Last week, I introduced the idea of capacity planning as a part of deciding whether to manage your program in-house. Here, I discuss executing on that plan.
Capacity planning for both the implementation and ongoing management (delivery) of your program can be executed using the same techniques, estimating framework and the same understanding of the relationships involved in managing the implementation or delivery service. The size, organization, skills set and expertise of the teams will, however, be very different.
Figure 1. Service Management Relationships for CWP Implementation and Delivery
Click image to enlarge.
The “Process Areas for Establishing and Delivering Services” box in Figure 1 above is a key area required to deliver capacity planning data based on service requirements, resource constraints, service thresholds and measurement needs. Here you will:
- Gather business and technical data.
- Analyse the data.
- Design a capacity and service delivery plan around the data and capacity models.
- Implement the service based on your work plan, service requirements and service agreements.
- Review and optimize CW program delivery.
At a generic level there are six different types of resources required to either implement or deliver a CW program:
- Leaders and owners
- Project managers
- Process experts
- Delivery experts
- Organization change experts
- Quantitative performance experts
Depending on the scale, service complexity and timelines involved, a smaller or larger team will be required. Should the CW program be outsourced to an MSP vendor then it is likely you will only need to identify your business leaders and owners and possibly assign an internal project manager to work with the outsourced MSP.
Choose an in-house implementation and delivery strategy and all these resources will be yours and yours alone to incorporate into your work plan. Two methods exist to estimate resources for both implementation and delivery:
- Top down, rule of thumb (or rough order of magnitude — ROM) technique for resource allocation;
- Bottom-up work effort estimation.
Bottom-up estimation takes longer to complete and should only be used for more complex activities or where errors in estimation could lead to the waste of scarce and expensive resources or in unacceptable levels of service for business critical service areas.
The most common way of performing a bottom-up estimation is to establish a capacity model matrix (usually in a spreadsheet or database that permits mathematical calculations).
Sample Capacity Model
| PROCESS AREA | PROCESS PERFORMED | ROLE NAME | PROCESS COMPLEXITY | LEVEL OF AUTOMATION | PROCESS FREQUENCY | CYCLE TIME | TOTAL MONTHLY HOURS |
| Back Office | Run VMS report to check % of timesheets approved | Back Office Manager | Low | High | 1 per week | 1 hour | 4.5 |
| Back Office | Execute VMS command to consolidate an invoice for each supplier | Back Office Manager | Medium | Medium | 60 suppliers so 60 times each week | 5 minutes per invoice | 22 |
| Back Office | Check each invoice for errors | Back Office Manager | High | Low | 60 suppliers so 60 times each week | 5 minutes per invoice | 22 |
| Back Office | email each supplier invoice to client, delivery manager and supplier | Back Office Manager | Low | Low | 60 suppliers so 60 emails each week | 2 minutes per email | 9 |
We can see from the above “Sample Capacity Model” that an invoice run for the CW program with 60 suppliers, one invoice per supplier, data being held in a VMS and invoices being issued manually via email would, as an estimate, require a back-office manager to be available for 57.5 hours per month equivalent to 0.3 FTE per working month.
Key to accurate bottom-up estimation is ensuring process experts are assigned to perform the modelling and the resulting capacity estimates are reviewed for accuracy and comprehensiveness by quantitative performance experts. All in-scope process areas need to be considered and work estimates tested during solution build and delivery team training to ensure anticipated work complexity, frequency and cycle so effort times are reasonable.
For top-down resource allocation, activities can be grouped without performing a detailed capacity planning analysis. Top-down is best used when full descriptions of processes activities are not known and estimates are driven by “how long it takes” rather than “how many hours of work.” Top-down is also useful when precision of work effort estimates is not as important as developing a realistic schedule.
A useful starting point is an organization chart that identifies key resources (Figure 2). Roles can also have a high-level estimate of effort and deliverable descriptions that articulate why the particular role must be performed by suitably qualified resource.
Figure 2. Suggested Operating Organization for a Contingent Workforce Program
Click image to enlarge.
Figure 3 below shows work estimates for roles typically serviced by the buyer organization for a large CWP Implementation.
Figure 3.Business Roles for a Large CWP Implementation
Click image to enlarge.
Key to successful top-down estimating is understanding resource expertise required, timelines, implementation or delivery complexity, scale of change to be introduced or service to be managed and, for international CWPs, resource availability across time zones, cultures and languages. You must also factor in lead times in resources being assigned to the CWP and if they are required to work on other business initiatives or operations at the same time.
There are clear benefits to bringing in-house the management of your CWP: you own and can decide on structures and resources discussed above. There are, however, downsides. It’s important to acknowledge you are “going it alone” and you will be unable to transfer risk to an out-sourced MSP i.e. the buck stops with you!
Good planning, especially around capacity planning and management for CWP services will help you understand the true magnitude of the task ahead of you and importantly, it will provide a basis for you to articulate resource requirements for successful implementation and delivery of your CW Program.
