Resource Planning Guide: How To Optimize Your Project Planning

They say that no plan survives contact with the enemy.

While this might not be the most encouraging introduction to resource planning, it’s unfortunately true in the case of most projects. But things aren’t so bleak. If you expect your projects to go haywire and prepare accordingly, you’ll see that it’s not impossible to steer things back on track. In fact, it can be quite straightforward. But how? To answer that, we’ll need to go back to the start.

What’s project resource planning and why’s it so important? Once we’ve got the basics covered, we’ll move on to resource planning tools and how to identify the best option for your business. Keep reading to find out all about efficient resource planning, and how to best manage your business with enterprise resource planning systems

What Is Resource Planning?

Resource planning is the process of identifying your resources, estimating your capacity, and allocating them with the aim of successfully completing a project. As the word “process” implies, resource planning in project management takes place over an extended period, spanning all of the phases of a project life cycle.

Resource planning is usually undertaken by project managers, operations managers, or resource managers, but it can sometimes also fall to the CEO or general manager, depending on the size of the business.

See also: Resource Planning for Multiple Projects: Best Practices for Efficient Multi-Project Management

Alternative Terms for Resource Planning

You might’ve heard of some different terms being used to describe resource planning. Some common alternatives are enterprise resource planning (ERP), resource capacity planning, project planning, and resource management. Although there are subtle differences across these terms, broadly speaking, resource planning covers them all.

  • Enterprise resource planning: a synonymous term usually used in context with different tools or systems that are used to optimize the entire business process, as in ERP systems.
  • Resource capacity planning: a narrower term used to describe the specific process of optimizing resource capacity in relation to business needs.
  • Project planning: usually denotes the execution of resource planning within the context of a particular project.
  • Resource management: focuses on the allocation of resources after the initial identification of demand and supply has been completed.

See also: 11 Top Capacity Planning Software for Agency Project Managers

At the crux of resource planning is the optimization of company resources. But what can be considered a “resource”? The answer might vary depending on your industry and project types. Now let’s go over the resources that are most commonly utilized during the project management process.

Types of Resources in Resource Planning

Resources refer to various assets, materials, and capabilities that an organization manages as part of its project resource planning strategy. Depending on your field, your company might dispose of a couple of the following types of resources or all of them.

Human Resources

The most valuable resource a business can have are its people. This is why a company’s primary concern should be keeping up high work satisfaction rates, thus fuelling overall productivity, and ultimately generating more profit.

Statistics in recent years have shown an upward trend in employee attrition rates. Data shows that in 2022, the US record was broken with 50 million resignations, with the average annual turnover rate being over 20% (Mercer). This isn’t a phenomenon that is unique to the US, as labor statistics from European countries such as the UK and France paint a similar picture (CNBC).

How can you address this trend to make sure that your business doesn’t lose out on the valuable time spent onboarding an employee, as well as the skills and know-how they have developed? First, we need to get to the bottom of the issue. Research has shown that the most common job-related reasons for voluntary turnover are poorly-handled workloads and stress-related issues (Work Institute). Fortunately, modern resource management software has found ways to significantly improve your employee’s day-to-day obligations, and streamline the administrative part of their work lives. To effectively address these challenges, diving into advanced strategies for human resource planning can offer valuable insights and solutions.


With Productive’s robust capacity management features, you can keep a close eye on how people are doing. You can easily track their workload to ensure that nobody is being underworked or overworked. Furthermore, with robust scheduling that integrates with time off and vacation requests, you can optimize your project plans so that your team is never caught off-guard. By forecasting your utilization, you’ll gain a deep understanding of your capabilities for current and all future projects.

All of the above can dramatically increase the work-life balance for your company’s workforce. This is a big step toward increasing employee retention and optimizing your overall resource planning strategy.

Financial Resources

Financial resources refer to the funds or capital used to support company operations. Financial resources can be internal if they are generated by the business, or external in the case of loans or credits. Financial resources are tightly linked to your human resources – this is why efficient management of people is the first step toward great financial health.

Enterprise resource planning systems can help you by generating powerful insights about your business through budgeting, financial forecasting, and profitability reports.


Productive takes into account all your data in order to produce accurate financial forecasts. For example, businesses can track their billable and non-billable hours in proportion to their cost rates to get exact profitability reports for particular projects.

You can also get advanced insights into your budgeting, and any change you input into your scheduling will immediately generate an updated report that will tell you if your project will be completed under, on, or over the budget.

These real-time analytics are essential to keeping your business operations stable. You can anticipate roadblocks before they come to head and keep your clients in the loop, significantly improving your problem-solving and communications.

See also: 3 Reasons Why Forecasting Is Ridiculously Important For Your Business

Other Resources

Aside from financials, other types of non-human resources are:

  • Material resources: comprised of physical assets, supplies, and equipment. These types of resources are most relevant for businesses in the manufacturing, construction, or supply chain industries.
  • Technological resources: include the tools, technologies, and software that are used in order to support business operations, and/or a project. Ideally, companies will invest in all-in-one resource management software that can cover all complex processes and optimize business functions. More on this later in the article.

Human resources can also be further delineated into:

  • External resources: all resources can be either internal or external, depending on whether they are generated within or outside of the business. In the context of people, external resources are contracted workers or freelancers hired to help on a particular part of the project. Efficient software for resource scheduling like Productive will take into account external factors, and allow you to account for them with people placeholders in your resource management plan.
  • Time resources: simply put, your company’s time resources are the hours people spend doing business or project-related tasks. The best way to ensure efficient resource planning of employee time is implementing time tracking into your team’s day-to-day operations. Although time tracking might not be everyone’s favorite activity, it’s essential to building core business insights – so it’s best to get people used to it sooner rather than later.

The Resource Planning Process

Now that we’ve covered some of the essential terminology and concepts associated with resource planning, it’s time to cover the process itself in more detail. Resource planning typically involves several stages across which resources are identified, allocated, and managed.

While the names of these phases might differ depending on your approach, resource planning typically takes place over three different stages of the project life cycle: project planning, project execution, and project completion.

Project Planning Stage in Resource Planning

During the project planning stage, it’s necessary to accurately estimate your resource capacity to decide how to proceed with execution. In this first phase, managers usually create a resource management plan, which is a detailed reference of resource availability, their qualities (in the case of human resources, this might denote which team an employee belongs to, their cost rates, etc.), and their allocation for a specific project or business operation.

Managers might also use bottom-up estimating for a resource plan, which is the process of determining resources, expenses, and durations of the smallest unit of the project, and then building up to the all-encompassing project requirements from that data.

Traditionally, you could create a resource plan in Excel, but nowadays there are project management solutions that are much less cumbersome. Enterprise resource planning software integrates all of your business data, so that the more you use it, the more powerful your insights will be. With tools such as Productive, insights such as employee availability and profitability are right at your fingertips – manual data entry isn’t needed.


For example, you can also use Productive to set up your sales funnel and get detailed insights into which stage your potential customers are in. Use reports to forecast sales revenue and determine your demand for the future. You can also turn won leads into projects in order to eliminate unnecessary bench time due to poor communication or lack of data management. Gantt charts are another great way to set up tasks and task dependencies and keep track of your project life cycles.

After identifying the gap between demand and capacity, managers can reassess their resources, either by issuing resource requests to make up for the gap or by finding new opportunities or projects to utilize excess capacity.

Project Execution Stage in Resource Planning

Once your resources have been identified and allocated across your new project, you are ready to start working on your tasks. However, your job isn’t done yet. In fact, the real work starts now.

No matter how meticulously you’ve planned out your resource schedule and project tasks, some bumps on the road are likely to occur. These can be internal, for example, people taking sick leave, or external, such as your client readjusting the scope or end date of the project. Issues during project execution usually happen due to resource constraints. This is when project management might need to make use of resource management techniques, such as resource allocation, resource smoothing, or resource leveling.

  • Resource allocation: denotes assigning resources to tasks in order to meet demand with supply.
  • Resource leveling: consists of shifting start and end dates of project tasks in order to avoid under or overutilization. This technique might end up extending the project schedule but ensures a more balanced distribution of demand across resources to minimize burnout.
  • Resource smoothing: consists of balancing your resources with regards to the “free float” and “total float” time of a task, usually with the aim to avoid extending project schedules. Free float denotes the period of time for which a task can be delayed until dependencies are affected, while total float refers to the grace period for postponing an activity without extending the project completion dates.

Resource leveling and resource smoothing are terms that were created as part of the exhaustive resource, A Guide to the Project Management Body of Knowledge. They are also sometimes considered “crisis management” techniques, as they are usually applied once demand exceeds supply, or vice versa. Let’s create a practical example to better explain these concepts.

Example of Resource Plan Management

A design project has one designer and three developers allocated to creating and implementing UI/UX designs. The designer is scheduled to complete a task, upon which the developers will be implementing the completed design. So far, so good.

Challenge #1: One day, the designer wakes up feeling ill. They have to take sick leave for two days, creating a situation where the developers are now underutilized, as they will finish their prior tasks before the designer can complete the new design.

Solution: Instead of leaving the developers on bench time, the project manager has an idea. They know that the designer has completed a part of the design, so he decides to instruct the developers to start implementing it partially. This is called fast tracking, a method frequently used as part of resource leveling: turning previously chronologically completed tasks into concurrent ones.

Result: Because of this, the designer won’t be unduly burdened when they return from leave, and the project will experience minimal delays.

An example of resource smoothing on the same project might look like this: Quality assurance needs to test the implemented mobile designs – four days are allocated to this task.

Challenge #2: Two days into this process, their devices malfunction. It will take two days for them to be repaired. The testers can test on the malfunctioning devices, but it will take them extra time to do so.

Solution: Because the project manager knows that the developers are currently busy with another task, and will be busy for at least four more days, the manager decides to balance the resource demand by reallocating the testers to web testing until the devices are fixed.

Result: The manager has smoothed out the resource usage and ensured a more efficient workflow for the entire team. Moreover, the project schedule won’t be affected, as the testers will get a head start on an upcoming task, i.e. web testing.

See also: Website Project Management: Expert Guide to Web Builds


These are just some of the situations a project or resource manager will need to deal with during project execution. In order to be able to make these decisions in a timely manner, tools that can provide a real-time planning template and project updates are indispensable to eliminating the potential for human error. Comprehensive project management software, such as Productive, can deliver your utilization rates in a matter of minutes, filtered by team or team members, enabling efficient and effective decision-making that is crucial to smooth project progress.

See how a marketing agency scaled their business with Productive: How Degordian Optimized Business Results With Productive

Project Completion Stage in Resource Planning

You’ve successfully put out a couple of fires, and the project is merrily approaching its end date. Don’t start celebrating just yet. Now is the perfect time to check up on your key metrics to see what you did right, what you did wrong, and how you can optimize your management for future planning.

Productive uses a proprietary algorithm in order to calculate your overhead, seen as a combination of the cost of equipment, utilities, office rent space, and others, and the expense of time spent working. This is how you can get an insight into your profit margins, one of the most vital metrics an agency will want to keep an eye on.

Robust project management systems also have capabilities to provide pre-set and custom analytics with project reporting. Here are some of the insights that are indispensable for a healthy and successful business, that you can set up with Productive:

  • Invoiced Revenue by Client
  • Invoiced Revenue by Months
  • Forecasted Unprofitable Budgets
  • Profitability by Client
  • Utilization and billable metrics of production teams

Check out the different planning templates Productive offers here.

Throughout this guide, the importance of software for resource planning in project management has been continuously underlined. Let us now define this topic systematically, starting with the basics: what ERP systems are, and which types you will commonly encounter on the market.

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Resource Management Tools and Software for Resource Plans

Enterprise resource planning software, sometimes also defined as project management software, are products designed to streamline business processes with features that support the entire company life cycle. ERP software can be designed to cater to a specific type of industry, such as manufacturing or supply chain, or focus more on a specific part of your business management (i.e. financials, inventory management, supply chain, human resources management, etc.).

Additionally, some resource planning systems function as platforms that offer modules that can be combined and customized in order to fit business needs, while other products are all-in-one, comprehensive solutions that are flexible enough to support a variety of industries, but structured enough not to need extensive customization.

Resource planning tools are often distinguished across three main types, depending on their hosting infrastructure.

On-premise Resource Planning Systems

These solutions are maintained on the businesses’ own servers. The enterprise resource implementation of on-premise systems is highly flexible, offering extensive customization. However, this also means that the process will be lengthier, costlier, and require more IT expertise within your business. Furthermore, on-premise ERP systems are usually purchased through a licensing fee that can get rather steep, meaning that businesses are expected to make a large initial investment. On the other hand, the benefits of on-premise ERP systems are advanced data control and security, as all information is stored and managed internally. This makes businesses more resistant to data breaches and allows them to meet strict data compliance and regulatory requirements more easily.

Cloud-based Resource Planning Systems

Cloud-based solutions, frequently known as Software-as-a-Solution (SaaS), are hosted and managed on the vendor’s servers and are accessible through the internet. These types of systems benefit from a more flexible implementation, as well as pricing systems that can be monthly or annual, giving companies the opportunity to try out a product before they commit to it, and to offset their costs with time. Furthermore, cloud-based systems are supported by the vendor, which results in reduced IT overhead for companies. Data shows that cloud-based solutions provide 26% faster time-to-ROI, and 46% faster time-to-implementation compared to on-premise solutions (Aberdeen Group). While cloud-based solutions are the go-to for most companies, businesses that work with sensitive information or have unique business models might find on-premise or hybrid solutions to be more suitable in the long run.

Hybrid Resource Planning Systems

Hybrid resource planning solutions combine the benefits of on-premise and cloud-based solutions. In practice, this usually means that a company will use some parts of its on-premise ERP in order to satisfy specific business demands, but supplement its business process management with a more versatile, easier-to-use cloud-based option. This approach allows companies to strike a middle ground between data security, customization, and cost-effectiveness.

Features of a Good Resource Management Tool or Software

Which kind of solution for creating resource plans is best for you typically depends on your industry, company size, and specific business practices. However, that doesn’t mean that there aren’t some general tips and tricks that can help you distinguish between a good and bad solution. As enterprise resource planning implementation can be a time-consuming process in the best of circumstances, it’s important to go into it with as much knowledge as possible.

Consider the following when looking for the best project management software for your business:

  • User-friendly UX & UI: the ideal resource planning tool will be simple enough to be used by the least tech-savvy member of your team. Even if your team is comprised of project managers that are used to working with similar tools, making sure that a tool is visually pleasing and provides a good user experience is essential to encouraging daily use. To a certain extent, UX/UI can be seen as subjective, but some things to avoid are drab design that features mostly monochrome colors and text, visual clutter caused by a lack of proper organization, and performance issues such as long loading times, stuttering or lag.
  • Streamlined collaboration: a management tool should make your life easier, not harder. This is a big benefit of comprehensive tools that integrate multiple useful features in one platform, such as sales funnels, real-time documentation, budgeting and invoicing, human resource management, and project reporting. Instead of onboarding your team on multiple solutions, all-in-one tools save time on administrative tasks by serving as one source of truth for all day-to-day business planning.
  • Flexibility: although too much flexibility can end up making new users feel overwhelmed or confused, ultimately prolonging implementation times, this doesn’t mean that your ERP software should be completely rigid, either. Flexibility can be something as simple as a tool providing multiple project views so teams can approach individual task management how they most prefer, or as complicated as providing customizable reporting to support all your project data. Tools that consider both the little and the big things in order to provide a tailored experience are what you need to look out for.
  • Ongoing support: when investing in resource planning and management software, you want to be sure of two things. The first is that the product can scale with your business by constantly refining and updating its offering. Second, when you inevitably experience a problem, the solution should come in a timely and efficient manner. The dedication of the vendor to improve their product can be gauged by how active they are. Keep a look out for feature updates, or simply how active they are at engaging their customers via social media, email, or any other communication channels. This will give you a good hint into how future communication might go. Otherwise, consider checking customer reviews from trustworthy sites such as Capterra or G2, but remember to take all individual opinions with a pinch of salt.
  • Advanced insights: we have already mentioned that profit is one of the most valuable metrics an agency can track. Even if your business is small enough not to need advanced insights yet, consider investing now in a resource planning solution that can fully support your company with in-depth data once it grows. This is why you should keep an eye out for resource planning software that specifically mentions utilization and forecasting features as part of its offering.

Conclusion: Why Is Efficient Resource Planning Essential?

To recap, the business benefits of resource planning can’t be overstated, whether those that are tangible and relate to business planning, or intangible and relate to people, such as employee fulfillment.

Making sure that your projects run smoothly and that hiccups are resolved efficiently is key to increasing employee retention and ensuring business growth. And the best way to facilitate project progress is to invest in a great resource planning solution.

If you’re looking for an all-in-one tool that’s capable of supporting business resource planning for complex projects and provides powerful data to fuel future successes, consider booking a demo with Productive.


  • Agency Utilization Rate: a percentage that shows the efficiency of human resources within a company, calculated by dividing an employee’s billable hours, or resource cost, by their total hours working from a certain period of time.
  • Agency Profit Margins: one of the critical agency financial metrics. It refers to the amount of revenue that an agency retains as a profit, calculated by deducting expenses from total revenue.
  • ERP: enterprise resource planning (ERP) is the process of managing all of the main business processes of a company, usually with the help of enterprise resource planning software. It’s synonymous to the term resource planning.
  • Bottom-up Estimating: the process of creating a project plan by estimating resource requirements, expenses, and durations on the granular level of the project. These insights then form the larger picture of the project plan.
  • Fast Tracking: a project management technique that denotes moving shifting sequential tasks into concurrent tasks, usually in order to resolve issues of suboptimal utilization. Fast tracking can be risky, as it carries an increased risk of resource conflict and increases project complexity. Therefore, an in-depth understanding of task dependencies and resource availability is recommended before fast tracking tasks.
  • Free Float: the period of time within which a task can be delayed before affecting dependencies. Simply put, it’s the difference between the earliest start date of the next task and the latest finish date of the current task.
  • Total Float: the period of time is the period of time within which a task can be delayed before affecting the entire project duration.
  • Resource Leveling: a project management technique utilized in order to adjust the demand for a resource and ensure an even distribution of employee workload throughout the project timeline, sometimes at the cost of project deadlines.
  • Resource Smoothing: a project management technique utilized in order to adjust the demand for a resource and ensure a balanced distribution of resources, while also aiming to maintain overall project deadlines. Takes into regard the free and total float times of the task.

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Lucija Bakić

Content Specialist

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