Multiple project management and resource planning

As suggested in section 3.4.1, techniques of project management concerned with its tasks are less in focus of contemporary standard literature. However, particular issues of task assignments and conflicts of resource allocation are subject to some studies. Zika-Viktorsson, Sundström, and Engwall (2006) investigated that overload of work is a very common problem within projects in general, even in the construction business, which is a typical project environment with external project ownership. Another relevant observation is, that the perceived magnitude on this overload was less on just the fact, that many projects were conducted in parallel, but “lack of opportunities for recuperation”.

While there are risks of multi-project operation, it also has its benefits, aside from the fact that it is inevitable due to the nature of consulting business. For the individual, the variety of experience can increase motivation; within a single project, other projects provide a learning opportunity; and for the organizations

involved, the benefit can evolve from enrichment of the social network (Mortensen, Woolley, & O’Leary, 2007). Still, this highlights the importance of cooperation and communication in resource planning. Conflicts between the objectives of functional control (department), single project management, and the project sponsorship (client or general management) cannot be entirely avoided, but reduced, especially in environments with high uncertainty (Laslo & Goldberg, 2008).

As steps towards technical solutions, scholars have proposed simulation approaches (e.g. Laslo & Goldberg, 2008, Araúzo, Pajares, & Lopez-Paredes, 2010). However,

they require that the structure of the company is known, and roles of the processes are well-defined. In addition, studies on resource allocation behavior suggest that there are more ‘soft’ challenges to be addressed. For example, Engwall and Jerbrant (2003) show the behavior of project managers to over-allocate resources under high uncertainty, and therefore create more shortages on other projects. Reasons for these symptoms are, which we find well applicable for our study field, that resource needs change throughout the life cycles of various projects and projects seem to acquire the most qualified resources first, making them unavailable to others. Such phenomenons should be taken into consideration when analyzing resource allocation systems, since they can be inferior to highly developed techniques of near-optimal resource planning.

It is apparent that under high uncertainty, projects cannot define their resource needs statically during preliminary or initial planning, but need frequent updating. We argue for introducing flexible levels of resource allocation. Hans, Herroelen, Leus, and Wullink (2007) propose a hierarchical planning approach, as shown in figure 3-2, which divides scheduling and resource allocation into three levels: strategical, tactical, and operational. These are applied to three functional areas: technological planning, capacity planning, and material coordination. Within the capacity function for example, this leads to the functional areas of strategic resource planning, project

selection & rough-cut capacity planning, and resource-constrained project scheduling.

Strategic resource planning concerns firm-level activities, and therefore also control of available resources. On the tactical level, project selection and rough-cut capacity planning provide an outline of the resources needed, but should maintain flexibility for selection of internal resources or possibly acquisition of external capacities. Finally, resource-constrained project scheduling assigns resources and performs detailed scheduling. In combination with the other planning functions, this leads to detailed

scheduling and resource allocation.

The framework provided by Hans et al. (2007) involves functional areas likely not applicable, and the control on all levels might exceed a practical degree of complexity for IT consultancies. Nonetheless, it seems reasonable that stages of resource allocation should be introduced. Immediate assignment of the best suited experts to a project might not always be necessary, and the firm could also benefit from assigning less experienced staff members (see section 3.2.3). Therefore, these possibilities should remain open, until the actual performance of tasks requires the allocation of these resources. This could be achieved by assigning needed competences and time-boundaries, rather than specific employees.

570 E.W. Hans et al. / Omega 35 (2007) 563 – 577 Project selection, rough-cut capacity R&D, knowledge Strategic Tactical Operational Strategic resource planning planning Resource-constrained project scheduling Detailed scheduling and resource allocation

Supply chain design, warehouse design

Procurement and purchasing

Order picking, routing, and order batching Resource capacity planning Material coordination Technological planning Macro process planning Micro process planning, engineering management

Fig. 1. Hierarchical framework.

He also proposes deterministic models for the various levels.

From this brief review of hierarchical production planning-and-control frameworks we can conclude that several frameworks have been proposed for shop-floor- oriented manufacturing environments and for project- driven organisations. Only few, however, actually deal with different objectives of the planning problems at different managerial levels. Moreover, little effort has been devoted to the aspect of variability in the hierar- chical multi-project planning approach, the integration of technological planning and logistics planning, and the integration of material coordination and capacity planning.

3.3. Hierarchical planning and control for multi-project organisations

We propose a hierarchical project planning-and- control framework that is partly based on the frame- work that was proposed by De Boer [15]. We have adapted the framework to be able to discern the various planning functions with respect to material coordina- tion and technological planning. As shown in Fig. 1, we distinguish three hierarchical levels: (a) the strate- gic level; (b) the tactical level; and (c) the operational level. We distinguish three functional planning areas: (a) technological planning; (b) capacity planning; and (c) material coordination.

In this hierarchy we define four capacity-planning functions: (a) strategic resource planning; (b) RCCP; (c) the RCPSP; and (d) detailed scheduling. Contrary to De Boer, we position both the RCPSP and the detailed

scheduling and resource allocation problem at the oper- ational level. Since RCPSP and resource allocation are two different problems[29]we treat them separately. In Sections 4 and 5 we elaborate on the tactical (RCCP) and operational (RCPSP) planning level.

At each level of the hierarchy, the positioning frame- work of Table 1 can be applied. Some organisations are characterised by a high degree of variability on the operational level whilst on the tactical level the uncer- tainties are much more controllable. At the same time, the dependency of projects in some companies may be considerable on the tactical level while projects are completely independent on the operational level. These differences play an important role in modelling the in- teractions between the hierarchical planning levels; we will elaborate on this issue of interaction between the levels in Section 6.

4. Rough-cut capacity planning

In the early project stages, projects may vary signif- icantly with respect to routings, material, tool require- ments, or the work content of activities. In spite of the uncertain project characteristics, project accept/reject decisions must be made, and important milestones (such as the due date) must be set. It is common practice that companies accept as many projects as they can possi- bly acquire, although the impact of a decision on the operational performance of the production system is ex- tremely hard to estimate. Moreover, to acquire projects, companies tend to promise a delivery date that is as early as possible. This is generally done without sufficiently Figure 3-2 Hierarchical framework (Hans et al., 2007, p.570)

projects within the organization. Project initiators, which could be sales or project managers, have to be aware which competences are present and to what extent they are occupied with other activities – in simultaneous projects or other firm activities. They also should be given a possibility for communicating plans for potential projects. Decision makers on resource allocation, which in case of an IT consultancy can be competence team or department leaders, need to make the available capacity known, become aware of the resource needs, and assign staff appropriately. Furthermore, the actual allocation of resources should be subject to a negotiation process between different interests of the actors involved, in case conflicts arise.