Capacity Planning - From the Pipeline to the Envelope
Updated: Oct 8, 2019
When developing capacity plans, project portfolio managers frequently employ the metaphor of a pipeline. We envision initiatives entering the pipeline, undergoing the standard development process, then exiting the pipeline when the deliverables are complete. If the pipeline can be expanded, project results will be delivered faster and business value will increase proportionally.
This metaphor assumes that the organization has the capacity to absorb and receive value from the change resulting from the project. This could be an invalid assumption, as the organization may not have the operational capacity to benefit from the change. Consider for example a project intended to introduce a new product. Can the sales team explain the benefits of the product to the customer? Can the operations team adequately support the product? Can accounting accurately report on results? These are questions that should be addressed via stakeholder analysis as the project is being defined. This analysis is often inadequate at the individual project level, and that inadequacy is magnified at the portfolio level.
At the portfolio level, the metaphor of an envelope can be helpful. The envelope represents a model of the capacity of the organization. What does it do well? These capabilities are inside the envelope. Work that is a stretch exists at the edges of the envelope and then of course there is work that is outside the envelope.
Project work continually changes the size and shape of the envelope and these changes must be anticipated and planned. Thus, the capacity plan must go beyond the project performing organization and consider the capacity of the entire organization.