Part I: The challenges and potential of people planning

		An interview with Nils Marstrand Nils Marstrand is administrative director of the Danish IT firm, Marstrand Innovation A/S. He earned his Master of Science in Operations Research from DTU and has an MBA from INSEAD. He began his career at Danish shipping giant AP Møller Mærsk. Since 1977, he has run his own firms, offering consulting services and solutions for production planning, supply chain management and project management.

Together with Jan Bonde, Nils developed the planning software, PMSIM, which he sold to Intentia in 1998 (who marketed the solution under the name Movex).  Today Intentia is owned by US- based Lawson, who sells the solution as Lawson APP (Advanced Production Planner) and Lawson MSP (Multi-site Planner). They are among the world’s most widely used and respected planning and simulation tools for complex production and supply chain planning.

Marstrand Innovation developed the technology for People Planner, and we talked to Nils about the growing trend in the professional services industries towards better resource and project planning.

What are some of the general trends you see in the professional services sector?

First of all, industrialization is coming to the services sector, with a focus on transparency, quality and productivity. You will see a transfer of experience and methods from manufacturing, such as the concepts from Lean, BPR, Six Sigma, and so on. We see a standardization of repetitive processes, the model perfected by Ford with the assembly line. This leads to investments in technology, human resources and IT solutions, including planning. These investments are best justified in big organizations, from which follows “economy of scale” strategies, with acquisitions and global thinking.

The most successful professional services organizations (PSOs) today are those which divide up projects into standard elements or components and combine the processes into work flows using Lean principles. The goal is to eliminate all waste including unnecessary transfer of responsibility securing the short leadtimes.

A good example of this is ISS, a huge Danish company that employs almost 400,000 people worldwide. (ISS provides facility services to both private and public offices, including cleaning, catering and building maintenance). When ISS makes an estimate for a new customer, they price everything separately – for example, how many bathrooms and offices there are, how many of their people will be needed to clean the company’s premises. They can give their customers a precise estimate and control projects better.
They employ a set of business processes across projects, which leads to more professionalism.  They can control projects better and meet the budgets and time estimates they give to their customers.

What are the current challenges to better project and people planning in PSOs?

Most companies still have a project by project planning culture, where people plan for their own projects, including resource allocation, in complete isolation. The most widely used planning tools currently in use are Microsoft Project, Excel, customized Excel spread sheets, and so on. These tools are generally not very good at taking a global view when you have many projects and activities competing for resources. This makes it very hard for the multi project company to prioritize the use of resources. The result is often firefighting, stress and temporarily idle resources and that decisions about change of capacity, e.g. training and hiring, are taken too late.

Another challenge is getting people to record information, such as hours spent on a project, both on time and accurately. You have to make this easy and quick for people. As processes are gradually becoming more standardized and predictable it is important to systematically compare the budget and plan with the actual recorded execution. This is valuable input for systematic improvement of productivity and profitability.

As well, when you mention “people planning” to folks, my guess is that a lot of people will balk at the idea; They will say, “You can’t plan me! I don’t want to be seen as just a production unit!” People don’t want it to seem as though they are treated as a component of a machine - they are unique with their individual skills and outlooks on life and, to some extent, unpredictable.

The challenge is to provide them with a consistent overview and clear information about assignments and performance expectations and give them the opportunity to react when demands are unrealistic. This is the way to avoid stress.

What do you see as some of the key elements a project and resource planning solution must have, so that people can use it effectively?

The solution needs to support a flexible, user-friendly dialog with the planner, where he can suggest priorities and immediately see the consequences and compare them with other options. In many ways resource planning is like laying a puzzle, achieving a balance. A people planner needs to assume in its set-up that the information entered into it will be more fluid than the precise production data you would find in a production planning tool. It needs to effectively support the interests of both the project manager and the resource manager, the typical organizational setup in project driven organizations.

Furthermore, the solution must be designed to make it easy and straight-forward for people to get to the relevant data. There should be plenty of drill-down options, but it has to be presented in a way so that you are directed to the important information. In a sense, the solution has to guide the user to where they must look for the important information – and where and how they should enter information. You might call it “project intelligence”. We plan in our future solutions to include the score card method, where the solution automatically analyzes a project and its resources and directly presents imbalances in the plan to the planner.

The tremendous number crunching, graphical representation and communication power of the PC is our big opportunity. This is the ideal tool for the planner who wants avoids the tedious work of calculation and manual placement of activities on planning boards, or maintaining data in complex spread sheets.

If you introduce a new planning tool, people are going to ask, “What’s in it for me?”How can management sell it to their people?

Essentially, resource planning is about giving all people in the firm an overview of their situation, so management can start with that point.  With project and resource planning, your firm gets a virtual neutral “blackboard”, which simply reflects the realities of the company’s situation. People can see things as they are, which in turn makes consequence calculation at the start and during a project more accurate.

Project and resource planning can provide a more balanced work schedule, and who doesn’t want that? It can help everyone handle the unexpected better. There will be more stability and calmness at work, and therefore, better decisions will be made. Ultimately, customer service and profit can improve, and that is a strong argument that I think will convince any employee.