Project demand management: Balancing resources and priorities
Businesses field a constant flood of requests, each vying for time and resources. Without a process for prioritizing these demands, chaos ensues: missed deadlines, overworked staff, and a backlog that never shrinks.
Demand management helps make wise trade-offs that balance immediate needs with long-term strategy. When done right, it creates a fair, predictable, and adaptable system that helps businesses achieve progress.
What is project demand management?
Project demand management is how companies decide which projects to take on and which to put on hold or reject. Demand management’s definition looks simple on paper: Collect project ideas, evaluate them, and pick the best ones. However, it requires careful consideration of various factors, from team size and group skillsets to interproject conflicts and dependencies.
Demand management workflows often include what-if analysis and scenario planning. Decision-makers simulate how potential conditions, such as sudden shifts in market demand or unexpected resource constraints, could change project priorities. Companies can adjust their project pipeline in real time by running what-if analyses rather than sticking rigidly to a forecast.
Companies that struggle to select projects are often too focused on immediate benefits and not enough on hidden costs. A project that promises huge returns may not be worthwhile if it ties up developers for months or requires expensive retraining. Demand management helps spot these hidden impacts so leadership can determine the best allocation of project resources.
Demand management often considers external data to decide the most rewarding projects. Monitoring market trend data and customer needs keeps an organization’s balanced and responsive to shifts in the external environment.
What is a demand manager?
A demand manager oversees a company’s project requests, ensuring they match business goals and resources. They help determine which projects should move forward and which need to be delayed or reconsidered. However, their job goes beyond giving projects a thumbs up.
Demand managers spend time talking to different teams to understand what they need and what they can handle. They determine when teams are stretched too thin and understand the company’s bigger picture – where it’s trying to go and what kinds of projects will help it get there.
Sometimes, demand managers have to have tough conversations. Maybe a project sounds great, but the timing is wrong. Or perhaps two important projects need attention from the same people simultaneously. The demand manager helps work through these situations, finding compromises and explaining decisions in a way that encourages alignment.
When conflicts and issues arise, a demand manager often works with project sponsors to reshape proposals. They might suggest breaking a large project into smaller phases, combining similar requests from different departments, or timing the work to match seasonal lulls in team workload.
Many demand managers incorporate an oversight framework into their process. Oversight frameworks often involve a committee that evaluates initiatives based on predefined criteria like strategic value, cost, and impact. This minimizes bias and arbitrary exceptions while encouraging a transparent process to hold decision-makers accountable.
What is an example of project demand management?
Project demand management involves evaluating and prioritizing incoming requests to ensure they align with an , strategic objectives, and customer needs. Here’s a practical example:
An IT department receives multiple requests for software implementations, each with varying benefits and resource requirements. To manage these requests, the department follows the following steps:
Collect and document requests: The team’s demand manager submits implementation proposals through a centralized system, detailing each project’s purpose, expected outcomes, and resource needs.
Evaluate feasibility: The demand manager assesses each proposal for feasibility, considering technical compatibility and alignment with current IT infrastructure.
Assess business impact: They evaluate software implementations for potential impact on business operations. Among other factors, this requires the demand manager to forecast how the software will improve efficiency and provide a return on investment (ROI), among other factors.
Prioritize projects: They prioritize projects based on the evaluations using criteria like expected business value, alignment with company goals, urgency, and resource availability.
Allocate resources: The demand manager channels resources to the highest-priority projects, ensuring the team can handle their workload without being overloaded.
Monitor and adjust: They monitor each project’s progress, make adjustments, and address any challenges.
Success in this process comes from consistency and objectivity. The IT department might be tempted to skip evaluation steps to fast-track a CEO’s pet project or fulfill a developer’s urgent request for new tools. However, skipping the process, even once, undermines the entire system.
Demand managers should routinely reflect on completed projects and review the outcomes. Looking back, they can see what worked and adjust their approach for the next project cycle, ensuring decisions are better suited to the company’s changing priorities.
Components of project demand management
Project demand management has four main parts that work together:
Demand forecasting involves predicting what kinds of projects are coming up. This means learning from past projects, talking to teams, and understanding the company’s needs in the near future.
asks demand managers to track how many people are available, what they’re good at, and what they’re already working on. With this knowledge, they can realistically assess what teams are capable of.
Resource allocation involves assigning available people and assets where they’re needed most. Sometimes, this means training or hiring people if capacity doesn’t match demand.
Performance tracking checks if projects are moving forward as planned. This information helps improve future decisions.
These processes help demand managers understand resource availability and capacity. With this knowledge, they can make informed decisions about which projects to undertake and ensure projects are possible with available resources.
Effective demand management should yield tangible benefits. Organizations can calculate the ROI of their demand management process via metrics like improved resource utilization, reduced project delays, and cost savings.
Enhancing project demand management with Tempo
Tempo’s user-friendly tools improve project demand management by recording every new project request and resource use. For example, provides capacity insights that reveal current resource limits, dashboards that display team workload at a glance, and real-time analytics to help you quickly decide which projects to pursue.
With Tempo, you can automate effort tracking and reduce manual processes. Tempo’s program is changing demand management with machine learning and advanced analytics, offering more precise forecasting and resource allocation. This AI-powered tool analyzes historical and real-time data to predict resource bottlenecks and project performance trends.
Ready to manage your projects more effectively? Tempo can provide the information and automations you need.
