Organizations need to plan how work gets done. In practice, we usually talk about two approaches: capacity planning and resource planning.
The terms are sometimes used interchangeably, but they describe different things. When we do capacity planning, we look at whether the available team capacity is enough for the expected workload. In longer-term planning, this can also influence staffing decisions, such as hiring or outsourcing (see our article on workforce planning).
Resource planning, on the other hand, focuses more on the short term. Here we assign specific people to particular tasks or projects.
In the following sections, we’ll look at both concepts and explain how they differ.
Key takeaways
- Capacity planning looks at the big picture. We compare the total work that needs to be done with the total capacity of the team.
- Resource planning focuses on people. We decide who works on which project or task and for how many hours.
- Capacity planning usually comes first, before we can assign people. We check if the team has enough capacity for the planned work.
- Both work together. Capacity planning checks if the work is doable, and resource planning assigns the people to do it.
What is Capacity Planning?
Capacity planning focuses on how much work a team can handle. It compares the available capacity of people or teams with the expected workload.
Key question: Can the team handle the upcoming work?
In this sense, we work with aggregate numbers. For example, the total number of days needed for upcoming projects are compared with the total days the team has available. This gives us a quick view of whether the planned work fits within our team’s overall capacity.
Capacity is usually measured in full-time equivalents (FTE) or person-days (PD). In theory, we could also use hours. But at this higher-level view, hours are usually not practical. FTE or person-days make it easier to estimate and compare capacity across teams and projects.
Example: Capacity Planning in an IT Consulting Team
An IT consulting company is planning several projects for the next quarter.
The company has consultants with different roles.
| Role | Consultants | Monthly capacity by consultant | Total capacity |
|---|---|---|---|
| Solution Architects | 3 | 18 PD | 54 PD |
| Cloud Engineers | 5 | 18 PD | 90 PD |
| Data Specialists | 4 | 18 PD | 72 PD |
Now the company reviews the expected workload (often referred to as demand):
| Project | Architects | Cloud Engineers | Data Specialists |
|---|---|---|---|
| ERP implementation | 20 PD | 35 PD | 25 PD |
| Cloud migration | 15 PD | 40 PD | 10 PD |
| Data integration project | 10 PD | 15 PD | 30 PD |
| Total demand per role: | 45 PD | 90 PD | 65 PD |
Capacity planning compares demand with the available capacity for each role.
In this example:
- Architects still have available capacity
- Cloud engineers are exactly fully allocated
- Data specialists are close to their capacity limit
This helps the company identify potential bottlenecks before assigning consultants to specific projects.
Capacity planning checks whether the planned work fits within this limit.
If the planned work exceeds the available capacity, the team is overloaded.
What is Resource Planning?
Resource planning focuses on who works on which project or task.
Instead of looking at total capacity across a team or role, resource planning assigns specific people to the planned work.
Continuing the previous example, the consulting company now needs to staff the projects with individual consultants.
| Consultant | Role | Project | Allocation |
|---|---|---|---|
| Maria | Solution Architect | ERP implementation | 10 PD |
| Daniel | Solution Architect | Cloud migration | 15 PD |
| Sofia | Cloud Engineer | Cloud migration | 20 PD |
| Lucas | Cloud Engineer | ERP implementation | 15 PD |
| Amir | Data Specialist | Data integration project | 20 PD |
| Nina | Data Specialist | ERP implementation | 15 PD |
Resource planning answers questions such as:
- Which consultant works on which project?
- How much time does each person spend on the project?
- Is a specific consultant overallocated?
The focus is therefore on individual assignments, not on the overall capacity of a role or team.
In practice, capacity planning often happens first to check whether enough capacity exists. Resource planning then assigns the available people to the work.
To make resource planning actionable, you need a clear view of how work is allocated. Different visualizations help answer that. We’ve outlined the most useful ones here:
Key Differences
The difference between both concepts becomes clearer when comparing them.
Capacity Planning
- Focus: Total available capacity
- Level: Teams or roles
- Main question: Do we have enough capacity?
- Typical units: FTE, person-days (PD)
Resource Planning
- Focus: Individual assignments
- Level: Specific people
- Main question: Who will do the work?
- Typical units: Hours or days per person
So basically, capacity planning looks at the overall limits of a team, role or organization.
Resource planning focuses on how work is distributed across people.
How They Work Together
In practice, capacity planning and resource planning are closely connected.
Capacity planning usually comes first.
It checks whether the available capacity is sufficient for the expected workload.
If the workload exceeds the available capacity, adjustments may be needed.
For example:
- postponing a project
- relieving team members of less critical tasks
- hiring additional staff
- using external consultants
Once the overall capacity situation is clear, resource planning assigns the work to specific people.
This ensures that projects are staffed in a realistic way.
FAQ
What is the difference between capacity planning and resource planning?
Capacity planning checks if a team has enough capacity for the planned work.
Resource planning assigns specific people to projects or tasks. In simple terms, capacity planning asks “Can we do the work?”, while resource planning asks “Who will do it?”.
What tools are used for capacity planning and resource planning?
Many teams start with spreadsheets for both capacity and resource planning. However, specialized resource management tools like Caperity provide better visibility when multiple projects and teams are involved.
Can you do resource planning without capacity planning?
For small teams, that may work. But for larger teams it often leads to problems. If teams assign work without checking overall capacity, the total workload may exceed what the team can realistically deliver. Capacity planning helps ensure that assignments stay within realistic limits.
