Lessons from 100 PMOs » Resource Planning

Research for book: How do you balance resources?

Dave B — Wed, 16 Sep 2009 00:23:51 +0000

Over the past few years I have certainly done my share of pontificating on how to balance staff resources against what seems like unlimited demand from projects (and other quarters). But when the rubber meets the road, we all have to find a way to make it work.

All that pontificating and consulting has lead to a request to write a chapter in an upcoming book on this very subject. But before I blindly write based on my experience (and that of my clients), I want to listen. What works for you? How do you really manage your resource loads? What techniques do you use to attempt to get all the work done without burning out your people?

You may reply to me privately, or share you thoughts in this blog post. And who knows, you may be quoted in the book (with your permission, of course)

PMO: Top down vs bottom up project planning

Dave B — Sun, 13 Sep 2009 14:31:30 +0000

This week, I encountered an age old debate: which is better, planning from the top down or the bottom up? It happened to emerge during a discussion about resource planning, but it also applies to cost and budget estimates.

In the finance realm, we are quite use to a top-down model. At the corporate level, an overall budget is set based on expected revenues and the desired profit margin. This is then argued over by the executive team as budget numbers are set for individual organizations. Each VP then takes their allotments back to their directors with specific allocations for each, who then come up with a budget for their specific department.

So, what happens when we apply this thinking to projects?

Using the above model, a cross-functional steering committee would be given a total allocation of both spend and resource effort to cover all projects for the year. They would then set targets for various project investment categories. Perhaps they want to allocate 33% for strategic projects, 33% for tactical, and 33% for maintenance (KLO) projects. They then look at the project requests in the queue and choose based on these allocations.

To complete the top-down picture, these requests have been through a scoring exercise that uses big buckets for benefits and costs (eg: <$50K, 51-100K, 101K – 250K, etc). For more on scoring, see the blog post Too many project requests? Scorecard them!

Of course, there is a counter to top-down, which is bottom-up planning. In this method, each project is analyzed and planned down to the task (WBS) level. Effort is estimated for each task and materials costs are developed for each item to be purchased. The results are then rolled up to the project level, revealing the “true” effort and cost required for each project. These fully vetted requests are brought to the steering committee for approval, and the total of all approved requests gives us the size of the portfolio.

Hmm – both seem to have some merits and some problems.

Bottom-up, or detailed planning, provided a more thourough, and theoretically more accurate, estimate. However, the amount of analysis required can overwhelm the business analysts and project managers. Further, it is common practice to add some buffer to each task in a plan. This can lead to quite a bloated overall estimate.

Top-down, or high-level, planning is much more efficient. It also provides the constraints and big-picture view required to ensure the final list of projects is aligned with company objectives and fits its spending targets.

So, which to use? Truth is, in finance, we use both and then reconcile then meet in the middle. In PMOs, I advocate the same idea. I like high-level planning during the intake of projects so excessive time isn’t wasted on analysis and to ensure the portfolio is within overall targets. But once the initial selections are made, detail planning is crucial. And comparing he detailed plan to the high-level plan can lead to much better overall estimates.

As an example, I had a PM present a detailed plan that was 40% over the initial estimate. Now, the initial estimate was based on actual time and expense records from several similar projects. So, I was able to direct the PM to rethink they’re detailed plan to eliminate unnessecary buffer.

On the other hand, I’ve also seen detailed plans that revealed flaws in our high-level thinking, causing a re-calibration of the high-level estimates.

How do you perform planning in your project driven organization? This is one subject area open to lots of great ideas – and we’d love to hear yours!

Resource Planning Meetings

Dave B — Wed, 15 Apr 2009 23:15:45 +0000

I’ve had this one come up twice in the last couple of weeks. What do you do if, even with all the resource allocations and assignments, all the planning and matching project demand to resource supply – what if there is still a lot of churn? You know, resources are still continually reassigned. Or worse, they flit from one task to another based on pressure from various quarters.

While this churn happens in many organizations, I’ve personally seen it many times in New Media companies. These are firms that create all the banner ads, quick videos, CD promotions, short videos, and other new advertising media. Typically, these engagements are like quick hit projects where items are designed and created in days. And a pool of Web developers or copy writers are working with multiple clients concurrently.

In these high-volume, quick-hit types of environments, we often see a malady we call “resource day-trading”. As the name implies, project or account managers are constantly trading resources to get their work prioritized. Like with stock day-trading, there are serious pitfalls, namely inefficient use of resources, lack of alignment, missed deadlines, and budget overruns.

So, how do you handle these high-churn environments? Set up regular resource planning meetings. We did this at one New Media client (the new media arm of one of the largest ad agencies in the US). We designed reports that showed utilization from the last 2 weeks, and allocations for the coming 2 weeks. These reports were produced on Friday. On Monday, the Account Managers (which are basically PMs) and Resource Managers met. They reviewed the reports, discussed the next week’s priorities, and re-allocated as necessary.

By re-allocating as a group on a regular basis, they almost totally eliminated the ad-hoc reallocation that caused so much trouble. And their productivity (as measured by revenue per employee) improved by 300%!

I have had several clients successfully implement this best practice. It greatly improves communication and makes sure everyone is on the same page. This is one meeting that is attended and is definitely not boring!