5 Steps to optimising capacity for digital transformation

As businesses embrace digital transformation, it’s important to consider the specific impacts to IT as well as to organisations as a whole.

As more businesses embrace digital transformation, it’s important to consider the specific impacts to IT as well as to organisations as a whole. While teams have always been under pressure to deliver on business needs, digitalisation requirements have pushed these demands to an all-time high.

Now more than ever, teams need to be as agile as possible, ensuring that they are working on the right priorities in order to contribute to the bottom line. In light of their growing responsibilities, teams are feeling the pain of resource over commitment, which in turn affects their ability to deliver on innovation to meet growth and customer experience objectives. 

As a result, according to a recent study conducted by Appleseed Partners and sponsored by Planview, more than half (53 per cent) of companies are working on investments that are at risk of delayed delivery because there was not enough capacity to take them on in the first place. The good news, however, is that companies implementing capacity planning are 38 per cent better able to prioritise demand through continuous planning and are better equipped to run accurate what-if scenarios to optimise their resources. They improve project timeliness and reduce business risks that threaten innovation speed because they have the data to help the business make smart trade-offs. 

Research shows that 60 per cent of capacity-centric organisations have a Project Management Officer (PMO), whose role is evolving from being a mere schedule keeper to being a vital partner – an enabler of an accurate, comprehensive view into capacity and demand to prioritise critical work. Here are an additional five ways in which organisations are optimising capacity planning. 

1. Gain greater visibility into pipeline demand

In many organisations, over 50 per cent of projects undertaken are unplanned and have lower visibility into resource demand. This is why the first step is to understand if the available resources are working on the right projects in the first place. For companies that haven’t optimised capacity planning, it is twice as likely that 30 per cent or more of projects are not part of the regular planning and approval process.

As a result, IT leaders and executives end up with a murky view into the work impacting resources. Using the right tools can help PMOs have an accurate view into the pipeline, ensuring all projects are visible and tied to a specific strategy.

2. Understand resource capacity

It’s not uncommon for companies to commit to new projects without taking into account capacity – in other words, the people needed to do the work. In fact, only 31 per cent of the companies that don’t use capacity planning tools take capacity into account most or all of the time. Whereas organisations that endeavour to understand resource capacity planning, and regularly incorporate this into their planning, defining metrics to evaluate and prioritise projects, are more likely to deliver projects on-time- and tend to grow in their sophistication and maturity as a business.

3. Achieve a comprehensive view of both capacity and demand

Managing shared resources is a top pain for more than 60 per cent of companies, which is why the next step is to secure a complete view into both capacity and demand. Companies that use enterprise software are more likely to have a holistic, real-time view into portfolio pipeline visibility, the people available, and the necessary tools to get the job done. This means they can streamline planning and access accurate data for decision making without relying on manual workarounds like spreadsheets. 

4. Conduct continuous prioritisation and planning

Due to rapid growth or other factors, smaller businesses may not have the resources or time to effectively conduct ongoing project prioritisation and planning activities. As a result, they tend to focus on a single project, and lack context into the overall balance of their portfolio and a project’s impact on resources.

As a business develops more processes or has more resources, time, and business acumen, the opportunity and/or ability to conduct these activities with more frequency also improves. Conducting continual planning drives measurable results by ensuring greater value from the resources and money invested in the portfolio. It’s a game changer for companies, as it creates agility through prioritisation.

5. Run and analyse what-if scenarios

The pinnacle of capacity planning is the ability to run what-if scenarios on resources in real-time. As organisations become more mature, response times shorten, making decision-making much faster and accurate. Companies are then able to evaluate the ability to take on new opportunities in hours or days, rather than what used to take weeks. Instead of having to track down information, PMOs now have everything they need in one place, ready for IT and business leaders to consider trade-offs.

Embracing effective capacity planning

In a time of digital transformation, effective portfolio management is critical to the success of any strategy, and it's not hard to see how poor capacity planning in projects can have a negative impact to project timelines, costs, and agility. While many organisations may see a shift in focus to a capacity-centred approach as a daunting task, the risks of not making the change can far outweigh the time, effort, and resources invested to make this necessary adjustment.

Organisations that fail to embrace capacity planning risk time to market, increased costs and the ability to innovate fast enough. They also have the potential to miss business opportunities for growth by underutilising their more important asset: their people. On the other hand, with the right team leading the charge and the right tools for the job, capacity-centred organisations understand the economics of business innovation and digital transformation. 

They have the potential to reap the benefits of progressing from blind investments and decision fire drills to knowing precisely what resources are available, where they are applied, and how they can best be tapped to fuel growth objectives.

Carina Hatfield, Senior Product Manager, Planview

Image source: Shutterstock/ESB Professional

ABOUT THE AUTHOR

Carina Hatfield is a Product Manager at Planview and is a Certified Public Accountant (CPA). She has a breadth of experience in software applications in finance, accounting, and financial analysis, and a proven track record leading teams to identify business problems in order to develop solutions needed to implement sound portfolio management practices.