1. Optimizing the utilization of your skilled resources How to balance skills demand with capacity
Innate:
Resource Management Software author
20 years experience
100 active clients across IT, Professional services and, increasingly, Engineers
Seminar draws on recent experience with Petrofac & Micron
Barry Muir
Managing Director

2. The challenge
‘To continuously optimize the utilization of geographically dispersed, multi-disciplinary workforces,
…where each project has its own timeline, priority and competency requirements’
Steve Major, Petrofac
Steve is VP Eastern Operations of Petrofac.
5,000 Engineers from 3 continents assigned to 60 projects & proposals
Neatly defines the tension between 2 contrasting objectives:
Minimize numbers on the bench vs need for sufficient skills available to staff up new projects
‘Continuous’ because situation constantly changing

3. Striking the right balance
The consequences of too much or too little spare resource are equally unpalatable
Re-assess whenever a change occurs in demand or supply
Consequences
Too much means people on the bench and costs that are not being met
Too little jeopardizes appropriate staffing levels on projects, substantially increasing risks of delay.
Situation is in constant flux – Optimization requires re-assessment whenever there is a change in demand or supply.
Skills Flexibility & productivity are key goals. They create space to manoeuvre.

4. Striking the right balance
‘If fee earners could increase their billable time by 10 minutes per day, the average ACE member would generate 2.3% extra revenue.
Assuming no increase in costs/overheads are incurred, that could raise profits by 33%’
Association of Consulting Engineers
Benchmarking, 2011
This is the prize!
ACE Benchmarking - members survey that provides performance based benchmarking information.
Within Profitability section is this conclusion
For Fee earners, a 2% increase in billable hours per day for fee earners could mean a 33% increase in profits

5. Agenda The challenge What do you need to know?
What needs to be in place?
Roles
Processes
How well do you score?
Successfully bridging the gap
Information must be based on data that is:
Credible
Current
& complete
The importance of the key roles and processes

6. 1. What do you need to know? Forecast demand v capacity
Where are the bottlenecks and under utilization?
Scenarios to show the impact of project awards & change
Productivity & Utilization
How effectively are our teams working?
Track outstanding requests for resource.
Managing the resource allocation process
Resource performance on each project
Is the resource plan still realistic?

7. Forward loading 1

8. Forward loading 2

9. Forward loading 3

10. Forward loading 4

11. Scenarios

12. Move projects to minimize bottlenecks
Importance of maintaining realistic resource plans – Avoid the house of cards
Take Project snapshots
Run Comparison reports to show the impact

13. Productivity

14. Outstanding requests 1

15. Outstanding Requests 2

16. Resource performance on each project
Could require
another 40 days!
Explain
If performance to date is not improved……

17. If individual plans are unrealistic…..
The source data must be credible, current & complete
So the underlying processes and systems must be effective

18. 2. What needs to be in place?
Key Roles
Demand management
Resource allocation
Progress tracking
Roles & Processes

19. 2.1 Key Roles Line managers – Project managers Senior managers
maintaining the supply
Ensure the right skills mix is available
Project managers
Defining the demand
Senior managers
Assign priorities and resolve disputes
Line Managers:
Maintain details of skills & competencies
Hire & termination dates, impact of holidays
Identify skills shortages in good time for recruitment by HR
Provide career paths
Set aside sufficient resource for BAU & departmental projects
Ensure balanced workload for their team and that everyone reaches their utilization targets
Project Managers
Resource planning at generic skill level, using templates
Stipulate experience and competency requirements
Visibility of spare capacity so plans will be feasible
New plans generate resource requests, updated plans create change requests.
Search for appropriate staff and request individuals
Senior managers
There will be excess demand for some skills and insufficient demand for others
Prioritise each piece of new work - how far down the list can you get?
When one team gets overloaded, are there similar skills elsewhere?
Looking at the longer term trends in demand, do you have the right skills mix going forward?

20. 2.2 Demand management Change comes from: Require scenarios to:
New projects and proposals
Client delays free up resources unexpectedly
Changes in project scope, or poor estimating
Key resources leave
Require scenarios to:
Assess the impact – new bottlenecks or underutilization
Explore alternatives….whilst preserving the live data
WHAT NEEDS TO BE IN PLACE 3
Changes in demand can be unexpected and arrive from many quarters.
Scenario management, as previously shown, is the way to handle it
Response depends on priority of the new work - EXPLAIN
Explore alternatives
Scenario reports when assessing the likelihood of new projects, as shown
immediately see the resource effects of date changes – interactive Gantt Chart

21. Impact of changes Re-baseline the plan, as necessary
Importance of maintaining realistic resource plans – Avoid the house of cards
Take Project snapshots
Run Comparison reports to show the impact

22. 2.3 Resource allocation Track each assignment Many variations:
Requested
Proposed
Accepted/declined
Confirmed
Date changes
Many variations:
the dating agency approach
Where teams are role/skill based Requests can be directed to appropriate team
Otherwise, dating agency approach.

23. 2.4 Tracking effort & progress
Actual performance will affect the resource plan
So, measure the performance of resource effort
Establish performance baseline – the project budget
Track actual effort – timesheets
Assess progress – value of work done
Re-estimate to completion
Can performance to date really be improved?
Individual resource plans must be maintained and updated
As an example…….

24. Earned value Explain Without EV, you are comparing Apples with Oranges
Schedule Variance
Cost Variance
Explain
Without EV, you are comparing Apples with Oranges
SV & CV show current performance/productivity
Positive Cost Variance, Negative Schedule Variance
Schedule variance = Budget – Earned value
Cost variance = Earned Value – Actual Effort

25. Forecast to completion based on continuance of actual cost & schedule performance
Could require
another 40 days!
Here is the example that we previously looked at.
Negative Cost & Schedule Variances
Shows the degree of risk in not maintaining a plan
Avoid the house of cards

26. 3. What needs to be in place?
Roles & responsibilities of the key stakeholders.
Demand management - assessing the impact of new projects and other changes
Resource allocation process
Tracking effort & assessing progress on each project.
To summarize….
Maintaining this is primarily about Organizational culture
….. And effectiveness of system support tools

27. 4. How well do you score?
Projects often centrally registered, with financial parameters defined
Multiple spreadsheets for resource planning, often department or regionally based
Resource allocation process is often poorly defined, inconsistent procedures & communication
Roles and responsibilities can be inconsistent in large organizations
Tracking effort often done, measuring progress less so.
Here is what’s typically in place

28. 5. Bridging the gap Build on what’s in place Review business processes
Minimise cost, risk & disruption
Review business processes
Appropriate software tools
Take logical next steps, rather than a step change
Appropriate tools
Give key stakeholders the operational tools for the job – for credible, current & complete data
Configure data screens & reports
Provide navigation links that reflect the process steps

29. The potential rewards Cost savings Impact on profit levels
If the improved quality of Information gains only 2% productivity improvement ….
Annual cost savings could exceed £1,000 per resource:
Impact on profit levels
Improved performance on individual projects
1 Savings assume an average loaded salary of £50k.
I know – you all pay much more than that
2 Restate ACE Benchmarking conclusions – A 2% increase in utilization of fee earners improves profit by 33%
3 Knowing that the correct skills and experience are available will reduce risk of delay and avoid client disappointment.

30. Any Questions ?
Please visit us at Stand 54