Capacity planning is a collaborative process aimed at focusing an organization on medium-term initiatives based on group capacities rather than headcount. It involves all key decision-makers assessing available capacity to create an ordered backlog of initiatives while identifying constraints within the organization. The outcome reveals that a certain percentage of groups will be constrained, providing valuable insights for IT management.

1. Capacity Planning
Dimitar Bakardzhiev
Managing Partner
Taller Technologies Bulgaria
@dimiterbak

2. Capacity Planning is a process
whereby an organization comes
together to agree on what they are
going to focus on in the medium term.

3. Rather than determine the capacity of
the organization based on its
headcount, the capacity is based on
the capacity of each group within the
organization.

4. Purpose of Capacity Planning
• Provide the organization with focus
• Agree a backlog based on the constraints that exist
within the organization
• Limit Work In Progress for the organization
• Avoid locally optimized priorities

5. Outputs from the Capacity Planning
process
• An ordered backlog of initiatives that the entire
organization agrees on.
• A list of the constraints and options within the
organization.
The Capacity Planning does NOT produce a plan or
schedule of work.

6. PREPARATION

7. Participants
• All key business decision makers. If any are missing
they may go outside the process to get their Initiative
done.
• All groups that look after a particular system, service,
component or function within the organization
• Any potentially limited function within the organization

8. Process
• Each group calculates its available capacity. The
default is the number of weeks in the period multiplied
by number of the teams in group, multiplied by 50%.
• Create a roughly ordered list of Initiatives
• An Initiative is a request for capacity in return for value
• Each Initiative should have an owner who is the
guardian of the value delivered by the Initiative
• Each group provides an estimate for the work they will
need to do per Initiative

9. The estimates
• The units for the estimates are group weeks, the work
that a single group can do in a week.
• Estimates not a commitment by the group.
• Ensure that the groups are aware of any work that may
be required of them in the medium term.

10. CAPACITY PLANNING

11. Process
• Go through the Initiatives in order
• For each Initiative, check to see if there is enough
Capacity in each of the groups to deliver all of the work
in the Initiative.
• If there is enough capacity, the Initiative is included in
the backlog and the remaining Capacity of the groups
is reduced by the amount. Whenever the Capacity of a
group becomes zero, the group is identified as a
constraint.
• Eventually, it will not be possible to do any further
Initiatives as they all rely on groups that have run out of
Capacity.

12. If there is not enough capacity in one
or more of the groups
• The decision makers could decide to deselect one of
the Initiatives that has already been selected in order
to free up the capacity.
• An initiative could be reduced in scope. Theoretically it
should be impossible to reduce something that is
minimal but given the choice between nothing and
something, the Initiative Owner will find a way to shave
some functionality off.
• The Initiative Owner and Group Owner could defer the
decision to reject the Initiative by looking for additional
Capacity.

13. OUTCOME

14. • You will find that about 20% of the groups will be
constraints, having used all of their capacity. About
60% will have some work on the Corporate Backlog,
and 20% of groups will have no work on the Corporate
Backlog. This list is gold dust for the IT management
team.
• You now have a backlog agreed by all the key decision
makers, and the list of constraints in the organization.

15. References
Capacity Planning – Chris Matts
http://theitriskmanager.wordpress.com/2014/08/16/capacity-planning/