Go-to-Market leaders are often asked to predict the future—for example, that customer success will expand its office space, marketing will implement new software, or that two sales reps will be promoted, four will leave, and only one will return. Wouldn’t it be great to have that level of predictability?
There’s no completely reliable way to know how much office space, equipment, or sales you’ll need in a year, but there is something that can get you as close to these answers as possible: capacity planning.
What Is Capacity Planning?
Essentially, capacity planning is an exercise in supply and demand. Companies use capacity planning to determine the optimal resources to meet current and future demand.
Based on data analytics, companies can identify new growth opportunities, increase ROI, and track highly active or priority projects to ensure they stay within budget and on schedule. This is vital for keeping team morale high.
Capacity planning can be a complex process that involves analyzing and forecasting the demand for goods or services and ensuring that the necessary resources—such as manpower, machinery, infrastructure, and technology—are in place to meet that demand efficiently. Should changes occur, such as a need for staff, this insight can help companies quickly pivot to avoid costly delays and wasteful spending. In fact, 80 percent of companies that use data for functions like demand forecasting and resource analysis to quickly identify gaps can act on opportunities within hours.
“Capacity planners need to get their hands on a lot of diverse information to achieve maximum accuracy. . . . Planners use complex formulas and legacy calculations to determine a final capacity plan that is unique to their organization,” says Seth Page, COO and head of corporate development for ThroughPut Inc. “Manual spreadsheets are often used to accommodate all this complexity, but if there are errors made during the data entry process, the entire plan is affected, and knock-on effects permeate throughout.”
The automated, AI-supported capabilities of capacity planning help organizations simplify the often complex process of optimizing their resources, minimizing costs, improving efficiency, enhancing customer satisfaction, and maintaining a competitive edge in the market.
However, there are three common misconceptions about its purpose that may limit its agility.
1. It’s Solely about Scaling Up
A common misconception is that capacity planning only involves scaling up resources to meet demand.
While this is crucial, effective capacity planning also involves optimizing existing resources, identifying bottlenecks, and ensuring efficient resource allocation. Sometimes, scaling down or reallocating resources is as important as scaling up.
2. It’s Only for IT Infrastructure
While capacity planning is often associated with IT infrastructure, such as servers and network bandwidth, it applies to all business operations by providing better workforce planning, inventory management, and financial resource allocation visibility.
This is timely since 41 percent of companies recently surveyed need help with visibility to identify available resources that can influence large-sale decisions on infrastructure.
3. It’s a One-Time Activity
Some may think of capacity planning as a one-time exercise done at the beginning of a project or when setting up infrastructure. However, capacity planning is an ongoing process that requires regular monitoring, analysis, and adjustment.
“Most companies look at the data once per year,” says Brittany Davies, head of people and culture at Fullcast. “But evaluating this information continuously is a better practice.”
One study found that a lack of adequate forecasting is the biggest inhibitor to executing resource management practices effectively, with forecasting and capacity planning contributing to 88 percent of the problem for capacity management.
Demand patterns change, technology evolves, and business priorities shift, necessitating continuous capacity planning to adapt effectively. Looking ahead, changes in the coming year will likely impact companies of all sizes and industries. Understanding the proactive parameters of capacity planning is more important than ever.
By meticulously analyzing trends, forecasting demands, and aligning resources, capacity planning empowers organizations to navigate the twists and turns of tomorrow with confidence and ensure they are equipped to meet challenges with strategies that focus on productivity, opportunity, and growth.
We Can Help
Fullcast was built for RevOps leaders by RevOps leaders to bring together all of the moving pieces of our clients’ Go-to-Market strategies and automate their execution. We seamlessly connect Go-to-Market planning activities with tactical sales execution, enabling your operations, sales, finance, and customer success teams to make continuous adjustments in response to real-time strategy changes. From territory management to performance tracking, we operate with speed, agility, and AI-powered automation.
