Resource Planning is the process of identifying, allocating, and monitoring resources (human, financial, and material) to ensure timely and high-quality project delivery. This process involves analyzing available resources, forecasting future needs, balancing workloads, and adapting to changes. The responsibility for resource planning is often shared by the staffing department in collaboration with managers. They are accountable for assigning employees to projects based on their skills, experience, and availability, as well as for monitoring workload and resource utilization efficiency.
This article will be useful for Delivery Managers, HR, staffing managers, project managers, and service business owners. We will explore what effective resource planning looks like in practice, which types of resources require special attention, and what the business consequences may be if there is no clear planning system in place.
All the information presented is based on the practices of the SHERP ecosystem and the experience of working with IT companies that have already integrated transparent planning into their business culture.
Let’s look at two resource planning scenarios: effective and ineffective.
Scenario 1:
A company starts a new project using spreadsheets to plan and track tasks. The project manager does not perform a detailed resource analysis or consider potential risks:
- Unexpected or even scheduled leaves that aren’t reflected in the system leave the manager unaware — making it impossible to account for absences in planning, ultimately causing workflow disruptions.
- The lack of clear task allocation leads to some team members being overloaded, while others are underutilized.
- There is no real-time progress tracking system, making it difficult to identify issues at an early stage.
Consequences:
- Budget overruns due to inefficient resource utilization, missed deadlines, and delays that stem from poor visibility into team capacity and availability.
Scenario 2:
A company launches a similar project using a real-time ERP system for resource planning and management:
- Analyzing current and future resource needs to ensure they align with project requirements.
- Optimizing resource utilization without affecting the project’s critical path.
- Balancing tasks among team members to avoid overloading individuals.
- Using dashboards, structured reports, and pages with intuitive interfaces to monitor progress and team performance in real time, providing both high-level insights and granular visibility across all projects.
Outcome:
The project is completed on time and within budget.
We provide a detailed overview of four key types of resources that require effective management in projects, their impact on project success, and the business metrics used to evaluate performance:
Finances (budgeting, cost control)
Financial resources fund all aspects of a project, including salaries, procurement of materials, and equipment. Poor financial management can lead to budget overruns, delays, or even project cancellation.
Key Metrics:
Cost Variance (CV)
The difference between planned and actual costs.
Gross Profit Margin
The ratio of profit to revenue, reflecting financial efficiency.
People (planning, skills, availability)
Human resources are the driving force behind any project; their skills and availability determine the quality and speed of task execution.
Key Metrics:
Resource Utilization Rate
The percentage of time employees spend on billable activities or productive project-related tasks.
Employee Productivity
The volume of work completed within a given time frame.
Client Satisfaction
An indicator of the perceived quality of the team’s work from the client’s perspective.
Time (timelines, overtime, milestones)
Time constraints define the project’s duration; delays can result in increased costs and client dissatisfaction.
Key Metrics:
Cycle Time
The time required to complete a specific task or phase.
On-Time Delivery Rate
The percentage of tasks completed within the scheduled deadlines.
Return on Time Invested (ROTI)
A measure of how effectively time is utilized in relation to the outcomes achieved.
Specialized Roles
Critical experts—such as system architects or lead engineers—possess unique knowledge. Losing them can significantly impact project outcomes.
Key Metrics:
Replacement Risk Level
The potential impact of losing a key specialist on the project.
Onboarding Time
The time required to integrate and train a new specialist.
Role Criticality
An evaluation of how essential the role is to project success.
What effective resource planning looks like in SHERP ERP: A real-world scenario
Creating and Releasing Resources in SHERP ERP
In SHERP, both the process of requesting and releasing resources is automated and transparent.
The Project Manager creates a request directly in the system, which automatically considers the following:
Specialist workload
The system analyzes the employee’s current workload to avoid overloading.
Grade (qualification level)
Ensures alignment between the task requirements and the specialist’s qualifications.
Availability
The system checks the employee’s availability within the specified timeframe.
This eliminates the need for manual analysis and reduces the risk of errors when assigning resources. Instead of unstructured discussions in Slack, SHERP enables centralized communication between the Project Manager and the Staffing Manager. All requests, discussions, and decisions are recorded in the system, ensuring transparency and a complete history of changes.
Workload forecasting: balancing resources
SHERP provides tools for forecasting workloads, allowing teams to:Identify overloaded specialists: For example, if an employee is loaded at 120%, the system highlights this status for the manager, enabling informed decisions about task redistribution.
Identify underutilized specialists: If an employee is working at only 80% capacity, the system suggests assigning additional tasks to optimize resource usage.
This helps ensure an even distribution of workload and enhances team efficiency.
Why human resources are the most challenging aspect of project management
Human resource management is often the most complex part of project management due to its unpredictability and its influence on all other project resources. Human factors—such as resignations, illness, or interpersonal conflicts—can abruptly change the course of a project, disrupting schedules, increasing costs, and affecting the quality of delivery.
An ERP system integrated with an HRM platform and CEP (Continuous Employee Performance) provides access to essential information such as employee grades, Employee Satisfaction (ESAT) scores, and Individual Development Plans (IDPs). This integration enables project managers to forecast HR-related risks and respond proactively to potential issues.
Accurately predicting risks associated with human resources has a direct impact on a project’s financial performance. For instance, identifying the potential resignation of a key employee in advance allows for early planning of replacements or upskilling, helping to avoid downtime and additional costs.
Therefore, effective human resource management through integrated systems like SHERP ERP is critical for delivering projects on time and within budget.
Want to see it in action? Book a demo.
If you’d like to explore more real-world examples, feel free to check out our case studies — and see how SHERP has helped companies like yours transform operations, improve efficiency, and boost profitability.
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