The 2014 State of Resource Management and Capacity Planning Report

Transcription

1 The 2014 State of Resource Management and Capacity Planning Report Mastering the Resource Dilemma: Five Key Practices of Top Performing Organizations Commissioned by Planview conducted by Appleseed Partners

2 The Resource and Capacity Dilemma Overcommitting and underutilizing resources has a domino effect of business impact on project timelines, business opportunities, customer satisfaction, innovation speed, cost containment, and resource efficiency. For years, organizations have pointed to the dilemma of overcommitting their resources as their top pain point. This dilemma is often characterized as an insatiable demand for new projects to grow the business, while sustaining the current state of business, all with a finite supply of shared human resources. While overcommitment is not always the culprit, many companies still wonder whether they are employing their resources to their highest potential or on the most strategic efforts. In the 2014 benchmark study on Resource Management and Capacity Planning, 480 planning and resource leaders from around the globe assessed their maturity in each of these two areas. Executives who participated in the research identified the following as the top business risks associated with not addressing resource management and capacity planning with improved processes and tools: Loss of revenue (51%) Missed business opportunities (51%) Dissatisfied customers or clients (28%) Awareness of these risks raises some key questions: How can organizations be confident that they will have the capacity to meet strategic business goals with their current, finite resources? And how can organizations ensure the right people are assigned to the right projects at the right time? 51% Executives indicated that loss of revenue is the top business risk of not addressing resource management and capacity planning with improved processes and tools to maximize the use of resources. While most organizations continue to ask these questions, the research reveals that more companies are starting to solve, and in some cases master, the resource management and capacity planning dilemma to their competitive advantage. These top performers share attributes and best practices that other organizations can emulate. 2

3 Key Takeaways Organizations that are solving the resource dilemma: 1. Understand that resource management and capacity planning are distinct but interrelated disciplines that require attention and improvement to advance resource efficiency and return on resource investments; 2. Have a holistic view into both resource capacity and pipeline demand; 3. Invest in the people, processes, and tools to improve in both areas with statistically significant reductions in pain points. Proof that the dilemma is solvable The benchmark study findings show that as organizations mature, their top pain points drop by 30 60%. An encouraging 30% of respondents from various functional groups and industries report having reached this higher level of maturity. These top performers use best practices that organizations at all maturity levels can analyze and implement to improve resource management and capacity planning maturity. A prevailing trait among mature organizations The leading indicator of higher maturity organizations is that they possess a holistic view into both pipeline demand and resource capacity. These organizations are 53% more likely to have this capability than their lower maturity counterparts. Why is this so important? Because each of these two disciplines is mutually dependent upon data from the other. Capacity planners need realtime visibility into resource capacity data to confidently make strategic pipeline and investment decisions. Resource managers need a view into incoming pipeline demand and detailed resource information to assign the right resources to the right project at the right time. Without a holistic view, organizations will continue to struggle with effective capacity planning and resource management and continue to experience business risks and missed opportunities. 53% Top performers are 53% more likely to have a holistic view into both pipeline demand and resource capacity than lower maturity organizations. 3

4 Why Read This Report The information in this report will help companies better deliver on their business goals with the most efficient and intelligent use of their resources. Organization leaders should use this report to assess and improve their team s ability to master their demand and resource capacity. This report reveals the top five practices of top performing organizations and provides interview summaries with participants at different stages of maturity. Each maturity level corresponds to three different mastery levels. Resource Executors correlate to maturity levels 1 and 2, Aspiring Planners correlate to level 3, and Capacity Masters correlate to levels 4 and 5. This report sets the foundation for the research findings and offers a summary of next steps for leaders at different maturity levels wanting to improve resource management and capacity planning within their organization. In this study Resource Management and Capacity Planning are defined as: Resource Management: the ongoing, tactical assignment of personnel to planned and unplanned activities, the selection and identification of resources, and the maintenance of resource data. Capacity Planning: the act of assessing resource availability during the project selection and prioritization process considering resource proficiency levels and potential throughput. This ensures that the organization has the capacity to take on investments at the right time and with the right resources. This report will provide: Proof that organizations have made significant improvement towards solving the most common resource management and capacity planning pain points; Actionable information about the key practices top performers share; Recommendations for implementing best practices in order to increase in maturity and achieve business benefits; Steps for assessing your organization s resource management and capacity planning maturity. 4

5 Table of Contents Proof that the resource dilemma can be solved: As maturity increases, pain points decrease... 6 Top five practices of top performers... 9 Conclusion: It pays to solve the resource and capacity dilemma RECOMMENDATIONS Assess your maturity level to advance in resource management and capacity planning maturity..19 For More on This Research The report is best used in conjunction with an interactive, research-based website that can help you: Access research definitions, methodology, and demographics. Explore the data online for your area of focus: IT, enterprise project management (EPMOs); product development; and services-based organizations. Assess your organization s maturity levels in resource management and capacity planning. Obtain best practices and recommendations for people, processes, and tools. Visit the Resource Management and Capacity Planning Study website at: RMCP.PLANVIEW.COM 5

6 Proof that the resource and capacity dilemma can be solved: As maturity increases, pain points decrease At the outset of the online survey, participants identified their group s maturity regarding resource management and capacity planning. They categorized their group s scope as enterprise-wide (39%), business unit (41%), departmental (15%), or other (5%). level ranged from low (level 1 or 2) to mid- (level 3) to high (level 4 or 5). The following charts show how respondents measured their pain points by maturity level. Measure your group s pain points around resource management Seventy-seven percent of lower maturity organizations express that their top pain point is overcommitting resources. More mature organizations are 37% less likely to do so proof the dilemma is solvable (Figure 1). Overcommitment of resources is often a result of all or a combination of the other pain points listed all of which are felt more strongly by lower maturity than by higher maturity organizations. Resource Management Pain Points by Level (n=142) Medium (n=175) (n=158) Difference between low and high maturity organizations Over-committed resources 40% 56% 77% 37% Constant change that affects assignments and availability 38% 54% 61% 23% Inability to prioritize shared resources 24% 47% 58% 34% Inaccurate resource estimates 27% 43% 58% 31% Inability to access real-time reports on resources 21% 37% 56% 35% Inability to identify the right resources (roles, skills, etc) at the right time for project assignment 14% 20% 35% 21% Figure 1 6

7 Measure your group s pain points around capacity planning By every measure, the more mature the organization, the less the capacity planning pain points are felt. The top performers are 59% less likely to experience insufficient visibility into resource capacity, making them more confident to be able to deliver on strategic projects when they are needed--proof the dilemma is solvable (Figure 2). In contrast, 72% of lower maturity organizations lack a holistic view into resource capacity and pipeline demand. Capacity Planning Pain Points by Level (n=180) Medium (n=152) (n=146) Difference between low and high maturity organizations Lack of a combined, holistic view of both resource capacity and pipeline demand 19% 54% 72% 53% Insufficient visibility into resource capacity 10% 34% 69% 59% Ineffective demand prioritization and governance process 20% 38% 57% 37% Insufficient visibility into pipeline demand 23% 39% 56% 33% Unable to run what-if scenarios 27% 48% 52% 25% Figure 2 7

8 What companies risk when they fail to improve Almost half of all respondents identify the inability to complete projects on time (46%) as a top business risk of not addressing resource management and capacity planning (Figure 3). Missed business opportunities, increased project costs, the inability to innovate, customer dissatisfaction, and compromised quality are also strong concerns. Note that these concerns are mentioned equally often among the different maturity levels. The top risks shift by organization focus. For example: 42% of professional service firms said loss of revenue is the top risk; 52% of product development companies said that the inability to innovate fast enough is the top risk; 63% of IT/EPMOs indicated their top risk is the inability complete projects on time. Organizations are relating key business risks to the performance of their resource management and capacity planning. Business Risks of NOT Addressing Resource Management and Capacity Planning Inability to complete projects on time 46% Missed business opportunities 38% Increased project costs 36% Inability to innovate fast enough 34% Dissatisfied customers or clients 31% Compromised quality affecting customer/client satisfaction 30% n=480 Figure 3 8

9 Insufficient Visibility into Resource Capacity Over-Co The 2014 State of Resource Management and Capacity Planning Report Top five practices of top performers 69% (n=142) Mature companies reduce pain point by 59% 10% (n=146) The 2014 benchmark research shows clear differences in the way top performing organizations approach resource management and capacity planning. The results point to a set of five practices that organizations should model to realize bottom-line business benefits and improve resource efficiency: 1. Gain a holistic view into both resource capacity and pipeline demand Organizations that have a holistic or universal view into both resource capacity and incoming pipeline demand can most effectively take on the right work with the right people at the right time. The top performers are 53% more likely than their lower maturity peers to have this capability and the benefits resulting from it (Figure 4). While lower maturity organizations are typically hyper-focused on trying to attain visibility into what their resources are working on, they fail to consider the broader need for a more complete view into the entire demand and capacity picture. The following four supporting practices and behaviors are the foundations to develop and attain this critical holistic view. Lack of a Combined, Holistic View of Both Resource Capacity and Pipeline Demand 72% (n=142) Perspective: Mature companies reduce pain point by 53% 19% Figure 4 (n=146) We ve Inaccurate made a 100% Resource improvement Estimates in resource management and planning. We now have a holistic 58% view of all of our IT resources and visibility into our pipeline, Mature allocations, and over-allocations. This is the companies first time our COO actually cut projects due reduce to early visibility on capacity issues. Two years pain ago point we knew by we had too much work, our spreadsheets were always out of date, and 32% our data existed in silos. The quality of data has made the 27% difference. Quantitative numbers are hard to argue and we re using the data to make decisions. (n=142) (n=146) Manager of IT Quality Assurance and Product Delivery 7 L Ma (n= Inability Reports 5 L Ma (n Granula Informa 5 Ma (n Continued Reliance on Homegrown or Desktop Tools (e.g., Spreadsheets, Basic Project Tools, etc.) 9

10 2. Put a resource management function in place er maturity organizations are 36% more likely than their lower maturity counterparts to have a resource management function in place. They are also 30% more likely to assign a lead role to manage the processes and tools needed to execute the function, and they are 20% more likely than lower maturity organizations to place this resource management role in a centralized project management office (PMO) (Figure 5). Putting a resource management function in place allows leaders to be knowledgeable about the resources at the company, including the skill sets, capabilities, projects, and availability. By consistently capturing data through time sheets and other metrics, they can create real-time, accurate visibility into the organization s resource status. Resource Has Resource Management Function by by Level Level Yes No Don t Know (n=142) Mid (n=175) (n=158) 30% 6% 64% 30% 3% 67% 44% 7% 49% Figure 5 The following example shows how scaling resource management requires leadership, proper tools, and established processes. Capacity Planning Approach by Level Iterative Noniterative Don t Know 15% 3% 82% (n=134) Mid (n=175) 35% 5% 60% (n=143) 10

11 Chemical Equipment Manufacturer: Visibility into Resources Streamlines Product Pipeline and Aligns Resources to Impact Work Top Pain Points: Uncertainty that resources are working on the right things Failure to monitor or capture non-project time Inconsistent approach to resource management between business units Failure to cut projects early enough Top Business Risk: Long-term business objectives are at risk if all resources are not working on strategic efforts that affect the bottom line Level: Mid-Level The company realized that their long-term objectives were at risk with existing resource management activities. They committed to managing resources consistently and to ensuring that key resources are working on strategic efforts. Their vision is to tackle resource management first and then address improving capacity planning. Best Practice Tips: Establish ownership roles around resource management and capacity planning Gain executive support for purpose-built tools such as project/product portfolio management and processes Learn best practices from successful business units and cross-pollinate throughout the organization Perspective: We ve been working at PMO creation and administration for years and we have had starts and stops. Until we got executive support from the top down, we didn t see any movement and activity. Now we are able to move the business units that once operated as separate kingdoms all in the same direction and we are excited about it. We are using some of the best practices in capacity planning and resource management from the most mature units. Our executive team now knows that resources are working on sanctioned projects in order to meet our strategic goals. We already see a huge difference. Project Manager, PMO 11

12 58% The 2014 State of Resource Management and Capacity Planning Report 3. Mature companies reduce pain point by 32% 27% Stop relying on spreadsheets and basic tools and start using the right software (n=142) (n=146) er maturity organizations are 26% less likely than lower maturity organizations to rely on basic tools and spreadsheets for resource management and capacity planning (Figure 6). Instead, they use purpose-built enterprise software. The survey participants indicated that they use Project or Product Portfolio Management (PPM) software over any other type of enterprise software for resource management and capacity planning. Additionally, approximately 15% of mature organizations rely on homegrown solutions, a method reported in qualitative interviews to be unsustainable over the long term. In line with the findings above, the research shows that resource managers at higher maturity organizations are 30% more likely than their lower maturity counterparts to request and assign resources via purpose-built enterprise software than by manual methods such as spreadsheets or phone calls. The higher maturity group is also 25% more likely to capture time sheets into a system making historical information accessible. This leads to more accurate project estimates and planning. Continued Reliance on Homegrown or Desktop Tools (e.g., Spreadsheets, Basic Project Tools, etc.) 55% (n=142) Figure 6 Mature companies reduce pain point by 26% 29% (n=146) Thirty-seven percent of enterprise software users say that one of the top impacts of using enterprise software for resource management and capacity planning is streamlined and accurate resource forecasting, estimating, and planning. Reliance on basic project tools and spreadsheets affects the viability of the next two practices the ability to conduct iterative, continuous planning, and the ability to support multi-dimensional, granular planning. Relying on spreadsheets or other basic project tools may hinder these efforts or make them impossible. Perspective: We use Product Portfolio Management software and capture time sheets, which is enabling us do postmortems on baseline versus actuals. The process is starting to develop a history and we are using that data on new projects. The data has been very illuminating, and in fact, sometimes we were off by a factor of 3 or 4. We are starting to hone in on how long things take and we re using data to perform parametric estimates. Director, Project Management 12

13 Has Resource Management Function by Level 4. 6% 64% (n=142) Yes No Mid (n=175) 44% 7% 49% Don t Know Be more iterative and continuous in planning The top performers are 40% more likely to have an iterative approach to capacity planning. This means that they reevaluate and readjust the capacity plan throughout a project to increase accuracy (Figure 7). Non-iterative means the initial capacity plan becomes the project baseline and is not changed as project execution progresses. In terms of frequency, 30% of higher maturity organizations are planning on a continuous basis, 17% 30% on a weekly basis, and 30% on a monthly cycle. Because more than half (51%) of organizations responded that their top pain point is constant (n=158) 30% 3% 67% change that affects assignments and availability, this iterative approach can be especially important. For dynamic environments with regular new project opportunities and demands, continuous planning should be supported by access to real-time, accurate data on resources. Organizations that rely on spreadsheets and basic project tools will find it difficult to support continuous, iterative capacity planning and decision making. Capacity Capacity Planning Approach by by Level Level Iterative Noniterative Don t Know 15% 3% 82% (n=134) Mid (n=175) (n=143) 35% 5% 60% 42% 11% 47% Figure 7 The following example demonstrates how an organization achieved agility to respond to change and market demands by using a purpose-built enterprise software solution for capacity planning. 13

14 Global Advertising Agency: A Dynamic Project-based Workload Demands Agility and Planning Top Pain Point: Ongoing resource crunch as a result of constant change and complexity Top Business Risks: Inability to meet demand efficiently resulting in dissatisfied customers Lack of on-demand data to manage spare capacity and the bench Perspective: Level: Mid-to- Limited issues with resource overcommitment, but a desire for better bench management and improved capacity planning. Best Practice Tips: Focus on capacity planning and access to reliable data: addressing resource management is not enough Stop relying on manual systems and spreadsheets and consider purpose-built enterprise solutions Capacity planning has just not been done in the past. We used spreadsheets but there was no easy way for our team to give us info we need at the forecast level. It ends up being a data quality issue because incomplete data was not usable. We are very project-based and face constant change; using a project portfolio management solution helps. Our ideal scenario is to have a better understanding of capacity and demand to drive out spare capacity and efficiently manage spikes in our ever-changing, projectbased business. Operations Manager, EMEA and APAC 14

15 5. companies reduce pain point by 53% 19% (n=142) reduce pain point by 35% Get more (n=142) granular (n=146) and multi-dimensional for resource planning and assignments 21% (n=146) Mature organizations are 38% less likely to have insufficient detail in capacity or resource Inaccurate Resource Estimates information (Figure 8). Across maturity levels, most organizations perform capacity 58% planning at the full time equivalent (FTE), team, resource type, and role type Mature levels; but organizations at every maturity companies level expressed a desire to be more granular reduce and pain point by multi-dimensional in their planning. 32% In fact, the survey illustrates that organizations want to do resource 27% estimation and forecasting at the role, resource type, and skill level. The highest maturity organizations (n=142) (n=146) are nearly twice as likely to be able to plan at this granular level today and expressed a desire to become more granular and multidimensional. Continued Reliance on Homegrown Many organizations Desktop need Tools to (e.g., plan Spreadsheets, beyond just role capabilities Basic Project and also Tools, by expertise etc.) or skill type. An example of being more granular and multi-dimensional 55% is that the project needs a database developer, specifically one Mature with SQL expertise and cloud application development companies experience. In some organizations, reduce the more pain point by granular the better. 26% 29% Granularity of Capacity or Resource Information is Not Sufficient 52% (n=142) Figure 8 Mature companies reduce pain point by 38% 14% (n=146) Organizations have expressed a clear need to be more granular and multi-dimensional in their capacity planning and resource management but will be stymied by reliance on basic tools and spreadsheets that do not support this type of functionality effectively. The following example demonstrates the need to conduct due diligence and ask questions to identify needs and develop requirements to identify the right purposebuilt, enterprise solution. (n=142) (n=146) 15

16 International Corporate Insurance Company: The Organization Needs More Consistent Resource Management and Data Granularity to Manage Capacity and Meet Growing Project Needs Top Pain Points: Reliance on low quality content and data Inconsistent data capture and usage across the company Resource visibility that s too high-level, without enough granularity Top Business Risk: Project timing and costs Level: Mid-to- The company is mature in resource management for some business units, but could be more consistent and increase granularity to manage resources more effectively. Best Practice Tips: Before you invest in a tool, understand your needs, know where you want to go, and ask the right questions. The tool won t help if it can t do what you need. Perspective: Our main focus right now is to establish the resource management and capacity planning process in the same quality through the whole organization. We need consistent approaches in planning; the appropriate level of granularity; a holistic view; and accurate data. We have to answer: what capacity is needed, in what dimension, and with what skills? If you ask 10 business units, seven are consistent and three to four are struggling. Senior Business Intelligence Analyst & Project Manager 16

17 Conclusion: It pays to solve the resource and capacity dilemma The results of the research prove that the perpetual resource quandary is indeed solvable. While 70% of organizations indicate a strong need to improve, many have taken the early steps to attain better visibility into resources and demand. Those that have mastered it by attaining a holistic view into both pipeline demand and resource capacity are realizing business benefits today and express the desire for continuous improvement to drive even higher levels of resource efficiency and downstream returns (Figure 9). Impact of Using Enterprise Software for Resource Management and Capacity Planning Improved resource utilization through a holistic view of incoming pipeline demand and resources 41% Streamlined and accurate resource forecasting, estimating, and planning 37% Greater ability to manage shared resources 36% Faster decision-making due to access to accurate reporting and data 31% n=199 Figure 9 Key observations from the research: 1. Organizations that get better at resource management and capacity planning improve resource utilization and their agility to capitalize on business opportunities. 2. Top performers differentiate between resource management and capacity planning, and they realize the value of focusing on capacity planning as a priority. 3. A holistic view into both pipeline demand and resource capacity can become a competitive differentiator but requires the right processes and tools. 17

18 Most CEOs would agree that their organization s human resources are its greatest asset, and want to be industry leaders in productivity, efficiency, and profitability per employee. So it s a mystery why so many organizations leave the planning and management of their most precious resources to antiquated spreadsheets when more modern tools are available. This research demonstrates that investing in people, processes, and tools for better resource management and capacity planning pays off. Pain points become ancient history for organizations that make the transition to portfolio and resource management. In the words of one participant: We re no longer managing risk; we re focused on proactive planning and what-if scenario analysis. These organizations will not only do far more with less; they ll be able to invest in new initiatives and resources because they know how to maximize their resource potential. It s time to get started! The top performers are no longer in chaos. Instead, they are looking ahead to the true business multipliers: how to reduce spare capacity; how to speed innovation; how to deliver exceptional quality products and services; and how to deliver complex projects on time all with the resources they have today. 18

19 Recommendations Assess your organization s resource management and capacity planning maturity level by visiting the Resource Management and Capacity Planning Study website. (RMCP.Planview.com) Levels 1 & 2: Resource Executors Level 3: Aspiring Planners Levels 4 & 5: Capacity Masters Resource Executors (levels 1 & 2): Work on gaining visibility into resources A third of the companies in the lower two tiers of maturity are in the chaotic state of execution mode, with limited to no visibility into resources and virtually no capacity planning. Visibility is paramount but elusive. Current State The first order of business for this tier is to gain executive awareness into the issue. This is best accomplished by assessing different groups in the organization to identify and illuminate key gaps. Recommendations These organizations should put resource management functions in place along with basic processes to capture data about what people are working on and when they will complete projects. It is wise to move away from relying on spreadsheets and invest in enterprise software to gain a centralized view. Organizations should start with small wins and benchmark resource visibility at the outset and again in six months. Aspiring Planners (level 3): Use enterprise software to develop a holistic view Another 30% of participants at the mid-level of maturity are aware of the issues but lack a holistic view into both pipeline demand and resource capacity. Current State Organizations in this stratum have matured in resource management blocking and tackling and should put more focus on capacity planning. Common issues for this group are inconsistent data capture across business units and lack of granularity of resource information limiting capacity planning success. Recommendations Armed with executive support, this group should start capturing time sheets, establish more detailed levels of granularity for resources, and use data to improve estimates by conducting postmortems. Without enterprise software, this group will remain stuck at their current maturity level and will not gain consistency or a holistic view across the enterprise. Capacity Masters (levels 4 & 5): Hone capacity planning and leverage scenario analysis and analytics Not all of the companies that report to be in the two highest tiers of maturity are capacity masters, but most of them understand that resource management and capacity planning are distinct but highly interrelated disciplines. They are investing in the people, processes and tools for these functions and want to improve further. 19

20 Current State These organizations have solved the resource dilemma of overcommitting resources and are looking ahead for greater efficiencies and new business opportunities. This group should continue investing more time and energy into capacity and investment planning. Recommendations To continue to move up the spectrum, Capacity Masters should use analytics and data from their enterprise software or PPM solution to continually improve estimates and deliver better information to decision makers by providing access to dashboards. They have an opportunity to develop what-if scenario analysis, and to use their holistic view to reduce spare capacity from their bench, increase the tempo of innovation by applying top talent to key products, or cut cost for key projects by better aligning resources. The capacity masters see excellence in these key areas as a competitive differentiator and will make investments accordingly. For More on This Research The report is best used in conjunction with an interactive, research-based website that can help you: Access research definitions, methodology, and demographics. Explore the data online for your area of focus: IT, enterprise project management (EPMOs); product development; and services-based organizations. Assess your organization s maturity levels in resource management and capacity planning. Obtain best practices and recommendations for people, processes, and tools. Visit the Resource Management and Capacity Planning Study website at: RMCP.PLANVIEW.COM 20

21 The 2014 State of Resource Management and Capacity Planning Report About the Author Maureen Carlson is a partner at Appleseed Partners, an independent marketing consulting and research firm. Maureen has more than 20 years of technology marketing, consulting and research experience working with companies to identify emerging markets, understand market needs, and introduce new products to market. She is the author of six benchmark studies sponsored by Planview on the topics of resource management, capacity planning, product portfolio management, and innovation. As the chief researcher of the new 2014 Resource Management and Capacity Planning Benchmark Study, Maureen, in partnership with Dig Market Research, has provided qualitative and quantitative research as well as analysis, articles, and blogs on the About the Sponsor This study was sponsored by Planview, a global leader in portfolio management and project collaboration, with hundreds of enterprise customers around the world. Planview helps empower organizations to reach their goals and drive results by optimizing the capacity of their people and financial resources. The company s comprehensive solutions successfully manage a wide range of portfolios spanning product development, IT, services, and corporate finance. Planview s singular focus fuels a deep commitment to innovation and customer success. For more information, visit Planview.com. 21