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Why Should I Use Capacity Planning in Project Management Software?

Capacity is defined as the ability to achieve something — it’s the maximum you’re capable of producing, handling, achieving, storing, etc. For instance, a bucket with a 25L capacity can store up to but no more than 25 liters. In terms of project management, capacity typically refers to the maximum amount you can produce or accomplish within a normal working schedule, with a fixed amount of resources.

Capacity planning is the process of determining how to organize your resources so that you optimize capacity. The ideal scenario is that you can arrange your project schedule so that your team achieves as close to maximum capacity as possible for as long as possible. After all, the closer you can get to capacity, the faster the project gets completed. But you don’t want to go over capacity and burn out your team.

Project management software capacity planning is more than just resource smoothing. Not only do you want to ensure the scheduled workload is optimized for the number of resources you have, but you also want to make sure the right resources are assigned to the right job.

This means ensuring you have people with the necessary skill sets, and that the best available people are assigned to each task. For instance, you don’t want to give an experienced team member a simple task they’ve already done a hundred times while entrusting a project-critical assignment to a brand-new employee.

Why capacity planning is important

Here are 3 reasons why it’s critical to conduct capacity planning in your project management software:

  1. Capacity planning improves your overall project plan
  2. It increases overall project efficiency
  3. It improves the strategic planning capability of your project management software
It improves your plan

Capacity planning is a significant part of resource management, and you can’t create a robust project schedule without doing resource management.

Assigning resources to your schedule is a basic part of project planning. And while you can choose to initially assign generic resources, this opens you up to risks. For instance, what if no one is available with that skill set during the period you’ve scheduled the work?

Capacity planning ensures you have the people you need when you need them, and that you don’t have valuable people just sitting around waiting for work.

Plus you avoid the hassle of scheduling people and then finding out that they aren’t available after all, decreasing your chances of on-time delivery.

It improves efficiency

Capacity planning lets your team know what they’re working on in the short and long term. Knowing they have stable work can reduce stress and optimize performance.

Plus proper capacity planning helps you avoid burning out your project team with too much work. When employees are over-allocated, morale may lower and productivity can suffer.

Planning out tasks for your resources in your project management software means that they see what’s coming up on their task list. Since team members know what work is coming up, they can prepare for it and transition between tasks and projects faster.

Company-wide capacity planning enables your organization to take a wider view of the resources available to projects. Often, better visibility of who is free allows managers to maximize their utilization.

For instance, imagine Sally and John are both engineers with similar skill sets and levels of experience, and they’re both spending 50% of their time on Project A and 50% on Project B. Capacity planning can highlight this, allowing you to reassign them so that Sally is 100% focused on Project A and John is 100% focused on Project B, which will make them both more productive. 

It improves strategic planning

Capacity planning is important at the project level, but it has even more value for the company as a whole.

For instance, long-term capacity planning can help your company manage the level of resources they keep on hand. Imagine that several projects have requested the same resources for the next 2–3 years, and you don’t have enough people available. Knowing this in advance, executives now have the time to either contract or hire people with the required skill sets.

Alternatively, if management sees that there is no need for a certain skill set on any project for the next 6 months, they can decide the best way to handle it.

Enterprise-level capacity planning in project management software also allows executives to ensure their best resources are on their most critical projects.

Imagine that your executive team has a high-priority project about to launch, and they want Carol to run it. With capacity planning, they can not only see if she’s available but see every project manager’s schedule at once. So if Carol is already managing another project, they can easily tell who may be available to take it over from her, and what the impact on the project and the business would be.

Capacity planning also helps the executive team determine whether there is enough capacity to take on additional projects. For instance, they can see that a marketing project is ending next month so that team will be free to take on something new. But they can also see that they have no one available to work on any new software projects for the next 12 months. 

Benefits of project management software capacity planning

Project management software capacity planning helps you visualize and manage your team members’ workload capacity and skill sets. Then you can assign and prioritize tasks based on that information. Without software, you’re relying on manual efforts to track capacity, and you may be unaware of potential issues or skill sets.

Effective capacity planning requires a single resource pool where all relevant project and team managers can track people’s availability and skill sets. Project management software provides a centralized database that makes this level of transparency possible.

For instance, looking at an organizational chart, you may just see that you have five engineers. But within project management software, managers can classify engineers based on their skillset, or level of experience. So instead of randomly picking one of five, you can now see that two are level 3 and three are level 1 and then assign tasks appropriately. 

What if you work in a matrixed organization where functional managers assign the employees to your team?

In this scenario, you can use comments or custom fields within your project management software to classify tasks as requiring an experienced engineer or a junior engineer. Then when you submit a resource request, the functional managers can assign employees appropriately.

Project management software also enables everyone to track availability in real time. This means you’re not making decisions based on out-of-date information.

For instance, when you’re relying on stale reports to assign resources, you may not be aware that someone else just claimed the same person for the same period. Or that an employee just scheduled their vacation for the exact week you were planning on assigning them to your project.

Further Reading
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6 Questions to Ask When Evaluating the Best Software for Project Management

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Overcoming the Challenges of Resource Management in the Digital Era

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Wrike Resource: A Powerful New Resource Management Tool