Executing best practice principles is an often overlooked requirement to accurately forecast an organization’s resources on a continual basis. Whether it’s a Professional Services Firm using Professional Services Automation (PSA) or an internal IT group using a system for Project Portfolio Management (PPM) the same principles can be applied for successful Resource Capacity Planning Forecasting. When creating such a forecast, first distinguish between the “target” (what an organization wants to achieve) and the “forecast” (what the reports say). After distinguishing between the two outputs build the forecast and target with the following characteristics.
The Characteristics of Healthy Forecasting
- Actionable: Excessive effort to apply too much data can affect the logical decision making ability of executives who may need to make hiring and firing decisions based on the information provided. Bad decisions can result from including data or extra “noise” that is not related to revenue or utilization.
- Aligned: The treatment of the forecast and target should be the same in the way they are created. This means their formats should be identical, and the numbers and data input should be consistently applied.
- On Time: If the forecast is one that shows “over a cliff” and unforeseen problems, the information needs to flow up the chain of command quickly.
- Cost Considered: If the forecast is within range and the output is a known and accepted target, then there is no need to spend additional time on it when the data does not require a decision.
- Reliable: If the forecasting process has yielded pressure points that require an executive decision then all scenarios should be shown when the forecast is presented, including data-driven remedial action recommendations.
Resource Capacity Planning Forecasting is a continual activity that applies modest amounts of knowledge in a disciplined and reliable way. Resource Managers who adopt the characteristics above when forecasting for improvement efforts can help executives drive their organizations toward desired targets. When done correctly and consistently this process also has the potential to positively affect internal perspectives, practices, politics and processes that support growth and security of a business.
By Alan Crean, Changepoint’s Subject Matter Expert in PSA, PPM & Resource Management within IT Shared Services Organizations