Regulate Capacity Utilization

A portfolio can include multiple programs, and/or the projects within a single program can be a portfolio. A portfolio is just a logical grouping of projects under a common leadership structure.

Project Portfolio Management (PPM) solutions, like WorkOtter, are inputs to a decision maker’s judgment process. Any solution should ensure thoroughness and structure the information in a way that allows a decision maker to make a decision. This includes helping the decision maker know what information is firm, what information is fuzzy, how the information was processed, what information was excluded, and what the solution recommends. The decision maker then must assess all the input before factoring in his or her experience or intuition and making the actual decision.

This 7 part Guide to Portfolio Management Essentials walks a decision maker through the different factors of portfolio creating and planning.

Part 1 of 7: Regulate Capacity Utilization
Part 2 of 7: Prioritize the Portfolio
Part 3 of 7: Assess Where Your Program Has Been
Part 4 of 7: Understand Where Your Program Is Today
Part 5 of 7: Drive Where Your Program Is Going
Part 6 of 7: Business Cases
Part 7 of 7: Strategic Elements of the Portfolio

Part 1 of 7: Regulate Capacity Utilization

All successful portfolios follow two important guidelines. The first is to regulate capacity utilization.

To produce a valid strategy, you must know about your resource capability. As system utilization increases, interference in the system also increases. The increase becomes rapid as system utilization approaches 100 percent. This applies to any system. If this is not intuitive for you, consider the following examples.

  • Your computer. As your CPU utilization, computer memory, and disk drive start to exceed 90 percent of capacity, the system slows dramatically because of interference in the system.
  • A highway system. Traffic jams and slowdowns always occur when the utilization of a highway system exceeds 90 percent of capacity.

Organizations that regulate input to ensure that capacity is controlled and that system utilization rarely exceeds 90 percent actually accomplish more in a year’s time frame than organizations that don’t regulate input.
Organizations that deal with physical deliverables typically do a better job at regulating capacity utilization, because exceeding capacity often has visual physical indicators and limits that show themselves and force regulation. No good warehouse manager would stack goods in the aisles and slow movement, but in the information technology world this seems to be common practice. Regulating capacity utilization is much more difficult for IT organizations, where there are no physical limits to restrict the appetite of a management structure that is always putting one more project on the table. Exceeding the resource requirements of an organization is the root cause of many organizational deficiencies.

Once your team has decided on their plan and process, PPM software can help you execute that process. WorkOtter helps you successfully execute your program process strategy for project success. Get a demo of WorkOtter and see how we can make your program management effective.

“The Handbook of Program Management: How to Facilitate Project Success with Optimal Program Management, Second Edition” by James T. Brown is a copyrighted work of McGraw-Hill and McGraw-Hill reserves all rights in and to the Content. ©2014 by McGraw-Hill Education. Purchase the book on Amazon.

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