5 Best Strategies to Manage Capacity Planning Bottlenecks

Capacity Planning Bottlenecks

Are you facing frequent project failures due to constant skill mismatches?

Is it becoming challenging for you to address resource shortage/excess?

Struggling to balance niche-skilled resources’ workload across projects?

If the answer to these questions is YES, you need effective capacity planning to mitigate these bottlenecks. 

A robust capacity planning framework considers both current and future project resource demands to ensure organizations have competent resources with matching skills available for the project onset. It enables firms to bridge resource gaps and effectively utilize the workforce. 

This blog discusses five techniques to help organizations manage capacity planning challenges and how SAVIOM can be beneficial.

Let’s begin.

1. What are the signs of capacity planning bottlenecks in an organization?

Capacity planning is the process of predicting the current and future project demand gaps to identify and mitigate the shortage/excess of resources. However, firms encounter certain issues with capacity planning, and managers must identify them before they hamper the project delivery.

Below are some of the signs of capacity planning bottlenecks:

When incompetent employees are handling tasks in a project due to poor visibility into resource attributes, it is a sign of a capacity planning bottleneck. This constant skill mismatch would hamper the deliverable quality and cause delays. 

Another major sign of capacity planning bottleneck is the delays in projects due to shortage or unavailability of niche skilled resources. This happens when project managers cannot anticipate the requirement of specialized resources for a project in advance. 

Furthermore, when the resource supply is constantly lower than the demand and the project vacancies go unfilled, it is another telltale sign of capacity planning bottlenecks. Similarly, if there is an increase in the bench size, it implies wrongful hiring or resource underutilization. Both these instances can result in lost market opportunities, billing loss, etc.

Additionally, if there’s a consistent pattern of employees leaving or taking unplanned leaves due to stress or excessive workload, it is a sign that the organization isn’t effectively managing its capacity.   

Nevertheless, as discussed in the following section, one can always overcome these challenges with a few proven practices.

2. 5 ways to manage capacity planning bottlenecks

Effective capacity planning plays a pivotal role in project execution and delivery. Therefore, organizations can proactively implement the following methods to address capacity planning issues.

2.1. Prioritize projects based on criticality & business value

In a multi-project landscape, managers must prioritize projects based on pre-defined criteria, such as feasibility, strategic alignment, cost-benefit analysis, potential risks, resource requirements, etc. Following that, they can deploy the requisite resources to high-priority projects first, followed by medium and low-priority projects.

This way, dividing projects based on criticality and value addition allows managers to ensure competent allocation and avoid last-minute firefighting. It prevents the booking of skilled employees to low-priority projects, rendering them unavailable for high-value endeavors, and facilitates the timely onset of crucial projects. 

2.2. Forecast & bridge shortage/excess of resources

Managers must have foresight into pipeline projects to identify the resource requirements. This visibility enables them to identify the gaps and determine whether they have a resource shortage or excess. Accordingly, they can take proactive measures to bridge the supply vs. demand gaps. 

For instance, a shortage of resources can be addressed by implementing training/ upskilling or conducting project-specific hiring. Contrarily, for excess resources, managers can bring forward project timelines or sell the excess capacity at discounted prices. This way, organizations can prevent last-minute resourcing hassles and ensure successful project delivery.

2.3. Allocate competent resources to projects

When project managers have visibility into pipeline project demand, they can raise resource requests in advance to ensure the availability of requisite professionals. Based on these requests, resource managers can analyze the internal talent pool to identify and assign best-fit resources based on critical attributes, such as skills, competencies, experience, etc. 

By ensuring competent allocation, managers can prevent the assignment of under/over-skilled resources to tasks. This helps avert employee disengagement, burnout, and reduced productivity. Furthermore, allocating the right people to the right job guarantees better quality of deliverables and timely project completion.

2.4. Form the right mix of on-demand & permanent workforce

Organizations can form a balanced mix of contingent and permanent employees to efficiently fulfill current and future project demands. For this, managers must first assess the nature of skill requirements and determine whether they are short or long-term. 

Accordingly, managers can hire on-demand employees for short-term skill requirements, and for the long-term, they can recruit permanent resources. This eliminates unnecessary hiring/firing cycles, minimizes overhead costs, and helps fulfill the changing client demands.

2.5. Enable out rotation/backfill strategy for niche skills

Organizations usually have a limited number of niche-skilled resources. This makes it difficult to schedule them for a new project at short notice because they might already be deployed on other projects. In such cases, managers can implement out-rotation and backfill strategies to facilitate timely project initiation. 

For instance, a high-priority banking project requires a data analyst. However, the firm has already allocated an available analyst to a project. Therefore, resource managers can negotiate with the respective project manager to out-rotate the data analyst to the new project and backfill the position with a similar-skilled replacement. This will ensure that the new project starts on time and the current one is unaffected.

Given the best ways to mitigate capacity planning problems, the following section explains how an advanced resource management tool can be useful.

3. How does futuristic resource management software help?

Advanced resource management software like Saviom provides next-gen features and functionalities that help firms tackle capacity planning bottlenecks.

  • The 360-degree visibility enables organizations to identify resources based on their skills, competencies, location, availability, etc., facilitating competent resource allocation. 
  • Multi-dimensional forecasting and capacity planning features allow managers to foresee pipeline project demand, identify the shortage/excess of resources, and implement remedial measures to bridge the gaps.
  • The competency matrix allows firms to store up-to-date resource information. This enables managers to implement out-rotation & backfill strategies for niche-skilled resources.
  • Real-time BI reports like project vacancy provide details on the available vacancies, and people-on-the-bench offers foresight into benched resources. These reports enable managers to avoid capacity wastage and improve billability.
  • The what-if analysis module helps simulate and compare scenarios to arrive at the best possible outcome. This helps formulate the right resource mix to combat the excess/shortfall and maintain an optimal resource health index.   

4. Final thoughts

Capacity planning constraints limit an organization’s ability to deliver projects of high quality within the stipulated time and budget. Therefore, following the strategies mentioned in this article paired with next-gen resource management software will help tackle these bottlenecks. Moreover, it helps optimize an organization’s performance, enhance productivity, and improve the bottom line.