Project Management Resource Planning
June 13, 2019

How to Use Resource Planning in Project Management?

By Brian McHale

Resource planning is the key to successfully completing a project. But that doesn’t mean it’s easy.

On paper, it sounds simple. “It’s just budget and the people I need.”

But how do you accurately decide how to allocate resources in project management?

And how do you make sure you don’t need more or less?

In this post, we’ll show you everything you need to know about resource allocation in project management.

Forget about whipping out a calculator – things are going to get very, very clear!


What Is Project Management Resource Planning?

In a nutshell, project management resource planning is all about the creation of a document vital to the success of your project: a resource plan.

If you’re a project manager, it’s going to be one of the most important documents you create.

By definition, a resource plan specifies the exact quantities of labor, equipment and materials you need to complete your project.

Or, if you want to phrase it on a more everyday basis: it’s the document that’s going to show your client why you need that many people and that much money. No room for negotiation.

However, getting to those exact numbers can be tricky.

Projects vary; chances are, you won’t work on identical projects.

And even if you have the entire department at your disposal (for example, for projects where the client is your company), you’ll still need to know how to allocate equipment and time.

Fortunately, if you break down resource planning into smaller, more manageable categories (just like with task management), it’ll be much easier.

Easily manage your team with Project Central

Use Azure Active Directory to build your team and add guest users to your project. 

Microsoft 365 Pillar Page Image 2

The Benefits of Resource Planning in Project Management

Depending on your company, you may not have used formal processes for resource allocation.

You may have just received estimates, or given them out, if the stakeholders were up for re-negotiation should you need a bigger budget.

However, using resource planning is great if you want to determine the costs and the resources you need up front.

Resource planning

Not only is it good for making sure you avoid going over budget, but it also helps you avoid scope creep (the project getting bigger than expected).

It also helps you schedule your time more efficiently, and make sure that all the team members you need are available when you need them.

Finally, resource planning can alert you to risks you haven’t noticed. And when you can see the issues that might occur, it’s much easier to nip them in the bud.


How to Plan Resources for a Project

Before you dive in headfirst into the exciting world of project resource planning, you have to…

1. Create a work breakdown structure (WBS)

A WBS will help you break down the project into multiple activities that will make all the necessary resources much clearer to you.

And it’s also going to help you with assigning and delegating tasks later on, so it’s a win-win!

Your WBS should capture all the tasks and all the subsequent deliverables.

Focus on the outcomes, rather than trying to jot down every little detail of a task.

Keep them general (but adhering to the SMART methodology), and keep the deliverables in mind.

Work Breakdown Structure Diagram

An example of a work breakdown structure for building a bike

As a rule of thumb:

  • No single activity or group or activities should be longer than 80 hours
  • No activity at the lowest level of detail in the WBS should be longer than a reporting period
  • Apply common sense when defining time for resource planning.


And when it comes to defining work activities in the WBS, you can apply the following principles:

  • Every activity should be realistically and confidently estimated
  • Breaking down the activity further doesn’t make sense
  • It can be completed within the timeframe of shorter than 80hours/a reporting period
  • It produces a measurable deliverable.


Let’s say you and your team have to produce an app.

You need to create a log-in page and a central dashboard.

The log-in page would consist of two activities: a front-end designer creating the user interface, and the back-end designer writing the magical code.

The same goes for creating the central dashboard.

It wouldn’t make sense to break down the activity of creating the user interface for the log-in page further.

Your resources stay the same: you need the same tools and the same designer.

Track workloads with Project Central

See who is assigned to projects and who is contributing to the work!

Microsoft 365 Pillar Page Image 2

2. Use the critical path method for resource allocation in project management

Once you’ve created a work breakdown structure, you can use the critical path method to further define the resources.

This method calculates the longest path to completion, keeping all the necessary activities in mind.

The critical path method typically consists of:

  • A list of all activities you need to perform to complete the project (you’ll get this from your WBS)
  • The time it’ll take to complete each activity
  • The dependencies between the activities
  • Logical end points (milestones, deliverables).

Critical path method

In this example, you can see how dependencies affect the activities.

It’s impossible to run a pre-test if test cases haven’t been created.

You should carefully plan the dependencies to give you enough leeway and show you the risks that could affect the project.

Once you can see them, you can use project tracking to pay special attention to dependent activities to make sure everything’s on schedule.


3. Gather the data

Ideally, you’ll have historical data that you can use to form WBS and critical path estimates.

For example, you may know how long your team members need to finish an activity of the type that’s appearing in this project.

Your UI designer may need 5 hours for wireframes, your marketer needs 10 hours to launch a successful marketing campaign on Twitter, and so on.

However, you should consult them when resource planning for a project to make sure your estimates are correct.

If you’re using performance-tracking software or a project or task management solution that offers it, you can also get your data from the tool rather than having to involve the whole team into the process of allocating resources.


4. Double-check everything

If your team members are also working on other projects, you should make sure that all the right people are available to work on this project.


5. Evaluate the profitability

Finally, it’s time to add everything up and make sure you’re within the budget.

The official formula for project profitability that you can use is:

Profitability = Budget – (hours x your hourly rate)

And there you have it!


Using Resource Planning at Your Company

Congratulations – you’ve successfully planned out all the resources you’ll need for this project!

However, resource planning isn’t just one person’s job.

If you’ve never created a resource plan before, getting the data you need to form resource estimates may not be easy.

That’s why it’s good to start in advance by bringing your team on board with the process, and using the tools that will help you track resource consumption.

These tools can show you things such as:

  • Team member performance
  • Historical project performance
  • Over budget & deadline extension rates.


And so much more!

They can give you clear and accurate insight into the state of resources you’ve had to use for your projects in the past, as well as any issues that might have occurred.

Finally, if your team understands all the benefits of resource planning (and what you’re doing to track performance), it’ll be much easier to get them on board.

And when you’ve got your team to help you, resource planning is a piece of cake!

Get Started With Project Central

Sign-up for your free 14-day trial and see how Project Central can help your teams to plan, manage, and collaborate with Microsoft 365.

Share This