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In present-day project management, success is defined as planning for the future needs of the organisation, in addition to effectively planning for the achievement of outcomes. Teams find themselves in challenging situations such as constrained resources, confused employees, and projects being delivered over budget because of a lack of foresight.
Resource forecasting helps organisations observe and map the right people, tools, and budgets to the right projects, at the right time. When looking ahead, organisations can avoid daily firefighting, efficiently manage budgets, and run projects ahead of contracted outcomes. In this blog, we will define the terms resource forecasting, its importance, techniques, benefits, best practices, and tools that can support organisations to get their forecasting process right.
Resource forecasting in project management is the act of estimating future demands and availability of resources, and in particular, the workforce, tools, budget, and time needed to effectively deliver projects. Resource forecasting helps ensure workloads can be balanced, shortages are preemptively avoided, and efficiency can be maximised.
Resource forecasting ensures that project managers understand clearly what is required in advance of commencing the work. Using pre-existing data and models of forecasting, an organisation can project resource needs weeks, months, or even years in advance. This preventative step can save the organisation costly delays while helping ensure project objectives stay within scope and are delivered on budget.
Resource forecasting is not simply a tool for planning. It allows managers to prepare for possible risks as well as to strategically make decisions about what tasks to assign. Resource forecasting also helps prevent over-assignment or under-utilisation of resources. If a project is forecasted, then managers can make hiring and training decisions early, rather than at the last moment.
A resource forecasting model provides the structure of the planning framework. A resource forecasting model will utilise past projects' data to determine what the organisation currently needs and forecast future needs. The model will help the organisation provide tasking to the appropriate employees, develop a plan for equipment needs, and allocate funding. Resource forecasting can smooth workflow, budgeting, and project outcomes from simple charting of things.
Preparing resource planning is an important element of project workflows and everyday organisational operations. Without it, businesses likely will encounter interruptions, delays, and deficits. This is why you need skilled resource planning.
Predicting the need for resources helps project managers know what needs to be obtained before work starts, which lessens the chances of disruption, hold-ups, and losses of financial investment. The anticipation of resources alleviates the headaches of interruptions, and resource scheduling becomes more realistic between workforce capacity and project expectations.
Expecting the potential for resource shortages, conflict, or overload helps the organisation to proactively manage challenges before they escalate. In this way, resource planning transitions from reactive to strategic, creating less turbulent project delivery and fewer surprises.
By forecasting a greater degree of accuracy, organisations can plan their finances, accordingly, allocating costs appropriately and controlling the risk of overspending or underfunding critical work. It can also assist organisations in achieving the best resource investments and overall project profitability .
When resources are in place at the right time, staff can operate to their maximum once again without being overworked. Supportive workloads create a more favourable environment that fosters healthy morale and mitigates against potential burnout.
Whenever you deliver projects on time, the right number of resources is allocated, and trust develops. Clients are substantially more likely to return or refer to other businesses that honour their commitments. It is all about building relationships over the long term and a reputation for your company and brand.
Several techniques can be applied to forecast resources, and the choice depends on project complexity, data availability, and organisational goals.
By looking at outcomes from similar projects, managers can experience the process and validate future needs. Historical projects can help determine team size and duration; for example, if past software projects required five developers for a period of six months, that will be a good extrapolation for future software projects. Using historical data reduces reliance on guesses and inherently captures organisational knowledge.
The work breakdown structure (WBS) breaks a project into smaller, more manageable parts, allowing project managers to better identify resources, timing, and dependencies. WBS provides structure, accountability, and control over the project when work is broken into specific tasks.
Market demand trends, fluctuations in expected workload, and seasonal trends all provide organisations with indications of what they will need in the long term. For example, retailers may anticipate increased staffing for busy seasons and holidays.
Simulation software can help project managers simulate varying scenarios with work. One type of simulation that can be used is called a Monte Carlo simulation , which runs the variables through randomisation and provides inputs based on varying conditions. For example, the Monte Carlo method provides information on direct and indirect costs and gives project managers a choice of allocations based on the best outcome.
The experience and intuition of subject matter experts can provide needed guidance for forecasting considerations. Expert judgment is not as scientific as other methods, and decisions are arrived at using expertise, but it is a useful method for specific or unique construction projects or projects that are complex, where statistical models may not hold.
To be effective, forecasting must be correct as well as consistent. Below are some best practices that can improve the forecasting process.
Making decisions based on old data doesn’t lend itself to good decision-making. Utilising real-time information means that forecasts are based on what the current workload is, what employees are available, and what has changed in the financials.
If the system is based solely on spreadsheet usage, errors will likely creep into the forecast. There are specialised tools to use, such as Time Champ , Microsoft Project, and Float, which have a built-in forecasting capability that saves time and increases accuracy.
When forecasting, consider collaborating across teams. Finance teams can inform you of costs and business metrics, HR can give you an update on the workforce availability, and the “product” team can help with workload demand.
Projects are always evolving. As forecasts are updated frequently and regularly, the forecast will be aligned and dependable on the changing variables of the project requirements and market conditions. This allows management to make informed decisions and to allocate resources accordingly.
As you track what should happen projected against actuals, you can start to identify areas of improvement. Experience and continuous learning should lead to improved accuracy with each cycle of the project.
Resource forecasting is not just about predicting future demand; it creates a stronger foundation for decision-making and project success. It allows managers to avoid shortages, control budgets, and maintain smooth workflows. Planning helps organisations save time, money, and effort while keeping teams motivated. Here are the key benefits of resource forecasting:
Thinking ahead to resource forecasting gives managers a clear view of anticipated needs. So, they can effectively plan for hiring, training, or capital purchases as needed to support the strategy. Planning makes decisions strategic as opposed to reactive.
When organisations predict what resources or capital will be needed to perform the organisation’s everyday business, they can manage to avoid the mutually costly problem of overstaffing or over-utilisation of resources. Organisations put themselves in a position to not waste money on unnecessary expenses and to make the best out of their budgets.
By having the appropriate resources available at the right time, teams are more productive and diligent because nobody is being paid to do nothing, the work becomes more fluid, and productivity workflows are significantly increased. It also allows teams more time to focus on higher-value deliverables and quality of output.
Forecasting can ensure that the team's workloads will be equitable. In turn, employees can have reduced levels of burnout and stress, meaning they will be more engaged at work. Team functionality will promote a sense of fairness and support, which fosters morale and retention.
Clients will trust that the project can be completed on time and within budget because of the forecasting process. Forecasting generates professionalism and reliability and ensures a consistent delivery of service on time. In addition, it improves an organisation’s reputation, resulting in increased repeat and referral business.
A template for resource forecasting supports project managers in establishing and overseeing future resource requirements, all in one place. A valuable and clearly structured template will help keep projects on time and budgets under control. Key features to include in a resource forecasting template:
This information would contain the project name, project goals, timelines, and milestones. This helps provide context and ensures that resources align with the project's intended goals. The project information can also be used for quick stakeholder referencing when the team's scope of work is unclear to the client or stakeholders.
The forecasting template would document all resources needed, people, tools, equipment, and materials. Specifically adding the skilled employees, their availability, and costs into the planning ensures the right resource is assigned to the right tasks.
Document how team members will be distributed on a task basis. Even workload distribution, if accomplished, will ultimately ensure individual team members do not become stretched or overworked, and also assures that available resources will not be underutilised.
Offer some projection of what each resource should cost. Projections offer a means to prevent overspending, while also providing a critically accurate account of what the managers should anticipate needing for funding.
Include any risk that might affect the resources. In addition, contingencies will ensure that the team is empowered and equipped to deal with any unanticipated variation and can do so without delay.
Forecasting tools not only help in predicting resource needs but also automate reporting, reduce manual errors, and provide real-time visibility into project performance. They allow managers to balance workloads and improve overall productivity. Here are some of the best resource forecasting tools you can consider:
Time Champ is an all-in-one employee productivity and resource management software. It helps track working hours, monitor team performance, and forecast future resource needs accurately. With its real-time insights and automation, managers can ensure optimal utilisation of both time and talent.
Float is an easy-to-use and straightforward tool that makes scheduling and forecasting a breeze; it allows managers to assign work, monitor availability, and predict the depth of workload easily. Float also provides visual reports that can help you spot bottlenecks and ensure you're optimising your team's effectiveness.
Resource Guru offers drag-and-drop scheduling, utilisation monitoring, and forecasting. You can manage people, equipment, and meeting rooms on one platform. It will also send automated reminders to eliminate scheduling conflicts and improve efficiency .
Hub Planner is a flexible tool that assists with resource planning and time tracking. It provides you with visibility into resource capacity, project timelines, and financial forecasting to enable better decision-making. This tool also allows you to easily collaborate with team members to improve project coordination.
An AI-based project management tool that accurately forecasts tasks, resources, and budgets. The platform connects to various platforms to ensure project execution has less friction. Moreover, forecast leverages predictive analytics to help managers plan for potential risks and delays.
