Written by Maureen Carlson, Partner at Appleseed Partners
#2 and #3 Characteristics of Mature Organizations in the Areas of Capacity Planning and Resource Management
Last time in part 1, I provided an overview of the six characteristics of mature organizations based on a new research study into the state of capacity planning and resource management as well as detail on the first characteristic surrounding the importance of visibility and insight. In this blog, I dive into characteristics #2 and #3, why they are important, and how to address them to move up the maturity scale.
These characteristics are tangible approaches that leading product companies are using to be successful! Read on…
- Have insight into what people are working on, can identify bottlenecks, and run scenarios on-demand to adapt to change
- Meld top-down with bottom-up approaches to capacity planning and resource management
- Have a dedicated function to run resource management and capacity planning activities
- Agree on these top best practices: prioritization; what-if analysis; executive buy-in
- Estimate projects well and have good supporting processes in place
- Use project portfolio management software to optimize their resources
Characteristic #2: Meld top-down with bottom-up approaches to capacity planning and resource management.
In the survey, participants were asked if they use top-down, bottom-up or a combination of approaches for their capacity planning and resource management. More mature organizations on the scale were 15-22% more likely to use a combined approached and meld the two; and more than half of mature companies take this approach overall.
This means that leading product companies don't typically separate capacity planning and resource management as independent activities. In fact, they marry the two so that they can achieve higher benefits and make better, informed decisions. While resource management typically focuses on in-flight, active assignments, capacity planning is looking further out into the future to plan for how to meet demand. But taking the time to connect the dots during the planning and estimation process is important to ensure that the resources will be available when the time comes to develop the product. Seems like a good idea, huh?
Let's look at a vignette of a mature company that ties these efforts:
AVP of product development at a medical device manufacturer is working with executives on a budget that considers how to utilize resources across products lines. As they prioritize demand and ideas, they work together with their product managers and sales leaders to understand the competitive environment, customer requests, and industry drivers -- from there they vet out the new ideas. Once the ideas are prioritized, the budget is established with initial swags (effort, projected revenue, timeline etc.). It is here, that the device manufacturer (unlike most others who would forge ahead) advances a step further before completing the budget. They work with resource management leaders to get a bottom-up estimate on the total cost of development, effort, and schedule considering the resources they will require while taking into account the current and future demand and timeline expectations. The holistic approach helps them arrive at well thought out decisions, making them less likely to have too many projects for their resources that inevitably creates difficult downstream issues such as delaying time to market and negative impact on revenue.
All of this reminded me of when I went riding on a tandem bike this summer with my 11-year-old daughter. Not for the faint of heart by the way! I thought about the importance of working together and communicating less we end up in the ditch! It sounds so practical that these efforts around planning and resource management must take place in tandem. If you are going to go the right direction and increase momentum to use resources productively on the highest value work, it's time to get in sync and make it a priority.
Characteristic #3: Have a dedicated function to run resource management and capacity planning activities.
The study shows that 67% of higher maturity companies have specific roles in place for resource management and capacity planning, contrasted by only 26% of lower maturity organizations. Establishing these roles was a top rated best practice by more mature organizations. That is just a huge statement on the importance of this very addressable area.
When organizations are looking to establish new processes and desire for its people to embrace technology consistently, there is often the need for a responsible champion. Someone has to show the way and the map to get there.
These roles and people are often instrumental to ensuring the company stays on the path to improvement on capacity planning and resource management. They set benchmarks and goals with the executive team, create checkpoints to make sure they are experiencing business value, or course correct when they run into roadblocks. Remember: this is a marathon, not a sprint to see value from addressing these areas, so you need focus and leadership.
The challenge is that for some organizations this is a chicken and egg scenario. They need to get vision and management buy in to create these positions, but it is these very roles that are often the champions who gain that buy-in.
How to set up these roles? There are dozens of ways that companies structure these functions. Some have a dedicated resource manager role; others establish a PMO that owns the process; and others give the responsibility to the project manager, while resources are working on a specific project. Regardless of structure, this should be someone's dedicated job. They should report to the management team and establish a vision and plan to intentionally move up the maturity model for capacity planning and resource management. It is wise to choose a senior resource manager or planner with strong communication and leadership skills, one who understands the value of implementing processes and the benefits of a centralized software solution, and one who has the ear of the executive team.
Leading product companies make it a priority to staff these positions with the right people.
For more information on this topic, download your copy of a new white paper from Carrie Nauyalis, new product development solution evangelist titled: Step-By-Step Guide: How to Move Up the Resource Management and Capacity Planning Maturity Scale.
I'd like to hear from you. How are you currently managing resource management and capacity planning in your organization and do you have a dedicated resource management function? Share you experience by leaving a comment below.