Capacity Management is essential to ensure an enterprise’s smooth and productive functioning. With proper resource planning and project planning tools, you can plan the future and effectively work in the present.
What is Capacity Management?
Capacity Management refers to the planning, tracking, and evaluating company resources to determine if they can bear a new project from inception to completion. Capacity planning is the assessment of available resources to check if there is a window to take up new assignments. It is a high-level process that includes checking the availability of various departments or machinery to determine if the current situation can accommodate new customers or orders.
Capacity Management vs. Resource Management
Often used interchangeably, Capacity Management and Resource management are different concepts. Resource management, also known as resource allocation, is an operational-level process. It involves distributing the available resources to various projects based on the requirement. For example, there can be a need for the same skill in two projects, and only one person is available for the duration. Resource planning helps to divide that resource (in this case- the person’s hours) between the two projects. With proper resource allocation, two things will happen in this case. Firstly, the company can fulfill the requirements of both projects and secondly, the person will not feel overworked. Thus, resource management helps to avoid underutilization and overutilization of resources.
On the other hand, capacity management is more of a demand-supply process.
Under capacity planning, we measure the available resources (supply) against the number of projects (demand). It helps assess how many resources to allocate, how many hours to put in, and, consequently, how long the project will run.
How does Capacity Planning Help?
Capacity planning software with project planning tools can evaluate complex details humans overlook. Since it has access to all the data, it can make an informed decision about the current situation. The CPT does forecasting by calculating every change in the set schedule. It can prepare you for obstacles by giving you an insight into the future. No human can analyze all the variables and complexities to derive the end accurately. Still, capacity planning software can do it for you. This software needs access to your database. It will consider all the information to give you real-time analysis that auto-updates whenever a new variable is introduced. Unlike humans, AI does not make educated guesses based on undefined variables; it analyzes all the data it can access to make an informed prediction. The predictions can change with every new information fed into the system and real-time analysis.
Organizations practice Capacity management based on three parameters-
Team (hours)- Before committing, you should have a clear picture of the group- which members will be making the team, who will head the project, and how many hours each person can devote.
Skills: You do not need a big team to execute a project successfully; you need a skilled team. When there are members who have the required skill set, it is easy to ensure the success of a project.
Budget: Despite the best efforts of a team, a project will stay in the pipeline until there is enough capital to support the endeavor. It can be in finances, software, machinery, and equipment.
Capacity Management Best Practices
Capacity planning affects how an organization tackles work pressure and juggles multiple assignments. If done correctly, capacity planning can increase the Productivity of an enterprise through the proper utilization of available resources.
You can follow some Capacity Management best practices to ensure that you are continuously operating at optimal capacity levels.
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Have a clear view of all the resources in your capacity. Have updated reports of all the human capital, finances, machinery, and other immaterial resources before you start. Estimates, even calculated assumptions, lead to significant problems and cause roadblocks. To avoid these situations, you should know the details and the big picture of the allocation of assets.
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Knowing the possible roadblocks you can face will make you better prepared for them. Test evaluation with different variable values and see how they impact the consequential result. You can put contingencies in place if you know how each situation will turn out.
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Another excellent approach for capacity planning is to analyze history. It will give you critical insight into the operations and help you determine how likely those scenarios will occur. You can make a list of commonly occurring problems and prepare in advance.
Some More Practices to Operate at Your Best Optimal Level
- Prioritize task allocation and continuously track the resources for effective utilization. An enterprise can run its projects smoothly and take up more projects with proper resource management. The project runs smoothly when all the members know the tasks they must complete within the allotted time.
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Do not function on estimations. Generate accurate statistics for capacity demands. You can allocate the right resources in an undertaking when you know how many resources a project needs- such as human capital with specific skillsets, software, and machinery requirements, and hours.
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Risk identification is an important project planning tool under capacity planning. The project will stay afloat if you have a contingency for possible obstacles. Otherwise, it can fail due to a shortage of resources or other external factors. Delays can pile up on top of one another.
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CPT promotes transparency among the team members so everyone is on the same page. It is convenient to track the progress, avoid overload, and boost Productivity. With a clear picture, planning becomes more manageable.
Boost Productivity using the Coexsys Project Cloud Platform.
Capacity planning is essential for your organization as it helps determine the available resources and how to use them most effectively. Coexsys is a cloud computing project management providing solutions for enterprise-wide resource management with capacity management and product planning tools. Get AI-powered project performance reports, view audit logs, manage schedules, and track budgets with a collaborative interface. Coexsys helps you plan for the future and improve your function with each endeavor. Related article: How Cloud-based Task Manager works?
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