Deliver Project Portfolios like a Boss with Effective Resource Planning

Have you ever over-promised delivery on a project portfolio and under-delivered, leaving management to wonder if you knew what you were doing?  Or worse yet, under-promised and over-delivered, with management wondering if you might have been sandbagging or wasting resources?  Either way is not beneficial in building confidence in your capability to deliver the committed project portfolio.  There are 3 crucial pieces of information needed before committing to delivering a project portfolio: scope, priority, and resources.

High-level project scope is generally easy to define, the business needs X to do Y.  However, a high-level scope is more than just an idea, it should have some definition and guidelines.  Along with the scope, there should also be a cost/benefit analysis to justify investing in the project.  If the project’s Return On Investment (ROI) is profitable and the project supports the company’s objectives for the year, then usually those aligned projects will make it through to the project portfolio.  When it comes to defining scope, the devil is in the details, but the high-level scope can be further defined in the planning stage after the project is approved.

The project priority helps relate the project’s value to the company’s objectives.  The priority will determine which projects provide the most value and should be worked on first.  This ordering of project execution will help fund, schedule, and provide resource assignments.

The most important piece of information involves the resources required to deliver the project portfolio, yet most companies spend very little time on Resource Planning and Management.  Although employee resources are integral to a company’s success, they are typically the company’s largest expense.  Therefore, to be profitable, resource utilization should be effectively managed and the organization should have the right resources working on the right things at the right time.  Before committing to delivering the portfolio, ask yourself: “Do we have enough resources available to complete the project work or is everyone fully utilized?  Do they have the right skill set and experience to perform the work quickly and to an acceptable quality level?”  Effective Portfolio/Resource Planning and Management will help you keep your promise to deliver the project portfolio for the organization while being strategic about additional spending.

Most organizations have an idea of what projects they would like to accomplish for the year.  Sometimes, unrealistically, resource managers believe they have enough capacity to complete the projects and as soon as the project list is approved, they go for it.  Project managers are initially assigned, so they can acquire the necessary resources for the project.  What ends up happening is the first Project Managers assigned (or the ones with the most clout) snag the resources they need to be successful on their projects.  Often there is little regard as to which projects add the most value to the organization. Some important projects end up having non-committed resources who work on the project in their spare time. In the end, the portfolio that was committed to will have non-critical projects completed, and critical projects taking longer than expected. This is due to resource availability, which drives up costs and delays the project value recognition. Although this scenario may be a little extreme, there is a glimpse of truth that everyone has experienced at one time or another.

Organizations like this usually fall short because they don’t have a Portfolio/Resource Planner.  Some companies are small and feel they don’t need this position, and that may be true, but someone in the organization should be performing this role.  There should be a person accountable for the entire project portfolio who coordinates, communicates, and collaborates with the functional managers on priorities and resources.  This ensures the organization has an overall project roadmap that is prioritized and resourced for maximum efficiency and value.

The Portfolio/Resource Planner role gathers future project information from the sponsors, ensures the projects are reviewed and prioritized, and determines if there are enough resources to execute the projects.  They work closely with the project sponsors and resource managers to make sure everyone is on the same page and focused on the company’s priorities.  The project sponsor provides project resource role estimates and durations. The resource manager provides what resources from their team are available to work on projects and their availability percentage.  Based on the priority of the projects, resource role estimates, and resource availability, the Portfolio/Resource Planner can determine if the portfolio has any resource deficits.  If there is a resource deficit, the organization will need to decide if it should hire or contract additional resources or reduce the scope/number of projects in the portfolio.

This resource analysis helps identify potential resourcing issues prior to committing to the project portfolio, so the issues can be resolved or planned for, minimizing the impact on the project portfolio work.  There are usually three portfolio/resource options for the organization to consider:

1) Execute the entire portfolio with the resources available

2) Execute the entire portfolio, but will need to hire/contract additional resources

3) Execute a reduced portfolio, with the resources available

The organization can now determine which option they would like to pursue, and with each option, there is confidence that resources are available to fulfill the portfolio commitment. 

Once the portfolio is approved, the Portfolio/Resource Planner can then move into a Portfolio/Resource Manager role, or the Resource Managers can track/manage/report against the resource plan, while the Sponsors/Project Managers manage the project commitments.  Either way, the projects are committed to being completed, there are enough resources, and the managers are held accountable.

The major benefit from Portfolio/Resource planning is that everyone in the organization is on the same page and will be managing the priority, resource, and project portfolio commitments that were agreed upon.  Now, you are delivering portfolios like a boss!

The Portfolio/Resource planning will take time to set up correctly.  You’ll need standardized processes, tools to support the processes, and trained people to execute and monitor the processes.  Once this is established, maintaining the processes will be key.  It takes about 2 yearly planning cycles to form good resource planning habits.  Be sure to look for experienced help when setting up Resource Planning and Management, so you don’t become overwhelmed or sidetracked by insignificant details.  Also, experts can bring best practices that will get your organization up and running faster.  They may also provide mentoring and support afterward until the process is established in your organization.

The value received from Portfolio and Resource planning is priceless.  You will have more control over your project selection, project execution, and resource costs.  It will help an organization deliver projects better, and reap the project benefits faster, so the organization can change and grow.  In times of economic uncertainty, it is crucial that project costs are managed, and company growth continues.  Be the organization that is strategic in its portfolio planning and resource management!