I’ve received a lot of questions lately on how resource management can transform the nature of work. Each time, the one thing I stress to people is that going from wherever they are now to a functioning resource management approach that supports everyone in their organization is, in fact, quite simple.
Buy the right software, then provide your stakeholders with the services they want
Yes, you need software. I’ve said that before and I’ll keep saying it.
If you ever had an inquiry with me during my years at Gartner, you know I gave the same advice to all my clients then as I’m giving here now. Excel is wonderful, we all love it… but it’s a lousy resource assignment tool and a disastrous strategy execution tool.
So what’s the resistance to investing in software? Most PMO leaders I’ve spoken with repeat the litany of People, Process and Tools, then sagely informed me that they won’t consider a tool until they have the process down.
I understand the theory behind this thinking. However, I would argue that once you understand what your stakeholders (people) need to do their jobs, you’ll be able to shop with a clear conscience for the best tool to meet their needs. Once you have the tool and the needs of your stakeholders identified, I believe your process will naturally evolve from there.
Of course, I recognize that interviewing all your stakeholders takes time. On top of that, you’ll have to identify exactly what they need (which can be different from what they say they want). With that in mind, allow me to offer you a starting point. In my experience, the organizations best able to do this are the ones that have chosen to adopt lean portfolio management.
For organizations with low portfolio maturity, don’t give up! You can still make progress. The tithe you’ll have to pay to organizational politics will be higher, and your timeline will undoubtedly be longer. But everything you do that moves your organization forward should be considered a badge of honor.
Selecting the right tool for your people
To make your decision, you first need to understand what your stakeholders need from a resource management tool. Keep in mind that it must also be a fully integrated strategic planning tool.
For executives, robust capacity planning lets them know that they are spending their scarce resources on the most important investments.
Let’s be clear at this point: it would help if you didn’t try to do this in excel. Period. Full Stop!
We are talking about the single-most important decision your company is going to make. Being penny wise and pound foolish in your approach isn’t a way to impress management.
You absolutely need software that easily enables resequencing the portfolio for executives to ensure that all their strategies play nicely together[i]. Prioritization is a POLITCAL starting point, but you should never confuse that with the optimum approach to getting things done.
For Divisional Managers, portfolio roadmapping is your secret weapon. When the concept of roadmaps that are focused on what the business needs came on the scene 8 to 10 years ago, I was thrilled… only to watch it get buried in false complexity.
Business roadmaps are very, very simple when you follow these 5 steps:
- Ask what projects they want.
- Ask which strategy each project primarily supports (tell them to pick out of the 3 or 5 strategies the company has chosen).
- Give them separate timelines for each strategy.
- Remind them it’s an annual plan; they cannot front load (the only exception would be if they have a project that is a key dependency for other divisions).
- Remind them that their project will still get moved because they need to fit in with everyone else.
At this point, the only piece you need is relative project duration. This will allow management to review and decide if the first pass at the strategic plan makes any sense.
A client once shared with me that when they reached this stage, 40% of all projects on their roadmap were slated as supporting the “increase gross margin” objective. Thankfully, they had a very savvy management team, and their executives found this suspicious.
When I explained that no proposal could be slotted into the “increase gross margin” objective unless the requesting division could identify where on the P&L the revenue or cost reduction could be found, the category magically dropped to 15%. That’s much more in line with what we usually see.
Please note that those projects weren’t necessarily bad. In fact, they might have been fantastic. They just weren’t designed to deliver an immediate financial return, which is what the executives wanted to focus on.
It’s all in the numbers
Organizations all have different planning horizons. When I was in finance, we’d kick off the plan in September. By mid-October, we’d have things sequenced and ready to start locking down details. We worked on a 180-day rolling forecast concept so that budgeting—as in detailed numbers—was handled for the next two quarters.
From the standpoint of a resource forecast, you’ll need to forecast out for each project until any project approved in that six-month window is complete. You can’t cheat on this step.
After spending most of my early career in NPD, I recognized that engineers get very involved in their work. My #1 rule was NOT to jerk them around. Reality might force a product to be canceled, but cancellation caused by poor planning was something akin to a hanging offense.
For that reason, your assignment at this point is to get everyone focused on generating the right numbers. That includes duration, complexity, risk, and acts of Murphy. The most important secret I can share with you is that excessive detail or precision is your enemy. Trends and averages are your friend, and you’ll find them amazingly accurate across an entire portfolio.
Putting the plan into action
Once the portfolio has gone through the first level of political machinations and a guestimate of sequencing has been established, you can finally get into making more detailed resource allocation. At this point, you are checking to make sure you have all the right critical skills available for the next six months.
Trust me: once this process becomes routine, the steps will run in the background. You’ll quickly learn to continuously do this kind of forecasting.
The next steps in the process should be executed by role:
For PMO Managers, here’s where the rubber meets the road. All of these projects are dependent on a strong high-level project plan.
Any project slated to start in Q1 needs a reasonably detailed schedule. It’s the PMOs responsibility to ensure that NO project goes in the 1st or 2nd quarter of the plan unless it’s clear why the project is being done and EXACTLY what it is intended to deliver. If things are a little fuzzy, then make up numbers for now and put the project in the 3rd or 4th quarter.
Project scheduling is a discipline. A thousand lines on a Gantt chart is almost always unnecessary for a business change project. 50 to 100 key tasks should ensure the project is executable. This is the schedule you will be resourcing, so it MUST be detailed enough that the capacity plan makes sense.
For Finance Managers, your project labor costs drive around 75-85% of the cost of an internal change project/program. Expense beyond the 15-25% operating costs will need to be filled out and placed in the project budget. The budget needs to be in the same system you are using to do capacity planning – another reason you can’t use excel.
For Resource Managers, once resource capacity and resource allocation have been completed, the next step is to assign resources to the projects that have been tentatively approved. I say “tentatively” because I have yet to see this done without at least one or two surprises. Without fail, when the project manager and the resource manager drill down into what’s required, it turns out that Joe rather than Mary has a critical skill that no one mentioned earlier on.
Protecting resources from overallocation
Being a resource manager in most companies is a very tough job. It’s also an incredibly important job. Only the resource manager (in conjunction with the project manager) can get the right person to the right project at the right time.
The best advice I can give (only to reinforce what you are already doing) is do NOT unnecessarily fragment the people you are managing. If someone shows 15% availability, do NOT assign them to anything new. Meet with their current project managers and offer each of them 15% more time to get the assignment completed more quickly. If—and I find this hard to imagine—no one takes you up on your offer, then work directly with the resource to find a training program they should be taking. Upskilling should always be a priority.
[i] Companies usually have between 3 and 5 strategies according to HBR.