Demystifying Capacity Planning – Importance, Steps, and Benefits of Capacity Planning

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What is more difficult? Starting a new company or making sure that it stays in business? Ask this question to business owners and the majority of them would agree that the latter is considerably more challenging. Statistics agree with the same too.

As per a recent report by SBA (Small Business Administration), only about 50% of the small businesses are able to survive for 5 years. Moreover, about 35% of them are able to make it through the first 10 years.

A post on suggests that three common reasons due to which most businesses generally fail are -

  1. Failure in delivering real value
  2. Failure in connecting with the target audience
  3. Failure in optimizing conversions

While there is no denying that these are some actual common reasons for business failure, another crucial reason which probably has a role to play in every business aspect is resource planning. Most new small businesses generally focus on factors such as funding, steady cash flow, and marketing and in the process, efficient resource management often goes unnoticed.

What is Resource Management?

In simple words, a resource is something that you need for completing a particular task. For a business, this can be some material, facility, equipment, or even people that work in tandem to fulfill the most important business goal of delivering high value to the customers or clients.

As compared to other resources, it is generally the employees that are considered to be the most important and most difficult to manage. This includes your full-time employees, remote employees, subcontractors, and freelancers.

So, resource management is the process of identifying resources required for delivering projects and distributing or using them judiciously in order to complete the project within the specified timeframe. From staff members, their responsibilities and roles, to equipment and materials required for the project, everything is effectively managed to successfully close the projects.

Resource Management for Large Organizations

Successful large businesses are now looking for unique ways to improve their profitability, reduce waste, and streamline costs. Considering the fact that employees themselves cost significantly to the business, lay-offs and staff redundancies are one of the most common cost-cutting measures.

But even during this challenging economic times, the success of large businesses abundantly relies on its employees. While letting go of crucial skills, expertise and experience might bring in a few short-term benefits, the future of the organization is most cases is negatively affected.

This makes it very important for organizations to improve their resource management strategy in order to boost productivity. While there are now solutions such as mobile apps to boost employee productivity, measures such as tighter resource management are proven to enhance productivity at every level of an organization.

As compared to smaller businesses, larger organizations were quick to realize this fact and several of them started laying major emphasis on resource management. Apart from productivity and prudent use of available resources, stronger management of resources is also known to offer a host of other benefits such as-

  • Improved Revenue
    With the help of effective resource management strategies, businesses are able to assess the entire pool of available resources and their utilization. This helps in making sure that valuable resources are used for delivering maximum results.

    Even the workload is efficiently managed to ensure that none of the team members is over-utilized. Ultimately, this also helps in keeping your employees happier, creating a better work culture, and this aids in improving their engagement. All of these benefits can help a business considerably improve its bottom line.

  • Resolving Resource Conflicts
    With most large businesses spread across multiple geographic locations, resource conflicts are very common. Such conflicts can result in missed opportunities to increase revenue and also impact your customer satisfaction.

    With resources scheduled as per the requirements of the project across locations, the problem of resource conflicts can be effectively eliminated or reduced considerably.

  • Improved Delivery of Projects
    By improving the delivery of projects, businesses can increase margins and reduce costs. With resource management, resources are allocated to the project on the basis of their location, skills, and availability. This helps you ensure that the allocation is exactly as per the requirements of a job.

    As a matter of fact, resource management also helps in allowing businesses to understand their skills and training shortages. By thoroughly understanding the current resource utilization, many of the larger businesses are now also able to predict future resource requirements.

  • Improved Delivery of Projects
    By improving the delivery of projects, businesses can increase margins and reduce costs. With resource management, resources are allocated to the project on the basis of their location, skills, and availability. This helps you ensure that the allocation is exactly as per the requirements of a job.

    As a matter of fact, resource management also helps in allowing businesses to understand their skills and training shortages. By thoroughly understanding the current resource utilization, many of the larger businesses are now also able to predict future resource requirements.

    This offers long-term visibility into the resource requirements of an organization and enables it to take effective business decisions.

  • Rising Popularity of Online Resource Management Software
    In this modern age of competition, businesses abundantly rely on modern technologies to gain a competitive edge. While manual resource management softwares were starting to get common among several larger businesses all over the world, many of the organizations started looking for innovative solutions for their resource management requirements.

    While businesses started realizing the importance of resource management, it didn't take long for them to also realize that the process is an on-going one and not a one-time thing that it was initially expected to be. Businesses started spending more resources on the resource management process itself, failing to achieve the benefits discussed above.

    This resulted in the development of resource management software. By eliminating the manual, time-consuming, and error-prone traditional methods, these innovative solutions made resource management easier and more effective for the organizations.

    Many of these solutions come with a host of unique features such as Schedule Updates, Easy Schedule Editing, Online Flexibility, Dashboard, Centralized Pool Resources, Resource Availability Report, Utilization Report, and more to make resource management a breeze.

    This also helped in reducing the number of people an organization used to require for the sole purpose of managing the resources. With the help of such solutions, businesses steadily started experiencing the benefits they were set to achieve with resource management.

    But while such online resource management tools are now very popular among large organizations, most of the smaller businesses are yet to understand their importance. While many of them do understand the importance of resource management, they still prefer traditional methods and believe online solutions are an unnecessary expense.

    But is this really the case? Is online resource management only for larger organizations? There are a few important things to understand before jumping to such conclusions.

Resource Management for Small Businesses

While there are several major differences between a small business and a large business, in the end, every type of business is aiming for profits. This ultimate goal of all the businesses often results in a host of similarities irrespective of the industry a business is involved in or even their size. A few such similarities are-

  1. Focus on ROI

    Be it investing money or time, it is very important for every business owner to know what the return on the investment would be. If you are investing time, you need to make sure that you are spending it on something that is valuable or helpful to your business.

    Similarly, if a business is spending money, it should also be in line with the values and vision of the company. Ultimately, the investment should help a business grow.

  2. Using Modern Technologies

    Irrespective of whether you are running a small business or one that is spread across countries, in these competitive times, it is impossible to gain an edge without using modern technologies abundantly.

    Fortunately, there are now a host of innovative solutions for businesses to help them with their day-to-day operations. Be it an online meeting or web conferencing or a smarter way to track the finances, there are several solutions for businesses. While large scale businesses spend more on such technologies and solutions, they are also getting very common in small businesses.

  3. Hiring the Right People and Using Them Well

    Nothing is more important for any business than the people who are working for it. When hiring, it is important to look beyond the qualifications and experience and focus on factors such as creativity, motivation, and overall personality.

    And for business success, hiring is just not enough. You also need to focus on how well you can use the people in order to take your business to the next level. The skills and creativity of the employees should be used effectively to help the business.

    As you can see, there are several things that are important for businesses of every size. What is more noteworthy is the fact that a lot of these shared goals or values have resource management as an important component.

    Be it the ROI, using technologies, or hiring the right employees and using them well, effective resource management solutions can play a crucial role in helping businesses achieve these objectives. While the need for online resource management solutions is higher for larger businesses, they definitely are not unnecessary expenses for small businesses.

    While the magnitude of benefits can be lower, even smaller businesses can experience a host of benefits with such online solutions. Let us have a look at some of the most important benefits that a small business can experience with online resource management.

    Why is Online Resource Management Important for Small Businesses?
  1. Helps Save Time

    Most small businesses often do not have dedicated people handling resource management. It is generally the CEO or some other senior staff member managing the resources in such businesses. Online resource management solutions leave them with more time to focus on other important business activities.

    Apart from helping them save time, the solutions also add more efficiency to the resource management process to help the overall business in multiple ways.

  2. Detailed Resource Insights

    It is not just important to schedule the resources efficiently but also to monitor them in order to improve the overall business functioning. Monitoring them or getting detailed insights into how the resources are being actually utilized is challenging with traditional methods.

    With solutions such as eResourceScheduler that come with advanced team analytics and dynamic reports feature that small businesses can add more transparency in resource utilization.

  3. Cost Savings

    Needless to say, one of the biggest benefits of online resource management solutions for businesses of every size is cost savings. They allow you to manage the entire pool of resources spread across projects and allocate them effectively in order to minimize resource utilization and use them to the best of their capabilities.

    This helps in freeing up a lot of resources which can be used for other projects. Moreover, with resource management, right people can be selected for the right job and this can also help save costs associated with changing teams and rehiring.

  4. Better Project Predictions

    The project management teams now run a host of complex data tests across business projects for visualizing the outcome of labor and costs. With resource management solutions, the team can easily test many different hypothetical scenarios while not really investing any money, time, or resources.

    Every single project can be very important for the reputation, bottom line and even team morale of a small business. With improved future prediction, businesses can make better business decisions to ensure that every project is successfully completed within the specified budget and timeframe.

  5. Replacing Spreadsheets

    Spreadsheets are still very commonly used by small businesses for resource management. However, project managers who use spreadsheets generally spend a lot of time moving the data around. This often leaves little to no time for data analysis on the basis of which informed decisions can be taken.

    Online resource management solutions eliminate this lack of resource planning which comes with Excel spreadsheets. They allow project managers to easily explore how changing elements such as adjusting resource allocation, reducing costs, and extending timelines can impact the project.

Resource Management for Every Organization

As can be seen, resource management plays a crucial role in the success of every organization irrespective of its size or industry. While the magnitude of benefits can definitely vary between the different size of businesses, there is no denying that such solutions can abundantly help small business too.

Marketing Consultant
Nikita Sharma
Nikita Sharma, an impassioned Marketing Consultant at eResource Scheduler, has been shaping the digital marketing landscape since January 2021. With a rich background in web development and digital marketing strategy, she's a beacon of innovation in the field. Nikita has achieved remarkable milestones, including reaching over 1 million social media users for the Jaipur International Film Festival and 3 million-plus SERP impressions for Enbraun Technologies. Her tenure at Nexa as a Digital Marketing Strategist in Dubai, certified by Google and Hubspot, underscores her profound expertise. Nikita's educational journey in Computer Science from Rajasthan Technical University and advanced programming courses have been pivotal in her career. She exemplifies dedication, creativity, and a deep understanding of digital trends, making significant impacts across diverse industries.

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