5 Reasons Why You Shouldn’t Use Spreadsheets for Resource Planning

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It’s been more than 40 years since spreadsheets were released into the market, and since then, many organizations have started adopting Excel due to its easy accessibility, flexibility, and cost-effectiveness. As a result, managers began using spreadsheets for resource planning, basic allocation, and scheduling. 

However, as businesses expanded across geographies due to globalization and more and more organizations embraced the matrix structure, using excel sheets for resource planning has become complicated. It resulted in silos of data, numerous errors, double bookings, internal conflicts, data breaches, etc. 

Therefore, organizations need a holistic resource planning solution that optimizes the workforce to meet the changing demands.

This blog highlights the challenges of using spreadsheets while resource planning and how advanced resource management software can help mitigate them.

But before that, let’s start with the basics.

Significance of resource planning

Resource planning is a process of identifying, forecasting, and allocating various types of business resources to the projects at the right time and cost. It plays a significant role in completing the project on time and within budget without compromising quality. 

Through resource planning, managers can create a resource plan for future projects. As a result, they can reduce the bottlenecks by taking corrective actions ahead of time. This will minimize the project resource cost significantly as managers can take data-driven decisions. 

Further, an integral part of resource planning is demand forecasting. It helps identify the excess and shortage of resources by comparing resource demand against the existing capacity. 

So, when there is an excess of resources, managers can bring in future project work, adjust timelines, etc. In case of a shortage of resources, they can go for hiring or training and upskilling of existing resources. 

In addition, when a manager creates a resource plan, it helps them periodically review project performance using forecast vs. actual reports, utilization reports, etc. Monitoring employees regularly allows managers to make sure tasks are being completed on time, and if not, they can take action to address the problem. 

As a result, with effective resource planning, projects can be delivered within budget and on time, increasing customer satisfaction and brand recognition.

Now that we understood the significance, let’s know some of the drawbacks of using excel during resource planning.

Limitations of using excel for resource planning

Excel sheets are inefficient and have many drawbacks when used for resource planning.

Here’s why- 

Spreadsheets create data inconsistency

Spreadsheets cannot provide real-time data, causing data duplication and redundancy. In addition, managers may use multiple spreadsheets in silos, which can cause data inconsistency. 

Imagine two resource managers working in a matrix organization, maintaining separate spreadsheets to manage resources under their span of control. Due to siloed information, both the resource managers assign the same resource on different projects. This double booking of the resource causes internal conflicts between managers vying for the same candidate, and finally, one of them is denied the resource resulting in poor client satisfaction.

Inability to forecast and plan for pipeline projects

Timely resource forecasting is essential to create a perfect resource plan. However, excel sheets do not provide foresight into the pipeline projects. This makes it difficult for managers to initiate capacity planning ahead of time. 

As excel sheets lack forecasting capabilities, they cannot identify the bottlenecks like- excess or shortage of resources while planning for future projects. This triggers last-minute firefighting and hiring of high-cost resources. It can further compromise resource quality, adversely affecting project delivery.

Cannot provide 360- degree of resource visibility

To prepare an efficient resource plan, managers need to have 360-degree visibility of resource data in real-time on a centralized platform. However, since excel sheets are updated manually and in silos by multiple managers, it is difficult to reconcile all the information and build a resource plan that meets the demands of each project.

In addition, having multiple sheets with different data like resource skills, experience, availability, etc., make it challenging for managers to evaluate the information multi-dimensionally. This leads to double bookings of resources and creates complexity within organizations. 

Excel sheets are vulnerable to human errors

Employees manually enter and modify all data types in spreadsheets, giving room for human mistakes. As a result, even a small error in a formula, number, or layout can result in significant misinterpretations and inaccurate results and data. 

For example- As excel sheets are prone to human errors, especially during data reconciliation, so while allocating resources to different projects, managers may end up allocating an under-skilled resource to a particular project, thereby adversely impacting project quality.

Easier to create but difficult to maintain

Most organizations use spreadsheets at the beginning to meet the initial business requirements and data consolidation. However, as organizations grow, it becomes difficult to maintain spreadsheets because they lack the functionalities to handle and update a large amount of data.  

Let’s take an example- Initially, a startup had 10 employees working, so the managers were able to keep track of their skills, availability, experiences, etc., in an excel sheet. However, once the number of employees reached 300, it became increasingly difficult for the manager to handle them in multiple spreadsheets. This is why they are easy to create but hard to maintain. 

Now let’s look at the best alternative managers can use for resource planning.

How can a dedicated resource management software help?

Saviom’s resource management software offers all the advanced functionalities needed to create a perfect resource plan.

The tool provides 360-degree visibility of all the employees in the organization facilitating the efficient allocation of resources. For example, before assigning a resource to a project, the manager can check the availability, schedule, experience, skillset, etc. This ensures that the right resources with the right skills are allocated for the right task. Thereby avoiding double booking. 

Moreover, the tool also helps managers forward plan resource demand for potential projects in the pipeline. As a result, they can identify shortfalls and excesses of resources ahead of time and take effective resourcing treatments. This will reduce the last-minute firefighting of resources. 

Furthermore, the resource management software enables the managers to create numerous scenarios using simulation techniques. It helps weigh and compare different outcomes by changing various metrics such as availability, cost rate, etc. This allows them to arrive at the most viable outcome and apply it to the actual resource plan. 

Lastly, the tool provides role-based access with a combination of security rights, portals, etc., to avoid information overload.

Conclusion 

Spreadsheets have come a long way over the past few decades. However, when it comes to resource planning, using spreadsheets is not the right choice as it does not entail any advanced features. 

Hence, managers need to use the right resource management tool so that they can gain complete visibility over their resources. This will enable them to formulate an efficient resource plan and ensure successful project delivery.

I am the one who loves to read and also has a special interest in writing. I have written for many websites and shared my views with the reader. I have always received warmth and love from my audience. I hope you will love my work too.

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