Resource Forecasting

Why is Resource Forecasting Important?

Resource forecasting is important for several reasons.

1. It helps organizations plan for the future by ensuring they have enough resources to meet future demands. This can be especially important for businesses that have fluctuating demand, as it can be difficult to manage resources without accurate forecasting
2. Resource forecasting helps organizations optimize resource utilization. By accurately predicting future resource needs, organizations can avoid underutilization or overutilization of resources, which can lead to wasted time, money, and effort.
3. Resource forecasting is important for managing budgets. Accurate forecasting can help organizations allocate resources more effectively, ensuring that they are able to stay within budget constraints.

What Information is Needed for Accurate Resource Forecasting?

To accurately forecast resources, organizations need access to several key pieces of information. These include:

1. Historical Data

Historical data is essential for accurate forecasting, as it provides insight into past trends and demand. This data can include information on previous projects, staffing levels, and resource utilization.

2. Future Demand

Understanding future demand is crucial for accurate forecasting. Organizations should take into account any anticipated changes in demand, as well as any upcoming projects or initiatives that may require additional resources. Being able to connect your CRM software (sales pipeline) with the resource management platform can be a game changer when it comes to accurate resource demand forecasting.

3. Staffing Levels

Organizations should have a clear understanding of their current staffing levels, including the number of employees, their skills, and any current vacancies.

4. Resource Utilization

Understanding current resource utilization is important for predicting future resource needs. Organizations should have a clear understanding of how resources are currently being used, as well as any inefficiencies or areas where resources are being underutilized.

5. Budget Constraints

Finally, organizations should take into account any budget constraints when forecasting resources. This can include both financial constraints, as well as any limitations on staffing levels or other resources.

Practical Use

In real-world situations, resource forecasting is especially useful to help identify gaps between future needs and current resource capacity.

Example:
Let’s say an engineering company has a new project coming up that requires expertise in a specific area. The resource forecasting analysis shows that the company needs 5 additional engineers with expertise and specific skills to complete this project. However, when running the resource capacity report, it shows that only 2 engineers with that expertise are currently available. As the result, the company can start recruiting new employees or contractors with the required skill set to fill the gap.

By using resource forecasting in combination with current resource capacity analysis, the company can identify gaps in its workforce and take proactive measures to address them. This ensures that they have the right resources with the required skill set to complete projects on time and within budget.