly. Regular updates will ensure you always have a current outlook on your resources for the coming months.
Challenge #5
Your resource forecasts are somewhat subjective and based on insufficient data, especially when undertaking unfamiliar projects with a new team.
Solution: Collect and analyze performance data to refine future estimates as your project progresses. The more data you have, the more accurate your forecasting will be, gradually reducing the amount of guesswork involved.
Challenge #6
You have a resource forecast but fail to take action on its findings due to a lack of alignment among various stakeholder groups.
Solution: To bridge this gap, actively involve key decision-makers when examining resource forecasts. This should include individuals responsible for hiring decisions, those with budget authority, and those overseeing project planning and management. Their combined insights can help translate your forecasts into practical, effective plans.
How to forecast resources using Float
Alright, you've gotten to grips with the basics of resource forecasting and the challenges to watch out for. Now, let's dive into how a resource planning tool like Float can make this process much smoother.
- Setting up your project pipeline and effort level: Float is like your project portfolio warehouse. It's where you can store all your current and upcoming projects. It gives you an overview of each project, the expected timelines, and the estimated effort needed.
You can use Float to generate various reports providing valuable insights into past project execution. For instance, you can run a project budget report to see the expenditure of past projects. This kind of retrospective analysis can help you make more accurate predictions and better decisions for your future projects.
- Understanding resource availability: Float helps you assess the availability of your team members for upcoming projects.
- Verifying and refining estimates: With Float, you can track team members' skill sets and match them to specific projects. Remember to validate your assumptions by talking to team managers or stakeholders to ensure your estimates are on track.
- Addressing resource gaps: Once you've drafted your initial plan, Float can help you spot discrepancies between your planned work and available resources. Spotting these gaps early gives you a head-start in identifying the necessary steps to bridge them.
Resource planning made easy
Forecast and allocate resources, plan your projects with confidence, and monitor timelines and billable hours, all in Float.
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And there you have it—a comprehensive look at resource forecasting!
Mastering this process can significantly enhance your project management skills, and with tools like Float, it's more manageable than ever. Effective forecasting can improve project delivery, boost team morale, and contribute positively to your organization's bottom line.
So take a leap, start forecasting, and let your inner project management superhero shine. Here's to a future filled with well-run projects, content teams, and greater productivity!
