Imagine your project team as traffic on a freeway. When the traffic density (or resource utilization) is high, a minor crash has an immediate effect on traffic flow — slowing it dramatically or stopping it completely. And you don't need 100% traffic density to see this effect. Traffic jams start appearing when roads reach utilization rates of 70% or more. It’s the same with IT project resources. Overloading people usually backfires, reducing performance and increasing mistakes. Gartner research shows that teams with lower utilization can reduce the time it takes to deliver business value by 30% or more.
“ Project teams need capacity to plan, reflect and innovate”
While a shortage of resources can be due to a lack of specific skills or a true shortage of numbers, the problem is often poor use of existing resources, says Robert Handler, Distinguished VP Analyst at Gartner. “Today's IT staff tends to be overloaded with too much to do. This leaves them trying to do everything, but not especially well,” Handler says. “Project teams need capacity to plan, reflect and innovate.” According to Gartner, program and portfolio management (PPM) leaders can follow four basic steps to optimize project resource utilization.
Step 1. Determine capacity of resources available to do projects
Calculate the number of people available to do project work as full-time equivalents (FTEs), multiplied by their availability to work on projects.
Step 2. Determine hours of availability
Convert FTEs into hours and derive a true representation of availability. For example, after factoring in vacation, sick leave, training time and holidays, a person declared as 50% available for project work is actually available only 37% of a theoretical work year, or 760 hours.
Step 3. Set utilization targets
Calculate utilization targets for all project resources below 80%, and use that data to limit the number of active projects. While resources working below the target may seem inefficient, resources working above that target are likely to introduce costly delays and errors into the project.