Resource planning ensures that the right people, time, technology, and budget are allocated to the right projects and plans. It’s commonly used in agencies and consulting groups, design, architecture and engineering firms, and all project-based and professional services businesses. And in the new world of hybrid and remote work, the benefits of resource planning are coming to light across all industries.
These project-based businesses turn to resource planning so they can optimize planning and execution processes, maximize resources, and increase profitability. Resource planning ultimately elevates your approach to working with your teams and serving your customers, which in turn improves both staff and customer retention.
A resource planning workflow looks something like this:
- Evaluate the resources, skills, and tools needed to complete a project or task
- Match resources to the specific tasks and/or projects
- Determine how much time each task will take
- Calculate budget based on projected time and cost of resource
- Schedule based on availability
- Monitor progress
- Adjust plans and schedules as needed
- Review final outcomes and calculate actual time and money [#section-one]spent[#section-one]
Main Approaches to Resource Planning
There are three standard approaches to resource planning: Spreadsheets, ERP systems, and Resource Management Software.
ERP systems and spreadsheets can be viable solutions and both have their use cases. But companies that use either of these approaches often have a hard time 1) getting teams to adopt the tools, and 2) realizing the full value of resource planning.
ERP systems are touted for their wide range of capabilities—ERP does stand for Enterprise Resource Planning, after all. However, these heavyweight systems can be incredibly complex and are predominantly intended for finance or accounting teams. Perhaps that’s why only 26% of workers use their company’s ERP system.
Spreadsheets can work well enough as a starter program, but there are some big pitfalls that prevent spreadsheets from being good resource planning tools [#section-two]long-term.[#section-two]
How Resource Planning Spreadsheets Fall Short
If you’re using spreadsheets for resource planning, you can probably relate to at least a few of these shortcomings:
Resource planning spreadsheets are time-consuming.
Everything is manual and disconnected—creating projects and phases, assigning people, setting start and finish dates, and entering time spent. Resource planning in spreadsheets can quickly eat away your leadership team’s time, which is a poor use of their talent and salaries.
Resource planning spreadsheets are outdated.
All this manual work makes it impossible to shift schedules for the weekly changes in the schedule that will occur, often making them out of date as soon as the plan is created. Because they are cell-based, keeping schedules up to date is nearly impossible.
Resource planning spreadsheets are prone to errors.
Because all values have to be entered manually, the data is prone to errors. So if one person enters an incorrect formula or accidentally changes a piece of data, the entire spreadsheet can be inaccurate.
Resource planning spreadsheets are not centralized.
There is no unified organizational system for spreadsheets. Information can get lost in various locations, tabs, and files. Typically large organizations are using different spreadsheets, and combining them would be overwhelming. Accurate versioning is impossible to track.
Resource planning spreadsheets are not collaborative.
Spreadsheets were never designed to support collaboration. You can’t track changes. There are no built-in communication tools. They don’t include an approval process. And it can be a nightmare trying to get your team to use them as intended.
Resource planning spreadsheets are reactive.
Data is only entered into spreadsheets after the fact, often weeks after the month has ended. The one thing to gain is lessons learned, instead of proactively planning for something to come. Key project metrics are not visible in real-time, meaning what’s done is done and it's too late to take action.
Resource planning spreadsheets don't provide true reporting.
Even though spreadsheets can hold large amounts of data and complete basic formulas, they don’t analyze automatically it and you're left doing the work. Management teams that rely on spreadsheets can lose days trying to understand the data they need to make important business decisions, and those insights always come after they’re really needed.
Resource planning spreadsheets are disconnected from your other systems.
Spreadsheets can’t communicate with any other software. So any information you need from other systems needs to be copied over manually. This means more time is spent on manual data entry, which can also be prone to mistakes.
,If you’re all too familiar with any of these challenges, it may be time to investigate software as an alternative approach to resource planning [#section-three]spreadsheets.[#section-three]
7 Reasons Resource Management Software is a Better Answer
Resource management software is purpose-built to support all the processes involved in resource planning.
1. Resource management software doesn’t require an Excel wizard.
Let’s face it. Excel isn’t the easiest tool to work with. While the basics are pretty straightforward, it can get cumbersome fast. And sometimes it feels like you need an engineering degree (or a second one) just to create a few formulas. Most modern resource management software has easy-to-use interfaces that make it simpler for everyone to do their jobs.
2. Resource management software enables greater project and resource planning efficiency.
Efficiency is a major benefit of resource management software. You can quickly set up new projects by cloning past ones or starting with a template. It’s easier to see who’s available and when. Entire plans can be scheduled with just a few clicks. And when you make a change to the timeline, everything else adjusts automatically.
3. Resource management software accurately predicts workload.
Most people who are doing team resource planning in Excel know that it’s all too easy to overbook team members. Resource planning software typically gives you a high-level view of how much work your team has on their plates, and more importantly what lies ahead. This insight can help you plan smarter, avoid burnout, and ensure everyone is fully utilized.
4. Resource management software enables smarter forecasting.
One of the reasons it’s so challenging for firms and agencies to scale is that they can’t easily predict workload or hiring needs. The right resource management software helps company leaders accurately forecast workload and can automatically identify potential demand or capacity issues. Spreadsheets can’t come close to adding this level of value.
5. Easily tie projects to profits with resource management software.
Analyzing the actual time and budget that went into a project is often overlooked when you’re using spreadsheets for resource planning. But this is a critical step to protect the profitability of your business. The software makes it easy to track the amount of time and resources that go into each task. It typically includes built-in reports to compare planned to actual values and to calculate the actual cost vs. profit on projects.
6. AI-powered resource management software makes strategic recommendations.
Some resource management software includes AI which gets smarter over time. Mosaic, for instance, uses AI to optimize schedules around priorities, improve utilization, and suggest the right person for the right role based on dozens of data points.
7. Resource management software improves visualization.
No more scanning rows and rows of data searching for an answer. Software quickly identifies and showcases the areas that require attention so you can prioritize your [#section-four]efforts.[#section-four]
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