If you want to create well-thought and efficient long-term strategies for your company and software development, you should look closer to capacity planning. The success of any organization's workflow hinges on a careful balance of supply and demand. Smart project management requires an analysis of available resources, budget, and demand for the product.
Ignoring the need for capacity planning in the development department can lead to ad-hoc tasks piling up, conflicting priorities, overworked and inefficient employees, bugs, and loss of money due to the inability to continue working on the project. On the other hand, companies may also employ too many experts and then spend most of their budget on resources that provide less value than intended.
Continue reading to avoid mistakes while managing projects and the workforce in the development department.
Workforce capacity planning can be a challenge for businesses of any size because it’s a complex process. It requires determining and planning your workforce in order to ensure the right mix and numbers of staff that represent the right skills and experience, that allows meeting product or software development demand now and in the future.
Capacity planning is a standard procedure in large organizations and covers not only estimating labor resources but also other such as the storage, computer hardware, software, and connection infrastructure resources required in the future. Smaller companies should implement at least simplified production capacity planning procedures to be able to meet the demand.
Capacity planning in large organizations usually happens after the yearly planning for projects/demands is done. That way the Resource Managers are aware of how many resources (and what skills) they need to deliver all planned activities. Resource capacity refers to the availability of resources across time and it is usually set as an hourly amount for a daily period (e.g. 8h) or expressed in FTEs.
As you develop your forecast, make sure you are projecting hiring needs based on current trends, data, and planned initiatives. When calculating capacity, you should also take into account things like holiday calendars, annual leaves, hire/retirement dates because it affects the workflow and the availability of your developers.
It happens often that companies forecast with a presumed FTE objective in mind and match this demand with the goal, disregarding the project development variables and realistic possibilities. Then it turns out they need to quickly use additional resources to solve an understaffed situation. Your project pipeline should be monitored regularly, so you can in advance predict when it can be necessary to scale up your team and have time to approach it carefully.
Consider taking the following steps to determine needed resources:
Organizations should be aware of what is the demand for skills across time. After listing the required skills for the project, you need to assess the available skills in the team. It is critical to track and keep up-to-date information about the competency and workforce so you can make the most appropriate task assignments. This can be achieved through implementing systems that enable tracking and management of skills across the organization.
Skill-based management allows an organization to assign people to multiple tasks across many teams. This also means you can be more agile - inviting specialists to complete only specific parts of the process and mixing resources from both inside and outside your organization. And that’s good news, as a recent study found that being a part of multiple teams can positively influence an employee’s overall job performance by increasing the size of his or her information‐sharing network. (source: The future of work report 2020).
One of the ways of collecting more insights on available skills is conducting Skills Matrix. It helps to understand whether the skills required for the project are present in your team and identify any gaps that can be crucial for the company’s performance. If only a few developers possess the skills at the core of a project's work, they will bear the burden of doing a chunk of the work, which may negatively affect the final outcome.
Also, remember that developers can have many skills that can be used in multiple projects but it doesn’t mean that they can replace cooperation with specialists who have a narrow specialization. For example, Analysts and Solution Architects are responsible for gathering business and technical requirements and determining how the system will be designed and built. Developers start their work during the development phase and are responsible mainly for building or improving software or digital products.
According to Mercer’s Global Talent Trends Study, 39% of companies are going to use more variable talent pools and 77% of executives see contingent workers as playing a far greater role in the provision of missing skills. Capacity planning strategies help respond to market fluctuations and changing levels of demand. Below we gather 4 methods that are used by organizations to approach capacity challenges.
1. Lead strategy
Companies that follow lead strategy invest in more capacity that is needed, assuming that in a short time there will be so much work that all specialists will be necessary to satisfy the market demand. Lead strategy is quite risky because it is based on unconfirmed workload predictions. It often applies to companies that experience a suddenly growing demand for their product or service and they cannot yet determine whether it’s a constant growth or a temporary trend.
2. Lag strategy
Lag strategy is based on reducing the risk of financial losses as a result of hiring too many employees. Companies that follow the lag strategy wait until the current capacity is stretched to its limits before adding more resources. It can be perceived as a safer approach, however, it has disadvantages. Organizations risk overworking their team and late project deliveries which can lead to customer dissatisfaction and lower sales.
3. Match strategy
The match strategy means that companies aren't hiring talent without the need for them. However, they are aware of their current capabilities and monitor the potential capacity needs in the future. Decisions are made based on the fluctuating conditions in the marketplace. It is a good approach as long as companies have resources on the go that can join them as soon as such a need emerges.
4. Dynamic strategy
The dynamic strategy requires access to the organization’s data. Companies analyze actual demand and sales forecast figures but also past data to understand capacity fluctuations throughout the year, and based on that add more resources in advance. This strategy allows them to plan their capacity targets and avoid a shortage of capacity. However, “the must” in this strategy is having a system that tracks changes and good resource management skills.
Proper management of any business requires forecasting capacity vs. demand from multiple dimensions, i.e., by location, department, team, role, skills, etc. It allows a company to identify short or long-term shortages of resources ahead of time. But what can a company do when the decision to increase employee resources hasn’t been made on time and the project delivery date is urgent?
1. Screen your company for talent
One of the ways of finding additional talent is by looking internally. You can determine what is the actual capacity in your organization per different skill or at least area of expertise and assign these employees to the project whose development is the most important at a given moment. Another possibility is upskilling, however, this solution will only work in the long run - when you know that there will be a demand for specific skills in a given project.
2. Outsource the whole project
If it turns out that you don’t have specialists in your company who could support the development of the project, one of the possibilities is outsourcing it to an external company. It allows you to quickly build needed software or product, however, outsourcing a project means losing control over its development. Delegating work on a project doesn’t also guarantee that despite the money invested, outcomes will meet your expectations.
3. Cooperate with a recruitment agency
The main advantage of using the services of a recruitment agency is that it usually shortens the time of finding a software developer. However, there are some disadvantages as well. In general, recruitment agencies’ fees are around 20-30% of the employee’s annual salary, so it may be a burden on the project development budget. Also, recruitment agencies can deliver candidates who represent needed skills, but they might not be a good fit for the team.
4. Staff augmentation service
By using staff augmentation service and collaborating with outsourced IT experts, you cut out the time spent seeking the right full-time hire. Staff augmentation service also means having control over both the project and the budget because you can estimate how long you will need specific experts and how much they will cost you. You can add only one developer to your team with a specific skill set or build a dedicated team that you can fully manage.
Capacity planning helps organizations take care of employee’s productivity, maintain production cycles, identify skill gaps and ensure adequate resource availability to deliver projects on time and budget. No matter how big your company is, you should plan how many employees and when they will be needed. It also matters for the decision-making process – people with different roles are able to view the specific information at the right time.
Our company, Blue House, has already built dedicated teams and provided specialists with specific skills and business experience for leading brands. If you need to support your team in product or software development, you can count on our IT experts who deliver high-quality results.
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