Capacity models: a comprehensive guide

Would you like to find out how a capacity planning model can help your business?

Here’s everything you need to know to get started with capacity modeling.

A capacity planning model gives your company the ability to accurately anticipate and respond to changing customer demands without having to resort to costly last-minute changes.

It’s all about minimizing risk by providing in-depth information, helping you identify potential bottlenecks and giving you the information you need to make proactive decisions that keep projects on track.

That said, creating a fit-for-purpose capacity model requires a significant amount of data and analysis up front, as well as ongoing maintenance and governance while it’s in use.

In this guide we’ll look at the concept of the capability model, the value it brings and the steps you can take to make the most of it.

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What is a capacity planning model?

A capacity planning model is a method of representing workload versus capacity, whether you’re looking at a team, an individual role or even a skill in your resource pool.

There are three different strategies you can adopt when creating your capacity planning model:

1. Offset strategy

As the name suggests, this is a reactive model in which you increase capacity only after detecting increased demand and confirming that your existing resources are not sufficient.

2. Lead strategy

Unlike the previous strategy, this one is proactive. It involves increasing capacity in anticipation of an increase in demand (provided there is reliable data to suggest this).

3. Match strategy

Last but not least, this strategy will require you to constantly monitor workload versus capacity to spot any deviations and correct them in real time.

Why create a capacity planning model?

In short, a capacity model gives you a realistic view of your capacity, workload and future demand.

By clarifying these points, you can better understand whether and how your current resource pool can meet demand without being overloaded or under-utilized.

Visibility into available capacity is also useful for everything from recruitment to integration and from project planning to prioritization:

Optimizing the use of resources

Ensure that teams and budgets are allocated efficiently to avoid under- or over-utilization. With Teambook, visualize the utilization rate of each consultant in real time, thanks to intuitive dashboards.

Anticipate fluctuations in demand

Anticipate workload variations and adjust capacity to meet future business needs. Based on your needs, make informed decisions about skills-based recruitment or the integration of part-time subcontractors.

Reduce your operating costs

Align labor supply with actual demand to optimize your operating costs. You’ll avoid overstaffing, minimize overtime and cut downtime, all thanks to a judicious allocation of manpower.

Improve the quality of deliverables and the customer experience

Improve your performance by optimizing your resources and directing them towards projects that match their skills. By ensuring that the right resources are available at the right time to undertake projects, you improve deliverables and, ultimately, the customer experience.

Support strategic growth

With in-depth knowledge of the availability of the right workforce, you can make informed decisions, including recruitment and workforce planning, to develop your operations. This data also helps you to make informed recruitment decisions, avoiding excessive recruitment costs and talent shortages.

What’s in a capacity model?

Simply put, capacity planning lets you see and plan ahead for upcoming workloads, define tasks/projects as they come in, and avoid planning errors from the outset to keep projects on track.

Admittedly, capacity planning models can be complex to design, and even more difficult to maintain. But there are many ways to maintain agile, dynamic capacity to meet fluctuating demand.

To create an effective capacity model, be sure to include all the following elements in your model:

Projects and schedules: the type of deliverables your teams will have and when they are due. Teambook lets you create projects with distinct phases and clear deadlines, offering a chronological view of all your deliverables.

People, skills, roles: available resources and the expertise or skills they bring. Include individuals’ work schedules, shifts and leave policies. Teambook automatically integrates personal schedules and vacations, ensuring accurate planning.

Hours devoted to each project: the average number of hours needed for each project, and the number of staff hours already planned. This will also help you assess your company’s overall capacity. Teambook’s integrated timesheets make it easy to track time spent and analyze profitability.

Labor demand forecasts: an estimate of your future staffing needs based on historical trends, seasonal variations, market trends, future business objectives and workload projections.

Productivity rate: a measure of the average time required by employees to complete specific tasks, enabling you to determine their ideal capacity. Use time tracking data to determine your productivity rates.

Skills gaps: identify the skills missing in your workforce and any recruitment or training challenges. Teambook’s skills database lets you easily map available talent and identify gaps.

When you’re ready to evolve your capacity planning model, you can also include your operational objectives and scalability plans. The former help you align workforce planning with business objectives, while the latter help you prepare for future expansions by ensuring that your workforce can adapt to changing demand.

Strengthening capacity models: a checklist of best practices that must be followed

Building a capacity planning model and, more generally, creating capacity reports is never easy.

Here are five proven practices to help you stay organized and efficient:

1. Establish your basic effective capacity ✅

Before planning anything, you need to establish your basic capacity. This is called your “effective capacity”. This figure is obtained by taking the total of your team’s contractual working hours, minus vacations. It therefore represents your team’s maximum basic capacity.

2. Analyze demand ✅

What is your company’s current demand? Do you foresee an increase, decrease or stability in the number of projects you’ll be carrying out in the coming months?

3. Forecast capacity requirements ✅

Plan potential capacity adjustment needs based on the data collected in the first two steps. If demand is increasing but capacity is decreasing, it’s time to hire more or prioritize resources and projects. If you see the opposite trend, refrain from hiring new staff, as they will probably be left on standby.

4. Identify resource prioritization needs ✅

If some projects are more urgent or important than others, develop a strategy for prioritizing resources, especially if you have limits in this area.

5. Identify bottlenecks ✅

What could go wrong, if anything? What constraints could hinder future progress? Is a resource in high demand, but already full? Perhaps you have several projects to hand in at the same time, and you have doubts about your team’s ability to complete them?

Effective capacity planning gives you the tools you need to anticipate and calculate your next steps before you actually have to take them.

Key mistakes to avoid in your capacity model

Avoid using Excel to create capacity planning templates, especially if you have a large or growing team.

Creating your capacity planning model in Excel is a risky business, as you can easily get lost in all the data or be caught out by certain figures that can slip through the cracks.

The more you add to your spreadsheets, the greater the risk of errors or extrapolations based on erroneous information. Not to mention that, when calculating capacity, a single error can lead to false expectations.

In a study of Excel use, a representative from the University of Hawaii found that 88% of spreadsheets contained errors. Some were mechanical, logical or due to omissions.

As well as being error-prone, spreadsheets don’t provide accurate information on available skills and capacities. It is also impossible to track and account for employee leave.

In addition, team collaboration features are limited, as only one person can make changes at a time.

The solution? Use high-performance resource planning software like Teambook.

Case in point: How Teambook is transforming capacity planning

Unlike static spreadsheets, Teambook offers dynamic, collaborative planning that adapts to your organization’s needs:

✅ Intuitive visual planning: instantly see who’s working on what and when, thanks to our drag & drop interface. No more time wasted deciphering complex Excel spreadsheets.

✅ Automatic calendar synchronization: Your consultants’ vacations and availabilities are automatically synchronized, eliminating planning errors linked to unaccounted absences.

✅ Real-time collaboration: multiple users can modify the schedule simultaneously, and every change is instantly visible to the whole team.

✅ Skills integration: Using custom tags to illustrate skills, the right people can be automatically filtered and assigned to the right projects, taking into account their expertise and availability.

✅ Intelligent notifications: Your resources receive automatic notifications of their schedules, and color-coding allows planners to visualize cases of overload, schedule conflicts or under-utilized resources.

✅ Automated reporting: Generate capacity reports at the click of a button, with precise KPIs on resource utilization and project profitability.

As one of our users puts it: “Teambook has transformed our approach to planning. What used to take us hours in Excel is now done in minutes, and we finally have a clear view of our actual capacity.”

To sum up

Creating a capacity model helps a company to better anticipate and respond to the natural fluctuations in demand that no business can avoid.

There’s no single way to create a capacity model: there are countless different business models, and countless different ways for each company to survive throughout the year.

A capacity model is simply a tool that can be customized for any situation, provided it can accurately assess a company’s current situation and estimate its future needs based on the information provided.

For most companies, rather than embarking on the creation of complex Excel models on their own, it makes sense to get support for capacity planning with a specialized tool like Teambook, which optimizes the process while guaranteeing accuracy and collaboration.

Teambook supports you in this process with :

• An intuitive interface that requires no technical training
• Advanced planning features tailored to the needs of modern businesses
• Multilingual customer support to help you with your digital transformation
• Fair pricing per project (not per user) that adapts to your growth

Discover how Teambook can transform your capacity planning: free trial!