Very frequently when teaching my Project Portfolio Management Masterclass I get asked the following question:
One of our major challenges is assessing the size of our resource pool. No matter how meticulous our calculations are, we constantly end up with way more projects than we can handle! Sometimes we are talking orders-of-magnitude errors in estimation!
So, here is an example of a “back of the envelope” calculation of total project resources bucket at a company that has proven to be extremely robust.
Imagine that there are 250 employees working at the head office. It has been estimated via survey or questionnaires that approximately 30% of their time is spent on project work and 70% on business as usual, i.e. normal daily non-project tasks. Based on that information we can assess the size of the total project resource bucket at the company:
Total number of people at the head office = 250 people
Total number of working months in a year = 10 minus two months for vacation, holidays and sick days)
Percentage of time spent on projects = 30% (estimated based on surveys)
Total Project Resource Pool = 250 people X 10 months X 0.30 = 750 person-months
Therefore the total project human resources available for the entire portfolio are 750 person-months. Using this figure and knowing that there are 12 months in a year we can calculate the approximate resource pipeline throughput at the company as follows:
Project Pipeline Capacity = Total Project Resources/Number of Months in a Year = 750 person-months/12 months = 62.5 person-months/month
In other words the total project resource requirements at the organization should not exceed 62.5 person-months in any given month.
So, here is my traditional multiple-choice question for you:
How do you measure your portfolio resource pool?
- A. We don’t measure it at all. The projects are added to the portfolio on an “ad-hoc” basis without checking our resource availability.
- B. We use some kind of back-of-the-envelope calculation similar to the one described above.
- C. We use a very sophisticated method and/or software package that takes into account resource specialties, project involvement per specific person as well as individual vacation times.