Resource Projection Best Practice 1 – Standardized Assumptions
Understanding the resource cost of activities is key to creating confidence that assigned work can be completed successfully and on time. Regardless of whether activities are frequently recurring and therefore well understood or one time efforts to produce a unique product or service, the use of standardized resource assumptions greatly helps the organization anticipate the quantity and type of resources needed to perform its approved work.[wcm_restrict plans=”25541, 25542, 25653″]
Standardized resource assumptions offer several benefits to the strategic planning and tactical business execution of an organization’s ongoing activities and one time initiatives. Applying standardized estimates to a given activity:
- establishes performance standards for both managers and individual contributors
- eliminates the need for constant renegotiation of resources for major ongoing activities
- increases the efficiency the long-range resource projection, monthly/weekly capacity planning, and near-term scheduling
- enables comparison to competitor organizations as a way of benchmarking performance and identifying improvement opportunities
Standardized resource assumptions should be periodically challenged and updated to account for changes in the processes, workforce, and equipment used to perform work. This typically involves assessing resource consumption information gathered while performing the activity. Optimally, data gathered during the performance of several like activities is analyzed in aggregate to ensure estimate updates reflect efficient work performance and not a single, inefficient effort.
Deviations to standardized assumptions should not be taken lightly. In cases where deviations need to be made (and there will be occasions where deviations need to be made), they should, at a minimum, be approved by the activity owner. Establishing such an approval mechanism maintains the credibility and reinforces the use of the standardized resource estimates while at the same time providing flexibility to accommodate the localized differences that occur within all businesses.[/wcm_restrict][wcm_nonmember plans=”25541, 25541, 25653″]
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Additional Resources
StrategyDriven Contributors recommend the following resource that elaborates and compliments the Standardized Assumptions best practice:
A Guide to the Project Management Body of Knowledge, Third Edition
by the Project Management Institute
About the Author
Nathan Ives is a StrategyDriven Principal and Host of the StrategyDriven Podcast. For over twenty years, he has served as trusted advisor to executives and managers at dozens of Fortune 500 and smaller companies in the areas of management effectiveness, organizational development, and process improvement. To read Nathan’s complete biography, click here.
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