How to benefit your resource forecasting software

Want to make professional resource forecasting, but are unsure of what is important? Here is a guide of which things to consider! ‍

Project resource forecasting -what is that?

Project resource forecasting is predicting project´s future resource needs. Reliable forecasting requires accurate, up-to-date information. Resource forecasting in project management should be based on facts and information gathered from past projects. It is analyzing the past and current, making fact-based decisions, following up those and again analyzing. Getting real time data is vital for a company to keep its flexibility and efficiency. Based on that data, with help of an intuitive resource forecasting software, you can ensure to have the right amount and type of work to your resources. The better you plan, the more successful the result. Forecasting is a fundamental part of knowledge-based management.

What information is needed for resource forecasting?

As base of resource forecasting, you need to gather information about:

your resources, both own and external
your projects
your customers
actual hours
resources overall capacity
resources allocation plan
competencies in your organization

Source: https://www.youtube.com/watch?v=RJJutmWljPQ

What does a resource forecasting tool do?

But how to predict the resource needs like a pro? No tool or software will automatically do the resource forecasting. Neither will it replace communication between people. However, when you find suitable software, it will help you provide just the right information for you to succeed. Tracking future resource supply and demand is critical when planning for the upcoming projects.

A screenshot of a computerDescription automatically generated — Resourcing overview, Silverbucket´s people allocation graph

A great resource forecasting tool will help you with that by analyzing the data from multiple aspects, providing good data and tools to dig into the data and showing the outcomes of the decisions to help you learn and improve. When there is one centralized database for resourcing, everyone in the organization can see the situation. Source: https://www.youtube.com/watch?v=RJJutmWljPQ

With spot on resource planning and forecasting, a company finds the answer: What we need to be doing in the company. Who can do it? Do we have enough time? Are our skills on point? Playing around with random resource forecasting excel templates does not develop the skillsets or improve communication – let alone forecasting of the projects. A reliable resource forecasting tool and resource management tool realistically brings out the pain points in company's resourcing process. Source: https://www.silverbucket.com/blog/what-is-effective-resourcing

Importance of forecasting in project management

We have listed seven reasons, why resource forecasting in essential in project management:

Fact based decision making.

It can create the data for the whole tendering, because you are aware of when you have the resources and competencies to take on new projects.

It increases the utilization rate of the company.

It makes reacting to things such as overload and underload easier both on individual and company level.

Reliable predictions help to react to situations in advance and avoid surprises.

If a new kind of expertise is needed, a proper tool will show the need well in advance.

Knowing in advance when you will need new employees helps you to plan recruitment in a managed way.

Resource forecasting software - an invaluable helper in project business

Resource forecasting is an important competitive advantage whilst lack of forecasting can lead to losing customers and new deals. To some extent, spreadsheets might help, but to improve both resource planning and resource forecasting, a proper tool is an invaluable helper. Successful resource forecasting contains:

Optimizing the personnel’s use of time to maximize efficiency, leading to increased billing and profit.
Proactively adjusting to market trends and changes by training personnel and maintaining competencies. Eventually, this boosts the company’s revenues.
The ability to adapt flexibly to changes in demand.
Minimizing excessive workloads and consequent exhaustion.
Ensuring the right people have been allocated to the right jobs and avoiding idling.
Providing the right information to supervisors so they can manage their teams better.
Reacting to changes in the utilization and billing rates. Ensuring that projects remain on budget and making changes based on lessons learned.
Ensuring that projects succeed, and schedules are kept. This will keep customers satisfied, which means business success and growth over the long term.

Monitoring how plans compare with actual working hours.

Source: Resource forecasting in project business (silverbucket.com)

A self-respecting resource forecasting software offers tools to pore over to all above listed information.

Resource forecasting helps a company keep its focus

Want to have a quick and easy view of your resourcing status? With the help of proper resource forecasting software, you to check your status now and see how it will look in the future. How much free capacity is available? Is there enough billable work in the sales pipeline? How much of the total is purchased from subcontractors? Those are all questions which good software will answer.

With precise resource forecasting, a company can see even years ahead if there are resource management issues coming on projects. A resource forecasting software allows the employers to easily observe the availability of their team members, which makes reacting to things such as overload and underload easier.

Do you know how much of your work consists of internal development projects and how much is billable project work? When you do, it´s easy for you to ensure that your organization keeps its focus.

How realized hours help resource forecasting?

Great resource forecasting software also provides a possibility to compare actual results with the resource plans. That way you see what your organization did well, and which areas of resource forecasting should be done better. Reports of your actuals hours and plans from different angles enable you to plan and forecast better, and more precise projects from a practical and financial standpoint.

A filtered view of allocation accuracy in Silverbucket

How skills tracking elaborates resource forecasting?

You can quickly find the perfect resource for your project with the help of a resource planning tool that enables you to use competencies in resource planning and forecasting. It also helps you to select the most cost-effective resource plan, optimizing the use of your company´s skills.

For more accurate resource forecasting, it is a forte if you have competence analysis at hand. Having a bird eye view on how much your organization´s competencies are allocated compared to the capacity, helps you to forecast when you can take next projects under work.

A screenshot of a graphDescription automatically generated — Analyze your company's competency need and utilization with Silverbucket´s competency analysis

Achieve better financial results with resource forecasting

It is important to have the link between projects and people visible for being able to do more precise resource planning and forecasting, because that keeps the business moving, was said by a Silverbucket customer (Source: Case WSP: Resource management software helps business flourish). To forecast even better, you might want to monitor the budgeted hours, expenses, and income. A proper resource forecasting software will help you compare budgeted values with realized values and analyze more than one project at a time.

A project resource management tool can create a soft backlog data for the whole tendering. It helps a company to reach better awareness about projects and visibility further in the future. With the help of reliable predictions, companies can react to situations in advance and avoid surprises.

Top five KPIs in resource forecasting

A resource forecasting tool should have diverse reports to help you to make better decisions. Resource forecasting related reports provide answers to questions like what our utilization rate is, status of income and hour budgets or invoicing forecasts. With that information, you have a good overview of projects' resourcing needs and forecasts. An optimal resource forecasting software is a source of important KPIs. KPIs are essential for resource forecasting, because they help you make informed decisions by identifying trends and tracking progress.

Five important KPIs for project resource management and forecasting are:

invoiceable work

utilization rate

resourcing rate

resourcing demand rate

the opportunity rate.

How to follow the KPIs with resource forecasting software?

Invoiceable work means estimated invoicing rate compared to capacity. It is important to have a clear view of the average invoiceable projects plan of each person and the targeted invoicing rate in one view. The targeted invoicing rate, also scaled capacity, tells you how much of each employee's working time is planned to be used to invoiceable projects.

Note: In resource forecasting, it is worth considering also ensuring that there is a little gap to make room for development too. In addition, it is important to keep track of planned absences as well to get an estimate of availability of the people, and for financial estimation too, of course.

In a professional tool, there should be a special report of the utilization rate. Even better, if it comes with a good filter set

Information about utilization rate helps forecasting: When you see the history of invoicing rate and plans in one view and understand where the company is right now, you can set a target for the future. According to our customers, an accurate resource forecasting tool has indeed a very positive impact on utilization rate.

Resourcing rate is the sum of invoiceable and non-invoiceable work and absences. Resourcing rate, in an optimal situation, should follow the capacity of the organization. Low resourcing rate reveals un-optimal use of a company's resources and is a sign that resource forecasting needs improvement. Silverbucket helps optimize the resourcing rate also by allowing cross-resourcing between organization nodes.

Resourcing demand rate estimates both long-term plans and short-term acute needs together. It is a ratio of all the demands and of all the projects compared with the capacity. In forecasting it´s good to keep in mind that the target might differ with time: On the ongoing week there should not be open demands on projects.

To make meaningful forecasts for the future, the prospective projects need to be considered, too. Those are typically high-level role needs rather than booking people yet. The opportunity rate consists of the prospect projects. It is an estimate of resources needed further in the future. Forecasting wise following the opportunity rate is important, to have more time to react in project business.

Source: https://www.youtube.com/watch?v=RJJutmWljPQ

Conclusion

Resource forecasting is an essential aspect of resource management. Companies using a proper software for this purpose have better understanding of their past resourcing action and effects, are well informed of company´s current situation and capability and can forecast future and react to tenders flexibly. The last masters standing did their resource forecasting with care. Don´t yet have a resource forecasting tool or looking for a better one? Silverbucket is an intuitive tool which welcomes you to the kingdom of resource forecasting and resource management. Try today!