According to a report released by IDC, 25% of IT projects experience complete failure”.
One of the primary reasons for a large number of project failures is the absence of an effective resource planning process. Consider the following scenario: what happens when an IT firm sets a delivery deadline for a particular software; however, there is a shortage of personnel to carry out tasks?
They resort to last-minute hiring and leverage high-cost, on-demand IT professionals to resolve this issue. However, it leads to budget overruns and lower profit margins.
Therefore, to ensure your IT firm’s long-term success and viability, managers must have a clear and actionable resource plan that optimizes their workforce’s potential and guarantees better project management.
This blog discusses various benefits of resource planning in IT organizations and how SAVIOM‘s advanced resource management software can help.
Let’s begin-
1. Factors that influence resource planning process in IT firms
Resource planning ascertains that the right workforce with the right expertise is allocated to the respective projects. Several factors influence resource planning in the IT industry. It includes:
Business goals and objectives: It helps IT firms to identify future skill requirements and ensure the availability of these resources to improve organizational efficiency.
Project scope and complexity: It determines whether the firm can fulfill the resource requirements without potential obstacles hindering project completion.
External factors: Resource planning in IT firms is also influenced by external factors such as dynamic economic conditions, labor laws, industry trends, etc.
Technological advancements: The advent of new technologies, like AI, blockchain, and IoT, also impacts resource planning. Therefore, staying abreast of these developments is important to gain a competitive advantage.
Now that we have established the factors that affect resource planning, let’s examine some of its advantages.
2. Benefits of resource planning in the IT industry
Implementing a dynamic resource plan is essential for the IT firm’s efficiency and success. So, let’s delve deeper to understand how it helps achieve this objective.
2.1. Bridges capacity vs. demand gap of IT employees proactively
When a pipeline project reaches a certain probability of closure, an IT firm manager evaluates the requirements and monitors employees’ capacity to ensure they have enough resources to kickstart the project. Additionally, since tech resources work on multiple projects simultaneously, resource planning enables managers to identify skills gaps and implement appropriate measures to bridge the same.
For instance, if there is resource excess, managers can bring forward future projects or sell additional capacity. On the other hand, in case of a shortfall of IT employees, managers either leverage benched personnel, organize appropriate upskilling programs, or implement planned hiring to mitigate this challenge. Thus, resource planning helps to bridge the demand gaps effectively and reduces the instances of last-minute hiring of high-cost resources.
2.2. Helps deploy low-cost global IT consultants
Effective resource planning helps managers to identify and allocate cost-effective IT resources to different projects. Based on the nature of project requirements, IT organizations can leverage onshore/offshore/nearshore delivery models to provide cost-effective services. Thus, by utilizing low-cost competent global consultants, IT firms can successfully reduce resourcing costs.
For example, an IT firm that primarily caters to European clients opens an onshore office in Paris to handle client-facing activities such as sales. Simultaneously, it establishes a nearshore office in Poland to oversee software development and testing. Finally, an offshore office is set up in India to handle back-end services such as data analysis and maintenance. By leveraging the IT talent in these locations, the firm can offer a broad range of services while reducing resourcing expenses.
2.3. Helps create the right mix of a blended workforce
Resource planning enables managers to evaluate the project demands, identify the need for general/specialized consultants, and create a blended workforce. Based on that, they can leverage permanent employees for recurring needs and a contingent workforce for a one-off skill demand.
For example, an IT company needs to implement an AI-based solution for developing a chatbot for customer service. Instead of hiring a full-time employee, the firm can employ a contingent chatbot developer. This would enable them to access niche-skilled, on-demand resources without incurring additional overheads. In addition, it also helps IT organizations to better respond to last-minute scope changes, preventing firefighting for competent resources at the eleventh hour.
2.4. Maximizes profitable utilization of IT personnel
Organizations must optimize the billable utilization levels of their IT personnel to enhance operational efficiency and improve their profit margins. With resource planning, managers can effectively assign employees to billable tasks and maximize profitable utilization. Also, in case of any deviation, they can implement corrective measures to manage the situation.
For instance, a senior developer skilled in Python is frequently allocated to work on maintenance tasks and bug fixes for 50% of their capacity. In this case, the manager can reallocate the senior consultant to development projects requiring specialization in Python. This will help the firm to utilize the developer’s skills effectively to generate revenue, thus maximizing productivity and enhancing profitability.
2.5. Helps manage and maintain an optimal bench size
When IT projects are near completion, numerous resources are released from projects at once, leading to a sudden surge in the bench size. If managers don’t leverage these available resources, it will result in financial losses and impede the organization’s progress. Therefore, effective bench management is crucial for preventing the loss of business opportunities.
With efficient resource planning, managers can predict when a resource will hit the bench and allocate those professionals to upcoming IT projects well in advance. Furthermore, it helps combat unanticipated challenges such as a sudden ramp-up in resource demand, unplanned attrition, employee absenteeism, decreased productivity, etc. Thus, by maintaining optimal bench strength, managers can leverage the right resource available at the right time for successful project delivery.
Now let’s see how using advanced resource management software can aid in achieving these advantages.
3. How can modern ERM software streamline resource planning in IT firms?
Embracing technology in resource planning can significantly enhance the ability of employees to accurately plan, forecast, and allocate resources at the right time and cost. Through Saviom’s advanced resource management capabilities, IT firms can utilize their workforce optimally.
- The tool provides 360-degree visibility into IT projects, BAU activities, vacations, etc. In addition, the software maintains an up-to-date competency matrix to match the skillset with the right task.
- Additionally, using the tool’s resource planning solutions, advanced filters, and other selection criteria, managers can uniformly distribute work among employees across different departments. This enables IT firms to utilize competent resources residing in low-cost locations at an economical rate.
- Next, the capacity vs. demand report helps identify the gaps between resource capacity and project demands across the IT firm and looks into multiple channels to bridge them effectively.
- Furthermore, the forecast vs. actual reports and utilization color-coded heatmaps help supervisors implement corrective measures in advance if the workforce is over/underutilized. It also helps them to mobilize skilled IT consultants from non-billable or low-priority work to billable or high-priority projects.
- Similarly, with people-on-the-bench and project vacancy reports, managers can oversee resource schedules, determine when they will be rolled off from projects, and allocate suitable work well in advance.
- Moreover, the what-if scenario feature provides IT managers with complete information on how various outcomes of specific scenarios can impact the firm. This enables managers to select an ideal resource plan and make informed decisions on future projects.
All these features of the resource management tool facilitate efficient resource planning.
Conclusion
Resource planning is critical to improving project delivery efficiency. Without it, IT firms will struggle to manage their personnel and incur additional costs. However, by conducting resource planning and implementing an advanced resource management solution, IT firms can experience the abovementioned benefits and resolve resourcing bottlenecks, thereby securing the firm’s bottom line.
