Top-Down vs. Bottom-Up Resource Planning: Which Is Better?

/Top-Down vs. Bottom-Up Resource Planning: Which Is Better?

Top-Down vs. Bottom-Up Resource Planning: Which Is Better?

In a Sopheon exclusive, Keith Duncan shares his well-seasoned perspective on the importance of resource planning as an integral part of the new product development process.

In order to optimize the return on investment from new products, an organization must excel at managing its product portfolio(s). This requires good visibility into the value, risk, expense and resource requirements of individual projects. Unless resource planning is fully integrated into new product development processes, such visibility is limited and, by extension, the effective use of resources is negatively impacted.  It’s almost like driving at night with your headlamps off; you can’t see far enough ahead to know where you might run into serious problems.

In the area of resource-planning best practices, there has been considerable debate about whether top-down or bottom-up planning is “better.” Support can be found for both approaches. However, Sopheon’s experience suggests that for organizations aiming to align limited resources with the most lucrative new product opportunities, a top-down approach provides the best balance of benefit to effort.

The top-down approach to integrated resource planning uses rough-order-of-magnitude sizing with very little detail to estimate resource needs. The bottom-up approach uses project planning techniques to create task-based estimates.

Unlike bottom-up resource planning that requires a detailed project plan and supporting project-management software, top-down resource planning can be implemented early in the project cycle using simple tools. The visibility provided by the top-down approach is more than adequate to support the level of portfolio planning required to maximize returns from the investment of R&D and other resources.

Recently, I wrote a white paper which examines the differences between top-down and bottom-up planning, including the cost/benefit trade-offs. It also shows how - by integrating long-term resource planning with a standardized new product development process - you can do a better job of project prioritization and scheduling, improve product quality and shorten time-to-market.

Author: Keith Duncan

Keith has over 20 years of experience in the software and consulting fields. He is a Lean Six Sigma Black Belt and certified as a New Product Development Professional.

2016-12-14T21:01:52-05:00February 21st, 2012|