Instantis resource management maturity model (white paper)

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  • 1. The Resource ManagementMaturity Model™A Guide to Defining and Executing anEffective Resource Management StrategyInstantis, Inc.September 2011Copyright Instantis, Inc.
  • 2. Table of Contents 1. Introduction 2. Business Drivers and Benefits 2.1 Business Drivers 2.2 Benefits 3. Model Overview 3.1 Context 3.2 Levels and Dimensions 3.3 RIMM Summary View 3.4 Interpreting and Using the Model 4. Terminology 5. Detailed Level Descriptions 5.1 Level 1 – Work Visibility 5.2 Level 2 – Controlled Assignment 5.3 Level 3 – Governed Capacity 5.4 Level 4 – Schedule-Driven Availability 5.5 Level 5 – Granular Management 6. Summary and Key Takeaways 7. Next Steps 8. About Instantis Copyright Instantis, Inc.
  • 3. 1. IntroductionThe Resource Management Maturity Model™ (RMMM) enables organizations to define andexecute an effective resource management strategy. It accomplishes this by helpingstakeholders better align resource-related information needs with their level of project portfoliomanagement (PPM) process maturity and technology enablement. Information Needs Optimized Resource Deployment Process Maturity TechnologyThe RMMM identifies a logical progression of resource management process sophisticationwhich is enumerated as five levels of maturity. Each level of maturity is described along sevendimensions. Organizations can use the RMMM to ensure they can manage project resourcesand capacity at the “just right” level of granularity for their business. 1 2 3 4 5 1 2 3 4 5 6 7The RIMM was developed and refined in consultation with resource management practitionersacross multiple industries, internal deployment consultants and industry analysts. As such, itrepresents a blend of: Copyright Instantis, Inc. Page 1
  • 4. 1) Observations on how organizations actually manage resources based on significant anecdotal evidence gathered from direct and indirect exposure to hundreds of resource management scenarios, and; 2) Recommendations for how best to manage resources based on this collective experience of successes and failures.2. Business Drivers and Benefits2.1 Business DriversThere were several motivations for developing the RMMM. They include: 1. Business importance of resource management. Effective resource management is vital for most organizations because resources represent a major, if not the primary, cost of doing business. As a result, maximizing the return on investment in people is critical to achieving strategic business and financial goals. 2. Track record of resource management initiative failures. Many organizations have launched initiatives to improve their resource and capacity management process – including implementing resource management software technology – and have failed. The root of these failures is a fundamental misalignment between the granularity of the level of information needed to make effective decisions (i.e., not too much information; not too little information), the maturity of the process associated with the assignment and tracking of resources, and the capabilities and the influence of the supporting resource management software. For example, the software may be designed to enable a resource management process that is much more sophisticated than what is required to provide the right level of information in a particular organization and it may assume a level of process maturity that does not exist. Frequently, this mismatch is not apparent until after the software is implemented. 3. Need for focused guidance. The RMMM fills a void in the PPM shared-knowledge and best-practice landscape. While there are several excellent project and portfolio management (PPM) maturity models available from high-quality sources – such as Gartner, PM Solutions and the Project Management Institute – the scope of these Copyright Instantis, Inc. Page 2
  • 5. models is broader. There is little guidance available that is focused exclusively on resource and capacity management issues.Specifically, most organizations have recurring difficulty in answering some seemingly simpleand other more challenging questions from stakeholders such as: • “What are these resources working on?” • “Why is it so difficult to take on new projects?” • “How come these resources are always overbooked, don’t you control how work gets assigned to resources?” • “Will we have enough available capacity in three months to take on these new important projects?” • “Do we have the right mix of skills to meet project demand?” • “What is the cost of this group of resources for this month on this set of projects?” • “How do I de-prioritize the work already under way to make room for new work?” • “Can you spare this one critical resource for this period – it is really important?”Guidance is needed in helping organizations focus on identifying and answering the mostimportant questions consistently and understand how to take measured steps in deploying the“just right” level of supporting process and technology.2.2 BenefitsThe benefits organizations can expect to realize by adopting the Resource ManagementMaturity Model are as follows: 1. Common Language: Provide resource managers, portfolio managers and business executives in project-intensive organizations with a framework and common language for communicating about resource management objectives, issues and outcomes. 2. Roadmap: Deliver a roadmap and a guide for stakeholders that helps them characterize their current level of maturity and determine the optimal, aspirational level of maturity. 3. Clarity: Expose clearly the implications and consequences of aspiring to or operating at a particular level of resource management maturity in areas like data gathering and reporting requirements, software technology selection, governance infrastructure, and resulting business benefits. Note that higher is not necessarily better for all organizations. Copyright Instantis, Inc. Page 3
  • 6. 4. Software Selection: Prepare stakeholders to make better assessments of PPM software options for resource management and choose the solution that is best suited to meet current and projected needs.3. Model Overview3.1 ContextThe RMMM applies to resource-constrained environments including organizations that managea handful of resources as well as those that manage hundreds and even thousands ofresources. It is relevant across many industries and different project environments such as IT,professional services and product development and delivery. However, it is not geared forschedule/budget constrained environments where resource/capacity is not always an explicitbusiness driver (e.g., construction projects).For the purposes of the RMMM, the resource management discipline, at its core, is primarilyconcerned with managing the work assignments, time usage and cost of a set of resources.Work is accomplished via the assignment and completion of project and non-project work,although the emphasis is on project-oriented work. At the project level, Project Managers (PMs)create a need to utilize individual resources based on project schedules and required roles andskills. Line managers or resource managers have control over the supply and assignment ofresources. A governance structure may be put in place to oversee the entire process at theportfolio and aggregate capacity and demand levels.Effective resource management enhances project portfolio success by ensuring that projectsare staffed with the right resources (e.g., roles and skills) in a timely manner and that adequateresources are available to address current needs and future demand. However, project successdepends on a number of other factors which are outside the scope of the RMMM. For example,the definition and delivery of project goals, individual performance and contribution, schedulingbest practices and risk assessment and mitigation are not addressed by the RMMM.3.2 Levels and DimensionsThe RMMM consists of five maturity levels. The specific characteristics of each level aredescribed along seven dimensions. Copyright Instantis, Inc. Page 4
  • 7. The five levels of resource maturity are listed below along with a simplified definition: Resource Maturity Key Defining Characteristic(s): Model Level Level 1: Work Organizations have visibility to who is working on what. However, Visibility resources are assigned to work without any control or oversight. Level 2: Controlled A formal resource assignment approval process is introduced. However, Assignment approvals are informed only by resource availability information. Level 3: Governed The focus shifts to capacity management and the introduction of project Capacity priority considerations requiring more structured governance. Level 4: Schedule- The resource assignment approval and capacity management processes driven Assignment are driven by project schedules at the phase level. Level 5: Granular Full task-level project schedule details are used to drive the resource Management assignment and capacity management processes.A brief definition of each dimension follows: RMMM Dimension Definition Names Assignment This is the level of detail at which resources are assigned to work. The Granularity duration may be driven by dates at the project-, phase- or task-level. The utilization may be a constant value or may be time varying for a specified duration. Project Roles This refers to any standardized and distinct roles played by a resource or group of resources on a given project, such as project manager, Copyright Instantis, Inc. Page 5
  • 8. software developer, business analyst, etc. Roles allow the organization to create attributes and policies for a group of resources, such as cost rates, maximum number of assigned projects per role, etc.Resource Cost This is the labor cost of a resource that results from a work assignment. Resource cost may refer to planned cost or to actual cost. Cost may be tracked for a time interval or at the project-, phase- and task-level.Resource Approval This is the process of approving the assignment of a resource to work at the particular level of assignment granularity. Note: This is a critical dimension of resource management because it has implications for required governance and process complexity.Capacity Planning This is the strategic portfolio-level planning process aimed at ensuring that the most important projects are resourced and that resource utilization is optimized within the constraint of aggregate resource capacity. This involves shifting and removing proposed and ongoing projects; adding or removing resources; and then making the necessary resource assignment adjustments to accommodate the higher priority projects.Governance This is the decision-making process and organizational body that oversees the resource approval, portfolio prioritization, demand management and capacity planning business processes.Business Value This is the key business value that organizations can expect to realize at a given level of maturity. Copyright Instantis, Inc. Page 6
  • 9. The assignment granularity dimension is a key maturity level driver. Here is an illustration of the key attributes.100% A resources is assigned a Level 1/2 fixed/constant utilization percentage for the 50% duration of the project 0%100% Level 3 A resource’s utilization can vary within duration of50% a project 0%100% Level 4 A resource’s utilization can vary by project phase50% (driven by project WBS) 0%100% A resource’s utilization Level 5 can vary by individual project activity (driven by50% project WBS) 0% S E t Copyright Instantis, Inc. Page 7
  • 10. 3.3 RMMM Summary View Level 1 Level 2 Level 3 Level 4 Level 5 Work Controlled Governed Schedule-Driven Granular Visibility Assignment Capacity Availability ManagementAssignment Assignment at Assignment at Assignment at Assignment at Assignment atGranularity project level, fixed project level, fixed project level, project schedule, project schedule, % % possibly non fixed phase level. granular activity % level Non Project work: Non Project work: Non Project work: fixed % of capacity project placeholder Non Project work: phases in Non Project work: multiple project placeholder project ITSM integration, placeholders activities in placeholder projectProject Resources Resources Resources Resources Role to activityRoles assigned as assigned to assigned by role assigned by role typing with RACI Project Manager differentiated roles; and skills at project and skills at phase model; Training, and Team Member roles properties for level level certification only cost rate etc. trackingResource Planned cost at Planned cost at Also, plan vs. Planned cost at Planned cost atCost project level; project and time actual comparison, phase level; Actual granular activity Actual cost from level; Actual cost budget constraints cost from level; Actual cost timesheets at from timesheets at timesheets at from timesheets at project level project level phase level; EVM activity level; Full EVM; activity level budget constraintsResource None, ad-hoc, first Resource Approval RAW at project RAW at phase RAW at all activityApproval come first served; Workflow (RAW) at level, possibly level levels line mgr only project, proposal multiple per level; approval project; approval based on based on priorities availabilityCapacity None Balanced Resolve availability Project phase Resolve availabilityPlanning utilization across constraints by schedules drive constraints by resources delaying, more detailed delay/shift at cancelling resource activity level with proposals, projects availability views; PM involvement based on priority capacity planning can delay projects at phase levelGovernance None Resource or line Governance body Governance body Governance body manager; mostly prioritizes portfolio. actions rely on up- actions rely on up- FIFO demand Oversees capacity -to-date project to-date full project mgmt planning and phase schedule schedule demand mgmt. information informationBusiness Who is working on Controlled and Higher priority Enhanced ability to Maximized abilityValue what; Over- balanced resource projects resource excess to resource excess utilization made utilization, preferentially demand with demand with visible availability. resourced; existing capacity existing capacity resourcing responsive to changing business priorities Copyright Instantis, Inc. Page 8
  • 11. 3.4 Interpreting and Using the ModelFor a given level of maturity, the characteristics at each dimension (in terms of assignmentcomplexity, governance, desired business value, etc.) are linked together by the logic of whatsuccessful organizations actually do or should do to achieve their resource management goals.For example, at Level 1 the absence of Resource Approval implies the absence of a CapacityPlanning and Governance process. At Level 3, a governance body is required to decide projectpriorities which, in turn, are a pre-requisite to implement Capacity Planning. As a result, ingeneral, it is recommended that organizations implement all of the processes and dimensionsassociated with each maturity level before pursuing the next level.However, some organizations may be at one level of maturity along some dimensions while atother levels of maturity along other dimensions described by the model. And, during the courseof this journey, organizations may continue to operate at different levels of maturity for a givendimension than suggested by the model. For example, at Level 2, some organizations may beoperating at Level 3 in terms of Assignment Granularity, but are better characterized as Level 2organization because there is no governance structure.A key value of the RMMM is in helping organizations expose whether or not these variancesfrom the best practices represented by the model are:(1) The result of conscious and valid organizational decisions (based on unique organizationalfactors such as corporate culture, industry context or other considerations), or(2) Symptomatic of issues or areas of dysfunction that need to be addressed. For example, itmakes little sense for an organization to invest heavily in a Capacity Planning process withoutputting in place a governance structure that can also perform demand management.A fundamental tenet of the RMMM is that higher is not necessarily better. Most organizationswill find Level 3 to be the optimal target. Organizations need to be careful before setting theirsights on Level 4 since it entails additional process complexity which may not be justified by thebusiness benefits. Very few organizations will find Level 5 to be the optimal level at which tooperate simply because of the potentially onerous information and supporting technologycomplexity and process maturity demands. Typically, this level of maturity is appropriate forspecific types of resource-intensive scenarios where resource scheduling sophistication iscritical. Copyright Instantis, Inc. Page 9
  • 12. Finally, it is important to note that the RMMM makes clear what an organization must do in orderto operate successfully at each level. However, by itself, it can not prescribe the right level ofmaturity for your organization. That, of course, depends on a number of case-specific factorssuch as industry context, organizational culture, leadership style and technology experience.The probability of successful implementation of these processes must be the first guide toselecting the desired level. The target business value at that level must be aligned with thedesired benefits. If not, the organization can take measured steps to implement the process andorganizational changes necessary to get to the next level.4. TerminologyThese are key terms and definitions used in this Model. Key Terms Definition Resource capacity This is the total time for a given resource that is intended to be managed. The units of capacity are time per duration (e.g., 40 hours per week) or a fraction (e.g., 50%) of an FTE (full-time equivalent). Usually, organizations choose to subtract a fixed fraction of the capacity “off-the- top” for non-project work and choose to track in detail the utilization for project work. For example, a 40 hour per week employee that has 20% of the capacity set aside for non-project work has capacity designated as 32 hours per week. As an alternate example, an organization may view the capacity as 40 hours per week and track the utilization for both project work and non-project work in this 40 hour per week capacity. Some organizations may also choose to reduce resource capacity by time not available for non-work such as vacations and holidays. Resource capacity can be aggregated across a group of resources (e.g., by organization, by role). Resource utilization This is the sum total of a resource’s assignment to work for a given duration. The work includes only project work if the capacity is defined to exclude non-project work as describe above, and vice versa. Utilization has units of time per duration (e.g., hours per day) or a fraction of capacity (e.g., a resource may be used 20 hours per week or 50% of Copyright Instantis, Inc. Page 10
  • 13. capacity on a project). Utilization may be specified as an effort that is spread evenly over the given duration (e.g., a resource is used for 100 hours for the duration of the project or 20 hours for the duration of a phase of a project). At a further level of detail, the effort specified may be un-even (e.g., a resource is used 10 hours in week 1 and 40 hours in week 4 of a project). The Resource Assignment dimension describes the granularity of the per-project utilization that is typical for each maturity level.Resource availability This is the difference between capacity and utilization for a given duration. This is the time available for a resource to be assigned to more work. Availability has units of time per duration (e.g., hours per week) or fraction of capacity.Resource demand This is the incremental potential work assignment for a given duration for a resource driven from proposed projects or incremental work requests associated with on-going projects. Demand may be greater or less than the availability for a given duration.Activity This is the generic name for any level of project work identified in a project work breakdown schedule (WBS). The highest level activity of a WBS is referred to here as a phase. Phases may be broken into a series of lower-level activities such as tasks and deliverables.Resource Approval This is the process by which a resource is assigned to work for a givenWorkflow (RAW) duration. The assignment may be for a proposed project (also known as a proposal) or for incremental work associated with an ongoing project. Broadly, the process has the following workflow: 1. Request Parameters: A request is made by the project manager for a resource that contains: a) A start and end date which defines the potential request duration. Depending on the maturity level along the Resource Assignment dimension, the duration may be determined by project start and end dates, or some other significant dates within a project, or tied Copyright Instantis, Inc. Page 11
  • 14. to the dates of a specific phase of a project or a specific lower-level activity of a project. b) The effort (in units of hours/days/weeks, etc.) required from the resource in the request duration. The effort may be represented as the average percentage of time that that the resource is expected to be utilized for the requested duration. The effort may also be represented by specific hours, days, or weeks.. c) The resource request flexibility with regard to (1) a specific named individual vs. anyone matching the role and skills requirement and (2) availability requirements (e.g., only full- duration availability is acceptable).2. Request Routing: The request is sent to a specific person playing the role of resource manager. In many organizations this may simply be the resource’s direct line manager. There may be a distinct resource manager for a set of roles or a set of resources.3. Resource Approval/Denial: The resource manager may consult a “heat map” of the resource being requested to determine availability and additionally may consult project prioritization information. The criteria to approve/deny the request depend on the maturity level. The response may be a simple “approved/denied” or may have nuances such as the ability to provide for partial approval or a hard versus soft commitment.4. Project Manager Next Steps: If the request is approved, the project manager then proceeds to use the resource as desired for project execution. If the request is denied, the project manager may have various actions available to them depending on maturity level. Copyright Instantis, Inc. Page 12
  • 15. 5. Detailed Level Descriptions5.1 Level 1 – Work VisibilityMost organizations struggle with answering even the most basic question: “What are my peopleworking on?” At Level 1, this “Work Visibility” is the desired outcome. At this level, the first stepis to make a comprehensive list of the projects under way in the organization. Then, anassociation is made between resources and projects. This exercise also usually reveals thatresource time is consumed by work outside of projects, often called “keep the lights on work”.Non-project work is treated as simply a fixed fraction that is removed from the resource’scapacity for project-work.The minimal expectation is that projects have a planned start and end date and the per-projectutilization is a constant percentage for the duration of the project. If the project dates areaccurate and kept up to date, it is possible to create a reasonably complete, if not granular,picture of the aggregate utilization of the resources. Since resource costs are known, it is alsopossible to know the planned resource costs by project. There is also usually an interest inknowing the actual costs and this is captured using time sheets which record actual time spentby a resource on a project. Here’s an illustration of assignment over-utilization risk at Level 1 Resources are assigned a Demand for Resource A fixed/constant utilization 100% percentage for the duration of the project 75% Project 3 Resource Utilization 50% (%) Project 1 Project 2 25% time S1 S2 E1 S3 E2 E3 At this level process maturity (assignment Aggregate % Utilization for Resource A granularity) there is a risk 100% of resource over- utilization. 75% Resource Utilization 50% (%) 25% S1 S2 E1 S3 E2 E3 time Copyright Instantis, Inc. Page 13
  • 16. A key defining characteristic of operating at Level 1 is that there is no formal and transparentprocess by which resource assignment to projects is controlled. Resources are assigned toprojects ad hoc or simply by the line-manager’s approval instead taking a holistic view of all theresources. This can result in over-booking and potentially “burning out” a given resource (seeillustration above). This can also result in projects not being successful because the resourcesassigned to them in reality have no available time to work on the project. Likewise, it is alsopossible to under-utilize certain resources while over-utilizing others.Maturity Model Level 1:Dimension Work Visibility DescriptionAssignment • A simple (but complete) list of projects with all associated resources isGranularity created. • A resource’s utilization is assumed to be a constant percentage for the duration of the project (i.e., from project start to end date). • Non-project work is modeled as a non-time-varying percentage of each resource’s capacity which may vary by resource.Project Roles • Role specificity is minimal. Only project managers are identified.Resource Cost • Only aggregate resource costs are planned. • Allocation of planned costs to projects is possible. • Timesheets are in place to capture actual costs of resources by project.Resource • There is no resource approval process.ApprovalCapacity • There is no capacity planning process.PlanningGovernance • There is no governance structure.Business Value • Answers “who is working on what”. Simple resource utilization and availability “heat maps” are possible that can help identify at-risk projects, resource burnout situations, cost reduction opportunities or availability to take on more projects.Next Level When:The organization decides to pursue the next level when there is a desire to pro-actively managethe utilization of resources. Specifically, there is a recognized need to better balance work Copyright Instantis, Inc. Page 14
  • 17. between available resources and to avoid burn-out or project risks associated with andinadequate resourcing process. The creation of a Resource Approval process is the key enablerin progressing to the next level of maturity.5.2 Level 2 – Controlled AssignmentResource Approval is the critical dimension at Level 2. Specifically, the introduction of a processby which resources are assigned to projects (i.e., a resource approval workflow or RAW) drivesthe organization to mature its resource management process along several of the otherdimensions. A resource approval process eliminates the ad hoc nature by which resources areassociated with projects at Level 1.For the newly introduced resource approval workflow (RAW), the level of assignment granularityof the request is simply at the project level. This means that each request includes a start andend date of the project and a fixed average percentage utilization over the duration of theproject. The resource manager performs approvals by consulting a heat map indicating theavailability for each resource and providing approvals only when the demand is less than theavailability. Some organizations may choose to define availability policies that resourcemanagers are expected to follow (e.g., a resource’s availability should never be less than 10%). At Level 2 the Resource Approval Workflow (RAW) ensures that Resource A is not over-utilized Demand for Resource A 100% 75% Project 3 Resource Utilization 50% (%) Project 1 Project 2 25% time S1 S2 E1 S3 E2 E3 At Level 2, the RM can Aggregate % Utilization for Resource A disapprove the request of 100% Resource A for assignment to Project 3 to 75% avoid the over-utilization scenario Resource Utilization 50% (%) 25% S1 S2 E1 E2 time Copyright Instantis, Inc. Page 15
  • 18. At Level 2, note that the resource manager is approving/denying resource requests based onthe viewpoint of the resource availability without considering project priority. As a result,resources can be consumed working on lower priority projects and there is no formal process toredirect a previously assigned resource to a higher priority project. Also, a resource managerthat is considering multiple simultaneous requests for the same resource does not have theobjective, unbiased information needed to make a decision based on business value or priority.This leads to resource approval being driven by “squeaky wheels”, personal favors and otherdubious factors rather than important considerations like strategic alignment. Maturity Model Level 2 Dimension Controlled Assignment Description Assignment • Resources are assigned at the project level and start and end dates of Granularity projects are managed with rigor. • The per-project utilization is specified as a fixed percentage for the project duration. Project Roles • A project team is defined consisting of specific roles and attributes (e.g., cost rates, standard percentage utilization per project). • Standard project team templates by project type may exist. Resource Cost • The organization is able to track planned resource costs by time and project. • Actual costs are based on timesheets at the project level. • There is no control of actual costs based on budgeted (planned) costs. Resource • A RAW process is used to assign resources to projects only after a Approval formal request is approved. • The resource manager approves or denies requests based on availability of the requested resource or resource type (i.e. matching role, skill set). • Project priority is not considered; requests may be approved on a first- come first-served basis. Capacity • Existing aggregate-capacity total (by role, by resource) and aggregate Planning utilization are visible and evenly balanced with relatively few instances of over-/under-utilization. • There is no assurance that resources are being utilized on the highest business-value projects. • There is no easy way accommodate new resource demands from higher value projects by de-prioritizing in-fight projects. Copyright Instantis, Inc. Page 16
  • 19. Governance • There is no governance structure to manage relative project priorities. Business Value • The RAW process ensures that resources are not over/under-utilized, existing capacity is actively managed to a desired availability and that work is evenly distributed across the resources. • It becomes clear if new demand can be resourced from existing availability or if additional resources are needed.Next Level When:At Level 2 an organization reaches a pain threshold and is compelled to mature to the next levelas a result of the inability to:Focus on projects with greatest business impactDynamically respond to changing business prioritiesFulfill new demand by re-prioritizing existing projects instead of simply adding new resources5.3 Level 3 – Governed CapacityAt Level 3 the critical dimension that comes into play is a governance structure that prioritizesprojects and thereby prioritizes existing resource utilization versus new resource demand. Thegovernance organization or steering committee may be referred to as the “ResourceGovernance Committee” or “Portfolio Governance Committee” or go by other names. TheCommittee is represented by stakeholders from both the demand side (projects ideas, requestsand proposals) and the supply side (resources), and the line of business executives who areultimately responsible for the success of the project portfolio. This structure, coupled with thepreviously discussed RAW process, results in the ability to implement a “governed” capacityplanning process.The prioritization process involves determining (1) the relative priority between existing projectsand new proposals and (2) the relative priority between multiple projects running concurrently. Afew key elements of prioritization include setting up and standardizing assessment criteria inhigh level categories like benefits, financial costs and risks. Benefits criteria may include, forexample, strategic alignment, financial return and customer satisfaction. Cost may have sub-elements like project costs and opportunity costs. Risks might be financial, implementation ormarket related. Project proposals are scored using consistent criteria and approvals are made Copyright Instantis, Inc. Page 17
  • 20. through a comparative assessment. New proposals for projects must follow a resource approvalworkflow process (RAW), but at Level 3 the resource requests can be more effectively managedby the resource managers based on the project prioritization information. Level 3 introduces a governance structure which considers project priority when approving project plans This is the aggregate Aggregate % Utilization for Resource A demand for resource A 100% showing a period over- utilization which 75% Project 2 represents a risk to Project 3 project 3 50% Project 1 25% S1 S2 E1 S3 E2 E3 time Aggregate % Utilization for Resource A after Governance action Aggregate % Utilization for Resource A At Level 3 governance 100% can cancel Project 2 and approve Project 3. 75% This action removes a resource-related risk to Resource Project 3 which Utilization 50% (%) governance has 25% prioritized highest S1 S2 E1 S3 E2 E3 timeAt Level 3 a governance committee oversees the capacity planning process. It has full visibilityto aggregate utilization from existing projects and the incremental demand from new proposalsrelative to aggregate capacity. This visibility should include a line-of-sight to any sub-set ofprojects of interest and to any sub-set of roles and resources of interest. Based on priority andresource availability information, the governance body has the ability to dynamically launch,suspend, delay and cancel projects in order to balance capacity with demand in the mostimpactful way to the organization. This is an ongoing and iterative process that reacts toprioritization changes as business conditions dictate. Software technology should be used toprovide decision support using dynamic “what-if” scenario planning that allows examination ofthe resource availability implications of different prioritization decisions. The committee alsodecides whether the capacity of resources available for a particular role needs to be adjustedupward or downward.Level 3 represents the sweet spot of resource management maturity for most organizationsbecause it provides significant benefits in terms of enabling organizations to better alignresources with strategic priorities in the immediate term and over the course of a planning Copyright Instantis, Inc. Page 18
  • 21. horizon. At the same time, assigning resources at the project level of granularity (as opposed toa lower level), avoids many of the pitfalls associated with Level 4 and Level 5 resourcemanagement which drive resource management from the project work breakdown schedule. Maturity Model Level 3 Dimension Governed Capacity Description Assignment • Resources are still assigned at the project level. Granularity • Project start and end dates are managed with rigor because these points bound resource assignments. • Per-project resource utilization within projects can be adjusted upward or downward (i.e., not necessarily constant from start to end date). • Non-project work may be planned using placeholder projects and multiple start/end-date intervals with variable percentage utilization. • It is possible to integrate systems that track non-project work to better inform utilization calculations. Project Roles • RAW process considers resource skills, capabilities, and training to fulfill resource requests. Resource Cost • Planned resource costs by time and project can be tracked. • Thus, total costs and per-resource costs can be computed for each project, for a project portfolio and for a given duration. • Actual costs are computed from timesheets at the project level. • The governance committee may institute a process to ensure that actual resource costs do not exceed planned costs. Resource • The RAW process is not limited to a single request for the entire project Approval duration. • Multiple separate requests/approvals, each with different start/end dates and percentage utilization is possible. • The resource manager approves or denies requests based on availability of individual requested or suitable alternative (e.g., matching skill set, location, cost rate, etc.). • The resource manager can decide between competing resource requests based on the clearly defined project priorities. • The PM may use the additional assignment granularity detail to request the resource for only part of the project duration. • Alternately, the PM may appeal to the governance committee to invoke a capacity planning exercise. Copyright Instantis, Inc. Page 19
  • 22. Capacity • Existing aggregate capacity (by role and by resource) and the aggregate Planning utilization is visible. • Utilization is greater on higher-priority projects with the most business impact. • Higher priority new demand is resourced ahead of lower priority new demand. • If new demand exceeds availability, it is possible to fulfill this demand by re-prioritizing, delaying or cancelling existing projects without adding resources. • “What-if” scenarios can be used to simulate the impact of re-prioritizing, delaying, and cancelling projects. Governance • A governance structure oversees demand management, proposal and project prioritization and capacity planning. Business Value • Organizations are better prepared to support business strategic objectives now and within the planning horizon based on ability to free up resource capacity to accommodate higher priority projects now, as well as anticipate resource demand.Next Level When:Level 4 should be aspired to by organizations that have specific needs for understanding theproject schedule driven resource utilization and these needs outweigh the issues with processand data complexity.5.4 Level 4 – Schedule-Driven AvailabilityThe critical element of the transition from a Level 3 to a Level 4 organization is the use of theproject schedule to drive project resource utilization. This occurs when simple averageutilization of a resource over a project’s duration is deemed to be too coarse a measure ofutilization. It is quite possible that certain resources are needed more in certain phases of aproject. For example, in a software development project, business analysts may be neededmore during a requirements phase while QA resources may be needed more intensively duringa testing phase.At Level 4 project resources are assigned using high-level (e.g., phase-level) activity informationdelineated in the projects WBS. Each phase has an associated utilization that results from thephase start date, phase end date, and percent of capacity spent on the phase or total effort on Copyright Instantis, Inc. Page 20
  • 23. the phase. The summation of these attribute values over all the phases is aggregated to arriveat the resource utilization for a given project. At Level 4 phase-level demand info can lead to better resource utilization and assignment decisions Aggregate % Utilization for Resource A (Level 1,2,3) Here we are at Level 1,2,3 100% resource demand information which shows an over-utilization period. 75% Project 3 50% Project 1 25% Project 2 S1 S2 E1 S3 E2 E3 time At Level 4, Phase level Aggregate % Utilization for Resource A detail for Project 2 allows 100% us to fit Project 2 demand into Resource A’s schedule w/out canceling 75% Project 2 50% 25%An organization may choose to be at Level 4 when this greater detail is meaningful and canhave a material impact on the capacity planning decisions. For example, Project 1 utilizes aresource for 40 hours during a month and there appears to be an over-utilization in week 4 dueto new demand from Project 2 for the same resource for 40 hours in week 4. However, it turnsout that -- based on a phase-based assignment in Project 1 -- the utilization is entirely in week1. Therefore, week 4 is not used by Project 1 and Project 2’s request can be approved. Thus,the extra detail eliminated a “false-positive” over-utilization situation.A second benefit is that it is possible for the capacity planning process to operate at the phaselevel of a project rather than at the project level. In the above example, an alternate resolutionfor the over-utilization may be that the particular phase of Project 2 that needs the resource inweek 4 is delayed, not the project as a whole. This phase delay may have no eventual impacton the project’s business impact whereas delaying the entire project may not be acceptable.Another benefit of WBS-driven resource management starting at Level 4 is that non-projectwork items can also be tracked at a corresponding level of granularity concurrently with projectwork. A placeholder project for non-project work can be created with each placeholder activity Copyright Instantis, Inc. Page 21
  • 24. corresponding to each work item and representing its duration and effort. This enables a unifiedview of the detailed project and non-project work items that consume the time of each resource.It is important to note that this places an incremental but significant burden on the projectmanagers to accurately maintain and update their phase dates, to accurately assign individualresources to the relevant phases and to accurately provide utilization requirements by phase.For example, a portfolio of 100 projects, with 5 phases per project, and 5 resources per phase,requires that a total of 7,500 pieces of information (100x5x5x3) be kept up to date and accurate.If the organization does not possess adequate process maturity, the dependent capacityplanning and governance processes will be driven from a mass of unreliable underlyinginformation.A key challenge at Level 4 is that potential conflicts can result because the time horizons of thestrategic capacity planning process are mismatched with the day-to-day changes made byproject managers at the phase level. For example, the governance committee might meet anddecide that there is a severe resource shortage during a particular timeframe and decide to re-assign resources, delay or cancel projects to relieve this shortage. It may then turn out that theproject manager coincidentally re-arranges the project schedule, freeing up resources thatappeared to governance to be in critical short supply, but the governance committee is not ableto react to this information until it meets at a later time. Maturity Model Level 4 Dimension Schedule-driven Availability Description Assignment • Resources are assigned at the phase level in the project WBS. Granularity • The per-project resource utilization is an aggregate of the underlying per-phase utilization. • Per-phase utilization attributes are phase start date, phase end date, percentage utilization or phase level effort. • Non-project work may be planned using placeholder projects with each representing an item of non-project work. Project Roles • Roles and resource skills are used during project phase assignments. Resource Cost • Resource costs are planned at the phase level. • Each phase has a total resource cost based on the WBS level assignment • Phase level costs are totaled to determine project costs. Copyright Instantis, Inc. Page 22
  • 25. • Actual costs are derived from timesheets and actual time spent on each phase can be tracked. • Additional processes may be used to control actual costs at a per-phase level to be limited to the planned costs. • Earned Value Management is possible. Resource • The RAW process is performed at the phase level. Approval • Each assignment to a phase must be approved through the RAW process along with the phase-level dates and percentage or effort information. • Approvals are informed by resource availability and project priority. Capacity • Aggregate utilization is the summation of all the project phase-level Planning resource utilization rates from individual projects. • Underlying data for all projects and phase schedule changes must be timely and accurately estimated to enable effective capacity planning. Governance • A governance structure oversees portfolio management processes such as demand management, project/proposal prioritization and capacity planning. • There is a potentially undesirable interplay between the project managers’ level of detail and granularity and the high-level governance committee strategic viewpoint. Business Value • It may be possible to accommodate incremental demand with the same set of resources as a result of more detailed phase-level information. • This greater detail may be vital in particular project-intensive and highly resource-constrained scenarios (e.g., can maximize billing rates in services delivery organizations).Next Level When:Organizations aspire to Level 5 when an even greater level of project schedule detail is deemednecessary to perform effective resource management.5.5 Level 5 – Granular ManagementAt Level 5, resource management and capacity planning is driven by the complete and fulllevels of WBS activity detail. Each activity has an associated utilization that results from theactivity start date, activity end date, and percent of capacity spent on the activity or total effort Copyright Instantis, Inc. Page 23
  • 26. on the activity. The summation of these attribute values over all the phases is aggregated toarrive at the resource utilization for a given project.This may be necessary when the phase level information about resource utilization is too coarseand full project schedule detail is necessary and meaningful to the business. Another benefit ofis that non-project work items can be tracked at fuller detail with a placeholder activitycorresponding to each work item and representing its duration and effort. This enables a unifiedview of the detailed project and non-project work items that consume the time of each resource.This places a very significant burden on the project managers to accurately maintain and updatetheir activity dates, to accurately assign individual resources to the relevant activities and toaccurately provide utilization requirements by activity.For example, a portfolio of 100 projects, with 30 activities per project, and 2 resources peractivity, requires that a total of 18,000 pieces of information (100x30x2x3) be kept up to dateand accurate. For most organizations, it is extremely difficult to accurately maintain this amountof information. As a result, most organizations that attempt to operate at this level fail under theweight and burden of additional process complexity (unless the number of projects andresources is small).Many resource management software solutions require organizations to supply this granulardetail to feed the higher level capacity planning and governance processes. This is a key reasonwhy these software implementations are not successful. Maturity Model Level 5 Dimension Granular Management Description Assignment • The complete WBS activity detail feeds into the per-project utilization. Granularity • Non-project considers information derived from IT service management system integration (e.g., trouble tickets) and granular non-project work item visibility. Project Roles • The RACI model (Responsible-Accountable-Consulted-Informed) may be used to further classify the types of activity-resources assignments. • This may have implications for activity-resource demand. For example, resources designated as “responsible” for a project activity assignment may trigger a level of resource (time/effort) utilization while a resource designated as “informed” may not. Copyright Instantis, Inc. Page 24
  • 27. Resource Cost • Resource costs are planned at the detailed resource-activity level. • Each activity has a total resource cost based on the WBS level assignment and the activity level costs are totaled to determine project costs. • RACI may be used to further specify different cost rates based on assignment type. • Actual costs are derived from timesheets and actual time spent on each activity can be tracked. • Additional processes may exist to control actual costs at a per-activity level limited to the planned costs or a specified not-to-exceed planned cost.Resource • Resource approvals are performed at the individual activity level and areApproval informed by resource availability and project priority.Capacity • The aggregate utilization is driven by a summation of all the projectPlanning activity-level resource utilization. • The underlying data for all projects on all phase schedule changes must be accurately estimated and timely to enable effective capacity planning.Governance • The governance process and body needs to be prepared to react to more dynamic and constantly changing project schedule details.Business Value • It may be possible to accommodate even more demand with the same set of resources because of the more detailed activity level information. Copyright Instantis, Inc. Page 25
  • 28. 6. Summary and Key TakeawaysHere are the key conclusions: • The level “Assignment Granularity” detail is the key model driver. The level of granularity an organization chooses to plan and track effort largely drives where it should be along other maturity model dimensions. • There is a “chasm” between maturity levels 3 and 4. Many organizations pre-maturely rush to Level 4 -- which includes activity-level effort roll ups -- and fail. • For most organizations, Level 3 is the sweet spot to strive for providing “just right” process sophistication given the level of information needed by the business to make effective resource-related decisions. • Systems should be configured to align with the level of process maturity and not encourage IT organizations to bite off more functionality than they can chew. RMMM Pictorial Summary RMMM Pictorial Summary At Level 1 there is a Level 2 introduces a resource uncontrolled resource grab approval workflow At Level 3 a governance body Level 4,5 considers project considers project priority activity-level demand Copyright Instantis, Inc. Page 26
  • 29. 7. Next Steps • Assess your own company’s level of existing process maturity and see where it fits in the Maturity Model. You may do this internally by benchmarking with other companies or with the help of a consulting firm. • Examine the business benefits at your company’s maturity level. • If the additional business benefits of going to the next level are important, perform a gap analysis and identify what critical “dimensions” need to progress at your level of maturity. • Communicate the findings to others in your company and get buy-in to fix the gaps. • Lay out a roadmap of how your company should get to the next level and work towards getting there. • Contact Instantis if you need software technology help with your resource and capacity management initiative.8. About InstantisInstantis, Inc. is a leading SaaS-based provider of Enterprise Project & Portfolio Management(EPPM) software used by business process and IT leaders to improve strategy execution andfinancial performance. Leading global corporations like Abbott, DuPont, France Telecom, Lilly,National Grid and Xerox rely on a single system called EnterpriseTrack to fulfill the distinctiverequirements of their strategic project portfolios such as IT, PMO, product development, LeanSix Sigma and sustainability. EnterpriseTrack features comprehensive resource and capacitymanagement functionality that can be configured to support organizations needs across thespectrum of resource information needs and process maturity levels. Copyright Instantis, Inc. Page 27