Capacity Planning is generally understood and utilized only by very high level project managers. It makes project budgets and schedules MUCH more realistic by adjusting estimates by the percentage of non worked and non productive time.
Most of the project managers who actually build a budget and a schedule through the use of defining and estimating milestones, work packages and activities then rolling up all necessary labor hours to a total and divide by 40 to determine “team member weeks” then spread that over a Gantt chart and build their budget.
The result? They are ALWAYS over budget and late in delivery!
1. Adjust for Non Worked Time – example
- Assuming team members take 10 days vacation and sick leave per year (please verify these with the organization), and 10 holidays per year, that results in 20 days per team members that you may be paying for that does not result in accomplishing work.
- Since most people work 5 day work weeks, there are 260 work days per year per team member.
- This means an impact of 13% (260/20).
- The 13% needs to be added to the budget and the schedule to adjust for non worked time.
- Two legally required fifteen minute breaks per 8 hour day means only 7.5 hours per day are available for working. This is a 6.25% adjustment (.5 hours/8).
- The 6.25% needs to be added to the budget and the schedule to adjust for this non worked time.
- Further adjustments must be made to reflect mandatory training, etc.
So, twenty percent is normally a meaningful and accurate adjustment to total hours required by the project. Team members will be PAID for this time even if NOTHING is produced.
2. Adjust for Non Productive Time
- According to a Price Coopers Waterhouse study published in the Wall Street Journal in 2009, average employees are only productively working 60% of the time. This includes restroom breaks, phone calls, talking to coworkers, checking email, IM, etc.
- This means an average of 40% needs to be added to hours required to be included in the budget and schedule.
The issue, again, is that you pay for this 40% even though it does not result in project completion activities.
Combined, capacity planning adjustments have an average 60% hit on productivity. That means project managers who plan projects according to PMBOK and not adjusting by capacity Planning will need to more than double their estimates to be in the ball park.
Properly Planned Projects must adjust for Capacity Planning to be successful.