From my point of view, manage supply and demand is one of the most important processes within the portfolio management to be able to tackle the portfolio’s initiatives.
The fact is that in a portfolio, most resources do not execute one project at a time; individuals and managers are juggling multiple projects. As a consequence of this situation, delays, extra charges, and unexpected constant changes are generated, which have an impact on the project schedule, and quite frequently on our clients’ satisfaction.When several projects are concurrent, it is necessary to convey the priorities of each project and of each resource. When there is not an implementation of a process for managing the supply and demand of resources, generally the decision regarding the resource allocation, is made without a centralized view of the demand and resource availability. Without managing supply and demand, there is a lack of planning, forecasting, and optimization of the use of resources; decisions are not made based on business priorities, dependencies between projects, skills, competencies, job functions, etc. Without an adequate management of supply and demand, the resource deployment is complex and time-consuming, therefore can significantly affect the portfolio’s performance.
On the contrary, when the demand and supply of portfolio resources are managed, the following goals are achieved:
- General overview of the current planning status, including planned requests, the use of resources and open work lists in the portfolio.
- Determine the overall request status for the portfolio initiatives.
- Understand the resource utilization in the portfolio.
- Optimize resource planning, scheduling, and allocation for the purpose of increasing profitability and service performance.
- Adjustment of personnel priorities along the way and stay up to date with the changes in the portfolio’s demand.
- Maximize active employees’ productivity and reduction of downtime.
- Provide high-quality work with the most qualified people.
- Improvement of customer satisfaction and systematically comply with the agreements of the level of service for the clients (SLA’s) and organizations and (OLA’s)
When a demand and supply management process is implemented, is necessary to determine the abilities of the organization to be able to tackle the initiatives of the project portfolio. The portfolio demand is mapped to existing resources in the organization and the goal is to ensure resource capacity is optimally allocated against resource demand, to undertake projects in an ideal, prompt and successful manner.
The capacity refers to the number of resources with the adequate and necessary competencies and skills to undertake the initiatives accounted for in the portfolio’s road map. The demand refers to the resource requirement necessary to tackle the project portfolio. The purpose of managing the supply and the demand of the resources is to be able to ensure that the capacity of the organization is optimal to execute the portfolio components, based on business priorities and the potential portfolio value.
Many Project Portfolio Management tools (PPM tools) help us with the management of the allocation of the resources, ensuring the maintenance of a high level of resource utilization, helping us to increase transparency of the use of resources between departments, regions or countries. Rely on a PPM tool for the analysis of the demand and supply of the resources for the portfolio, allows us to improve the accuracy of predicting the necessary capabilities and skills within the organization.
Finally, let us focus on the value that the portfolio generates for the organization through the strategic alignment of each component. The portfolio needs an efficient performance in the management of the demand for resources and optimizes the average time to satisfy an open resource request. The final purpose of this process is to reduce the deviation of forecast requests for resources versus the actual capacity of the organization to generate value.
In your organization, how frequently are projects delayed or how frequently do these fail due to a lack of an adequate resource allocation?