Resource and Business Capability Analysis
Many portfolio management methods do a poor job of resource balancing. Projects are evaluated, “Go” decisions are made, but resource implications are often not adequately but more important realistically addressed. Many organisations simply consider individual projects one-at-at-time and on their own merits, with little regard for the impact that one project has on the next. Failure to manage the businesses resource capability leads to pipeline gridlock in which too many projects chase too few resources. Prioritization is one thing; the capacity to deliver on these priorities is another. Therefore before we approve and execute the portfolio it is necessary to match up the project portfolio with the corresponding resource requirements. This stage is crucial to determining the businesses capability to undertake the required work in order meeting the portfolio objectives.
The PPM framework needs to provide PPMT with a controlled and predictable method of monitoring resource and business capability against the strategic planning process in order improve the probability of a business being able to meet targets on time and to budget. Resource capacity is particularly challenging simply because so many organizations are lacking the processes to be able to effectively track how much effort is available for project work, and how much of that effort is already committed to initiatives underway. Before we explore the steps involved it is essential to note that the portfolio mix should not exceed the organization’s resource capacity or capability. One of the central components of PPM is its ability to enable the business to implement an equitable balance between the demand and supply of resources. With the support of the PMO has a project knowledge centre the PPMT is able to collect all the relevant information to update the project portfolio and build supply and demand scenarios that then can be fed back into decision making.
This in turn allows the business to make the right project selections and to allocate resources to the highest-priority activities across groups and organization units.
The business resources can typically achieved by implementing the following step process:
Step1 - Determine Resource Demand and Constraints: The first step looks to understand the resource spread between “Business-As-Usual” activity i.e administration, existing projects and the demands of new projects. Essentail here is rooting out so called “invisible projects” are often buried or masked has routine work and soak-up essential resources.
Therefore key issues within this step include:
a) Identifying existing resource demands and constraints
b) Determining resource requirements for new projects
c) Analysing ratio of resources between existing and new projects
Step2 - Create Resource Supply and Demand Scenarios: The next stage is to create resource allocation scenarios. This includes analysing the impact of cancelling active projects, putting them on hold and anlaysing for example their impact across a 3, 6 and 12 months perod. As well as examining delaying or bringing forward projects, and understanding their overall effect on the businesses capacity.
Key issues within this step include:
a) Creating portfolio variants for different allocations of resources
b) Developing resource redistribution scenarios and analysing there impact on the business
c) Determine the need for addition internal and external resources
d) Defining resource development requirements based on skills requirements
Step3 - Allocate Resources: As a result of scenario analysis, changes are made to the existing allocation of resources across both the portfolio as well as the organisations existing “business-as-usual “ activities. Also essential here is to establish metrics and processes that will allow the business to determine at what point in time there will be insufficient or excess capacity for the project portfolio as a whole.
Key issues within this step include:
1) Determining resource allocation for each project
2) Deciding whether to create additional internal or external capability
3) Ongoing capacity management inorder to provide visbility into long-term resource requirements.
Ongoing, responsive capacity management requires constant access to up-to-the-minute data from all related systems. This allows rapid identification of changes to the project portfolio. It also enables modifications to be simulated in response to deviations and bottlenecks, ensuring that the right decisions are made. The resource and business capability analysis process provides decision support for the following issues:
a) Which projects can be executed with available capacity,
b) Where and how can capacity at one organizational unit be reassigned to another and how can a project portfolio be capacity-optimized?
Next week Portfolio Selection, Prioritization and Authorization
