What Are The 3 Stages of Resource Planning?

What Are The 3 Stages of Resource Planning?

What Are The 3 Stages of Resource Planning?

Resource planning is a complicated process that requires recognition and inventory of resources all around the country's regions. This includes surveys, mapping, measurement of the resources, and qualitative and quantitative estimation. To manage all of these resource planning tasks in a centralized system, many companies use Enterprise Resource Planning (ERP) software.

Developing a planning structure endued with appropriate skill, technology, and institutional set up for resource development plans. And coordinated resource development plants with overall national development.

In short, it's a skill or technique for the appropriate utilization of resources. Planning is essential for the resources that are unevenly distributed and limited all over the country and ERP implementations are on the rise alongside business needs to centralize operations and reduce costs.

What is Resource Planning?

Resource planning presents a systematic approach to optimal use of an organization's people and time. Managing a conflux of timekeeping and project management skills, project managers have to produce and maintain stability between tasks, projects, time, team, and budget.

Resource planning is more about the strategy for judicious and planned utilization of resources. It is crucial for the durable and enduring existence of all companies.

There are four steps to sustainable resource management.

  1. Find out the needed resources
  2. Acquire them
  3. Manage them
  4. Control resource usage

How is Resource Planning Presented?

To use a resource planning tool, you must first identify the resources and number of employees you need for the project. Make a list of the resources needed for daily/ weekly/ monthly use for the project and set a timetable accordingly.

Then, create a comprehensive project timeframe and resource schedule. ERP can be very advantageous for companies needing a central system for managing all their operations, but due to the sheer amount of data integration and system complexities, ERP comes with some challenges as well.

According to the Project Group, you should still get used to the fact that resource planning cannot always be 100 percent specific. 

Importance Of Resource Planning

It is crucial to have resource planning because of the reasons mentioned below:

  • It helps to recognize the several resources present in different parts of the country. 
  • It helps in cutting down the wastage of resources. 
  • It helps in the even distribution of resources among the parts that have an extreme shortage.

According to Prosymmetry, resource planning is a key element of any project or business management plan. Some companies use 85% (aggressive), and others use 65% (low-end).

While starting a company, small business owners hire experts for every certain task, which could be expensive. This is why even small companies are implementing ERP systems in the cloud to improve operations from the start.

That's the reason why so many small business owners conjure a lot of several activities themselves. For example, they usually do customer support, accounting, sales, and managing inventories. 

So, what happens if there’s no resource planning?

A survey was conducted by PMI on 4,455 project managers who had issues with planning projects like task completion within budget, meeting deadlines. These issues develop when there’s no effective resources plan. 

  • 48% of projects won’t meet the deadline
  • 31% of projects won’t meet their targets
  • 43% of projects will surpass the assigned budget

Resource planning is a component of the project and cannot be ignored. If you do so, you cannot be fully aware of the budget and number of employees working on the project. The project is destined to fail. 

The profit of a project is directly proportional to the resources needed to finish it. It is easy to assign infrastructure resources and hardware. The actual challenge lies in scheduling and planning the project's team’s time and tasks, and it's a reason that many companies choose to undertake ERP.

Perks of Resource Planning

  1. Knowing your resources and understanding their use will help you avoid obstacles before their existence.
  2. Recognizing if there is a resource over-assigned for a task and measuring the dependency of resources by identifying your team's workload. This will assist you in reducing resource burnout. 
  3. Creating a limit for the number of resources required for every activity. Make sure the limit is followed rigorously.
  4. After knowing what you want to execute a project, you must create the resource plan and calculate the project’s ROI.

stages of resource planning

Is There a Formula for Resource Planning?

If you want to know the formula for resource planning, you've likely faced challenges regarding resource planning. Maybe some operations you're handling are constantly overpowered while others have additional capacity. The features and tools offered in ERP systems are centralized around creating smooth operations, easing finances, and improving profitability through reduced losses and waste.

Or maybe more projects, sales, shipments, or payments are being delayed rather than being delivered on time. Key employees may feel overburdened, and some initiatives might be procrastinated or skipped wholly. So, what's the formula to make sure this doesn't happen? 

Although a resource planning formula isn't sorcery and can't immediately transform your planning, you can improve the complex resource planning process by doing straightforward calculations. For a resource planning formula, you have to use several crucial variables.

First of all, you must be well-versed with employees' FTE (full-time equivalent). This unit of measure points out the availability of a person or his amount of capacity to work during a certain period.

To calculate FTE, you must observe these two things:

  1. Full-time hours of a company
  2. Total working hours of an employee

You can measure FTE by using this equation: FTE = Employee’s working hours/company’s full-time hours.

The other important factors for resource planning are:

  • Availability of the employees (in hours)
  • The actual working capacity of employees (for how many hours an employee can work efficiently)
  • How many employees does a project need? 

If you want, you can measure all of the variables and calculate the resource planning formula manually. However, companies with many resources and projects can upload work calendars and employees' absences or resource availability and calculate FTE.

You will automatically know how much FTE is available for the projects available.

This is exactly why BigGantt uses color indicators to show how busy a person is: red stands for overbooking, orange - shows 75-100% of total capacity and green - when it's less than 75%. 

ERP software is often used to manage operations, track budgets, and properly calculate finances in a way that build on business strategy. In fact, a goal of ERP is to centralize all the operations, finances, and HR tasks and projects into a single, integrated system.

There are different types of ERP software available on the market as well. Some ERP systems can be customized for the needs of any company while others are industry-specific.

stages of resource planning

What is Resource Planning and Its Stages?

Resource planning is linked to sensible and appropriate management of resources, making ERP a natural choice since ERP characteristics and features support resource planning and other business operations in a single system. ERP offers companies many advantages for resource planning and operation management, which often outweigh the ERP challenges in implementation and adoption.

Resource planning involves three stages: resource development plan, planning structure, natural development plans, project plans, and resource conflicts.

The three main stages of resource planning are briefly explained below:

  • The primary stage involves surveys, mapping, and calculating properties and characteristics of resources.
  • The second stage analyzes resources from the perspective of economy, technology, and need.
  • The third stage is action-oriented planning, which stresses using and reusing sources. 

Choosing an ERP system that handles all your resource planning and operational needs is big decision. It's important to understand all your business needs fully and then look for leading ERP vendors who offer the functionality you require. From there, it's wise to compare ERP vendors side-by-side (like Oracle vs. SAP, SAP vs. ServiceNow, SAP ERP vs. other similar ERPs). SAP is an ERP that is offered in a cloud-based system with the ability to customize to most any business or industry, making it a good benchmark to compare with other ERPs.

What Are The 3 Stages of Resource Planning? – Detailed Overview

  • You identify and make an inventory of the available resources across the state's regions.
  • Development of a plan structure endowed with proper skill, technology, and institutional setup for enforcing resource development plans.
  • Corresponding the resource development plans with entire national development plans. 

An accurate resource plan with comprehensive information of employees and resources included in a project is fundamental for successful resource planning. Don't allocate more than three tasks to your resources simultaneously. It could hamper their efficiency.

Prosymmetry postulates that most companies have at least 20% more work in their system than it is possible to complete, what happens is that the system becomes inefficient.

As all projects are unique, schedule modifications are bound to happen. The work allocating structure will also change. Try to reduce confusion in resource allocation to generate better results. A true ERP is much more centralized and robust than project management software tools or individual software systems integrated to accomplish the same goal.