Capacity planning for product managers
Last updated: January 2024
Time and people. Product managers need to keep both in mind when planning what it will take to achieve your roadmap. But success is often measured against what is actually delivered, and not what is planned. That is why it is so important for roadmaps to be realistic — with the right amount of resources available at the right time to complete the work. Capacity planning can help you accomplish this.
During capacity planning, you estimate how much effort it will take to complete upcoming work and weigh that against the cross-functional team's availability. This is a critical part of transforming product plans into actual reality. Capacity planning helps you prioritize work that will add the most value to your customers and business — in a manageable way for the team.
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Aha! Roadmaps offers capacity planning for both individuals and teams.
Typically, product managers are responsible for what is called team-based capacity planning: estimating work based on the availability of specific teams within the organization. This is a high-level process that helps you determine whether product plans are realistic and attainable across UX and engineering, for example. Capacity planning takes place at the individual level as well and involves analyzing workload for each person within a team.
For the purposes of this guide, we will focus on team-based capacity planning. Using this approach, you want to achieve a balance between the available resources on the team and the timing of your product plans — so the team has a realistic workload and you can deliver what you say you will.
Capacity planning is not about perfection. Your early estimates will not be definitive — nor should they be. (Unless you can predict the future!) What is important is making the best prediction you can given the information you have and then continually confirming or adjusting as needed. That way, team members can proceed with confidence and rally around one another to deliver on time.
This guide will give you a clear sense of the benefits and challenges of capacity planning, with step-by-step instructions to get started.
Use the following links to jump ahead to a specific section:
What is capacity planning?
Capacity planning is the process of estimating work to complete and comparing it to the team's availability. You are aiming to answer questions such as:
In what time frame can we complete the proposed development work?
What must we deliver for the required features to be "minimum lovable"?
Do we need to make any scope adjustments to meet upcoming delivery dates?
Understanding everyone's availability to work on a new initiative or feature can occur at both the team and individual levels. Organizations might elect to capacity plan using one or both approaches, and the choice is typically dependent on company size and roadmap complexity. Here are some key ways to differentiate between the two.
Definition | Product development phase | Best fit for | |
Team-based capacity planning | Enables you to estimate work by team and set plans based on each team’s availability | Helpful in the early stages of product planning and thinking through large chunks of work. You might not know who will do the work, but you know which teams will tackle it. | Large enterprise organizations with many strategic workstreams. You can align your plans with the capacity of each team to effectively allocate resources. |
Individual capacity planning | Helps you analyze and track the workload for individual team members at every level of your roadmap | Happens as you get closer to implementation and plan out the releases or critical features within a given time frame | Any size organization. For smaller organizations, estimating capacity at the individual level might be all that is required to ensure a realistic roadmap. |
At both levels, estimating how much effort the work will require can be a challenge (but becomes manageable with the right tools and guidance). Teams can measure effort in people, hours, cost, or story points over weeks, months, quarters, and so on.
Use Aha! Roadmaps to visualize each team's availability in time, story points, or people — as pictured above.
Your approach to measuring effort will vary based on several factors, such as the timeline for achieving your roadmap, team structure, and product development methodology. For example, teams in a scrum environment might choose to measure effort based on story points, so they would use the same estimation unit for both planning and building new functionality. There is no right or wrong way to go about it if you are gathering inputs in a consistent way across teams. This process is key to assessing the feasibility of your roadmap, allowing you to anticipate and resolve potential conflicts before they happen.
Capacity planning is certainly complex, but do not let it shake your resolve — it is a shared responsibility. As a product manager, you will focus on creating a high-level plan for an initiative or release. A project manager or engineering manager will then dive into the precise scheduling details as the start date gets closer. Although you might not manage each initiative at a granular level, you are setting the course to accomplish them. That means ensuring product plans are achievable and realistic.
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Why is capacity planning important?
Have you ever missed a deadline? Or felt like the team's resources were not being used to their full potential? Making sure cross-functional teams do not have too much or too little work at any given time is tricky. That is why product managers engage in capacity planning — to get ahead of tough situations that can prevent success.
You want the entire team to feel confident that the product roadmap is within reach. This is possible when you strike the right balance between jobs to be done and team availability.
Done well, capacity planning boosts efficiency and helps everyone derive value from their contributions. Here are a few additional benefits to consider.
Set achievable plans: When you know the effort needed to deliver, you can better predict delivery dates and ensure fewer delays, bottlenecks, and surprises.
Anticipate resourcing problems: Based on what you discover with capacity planning, you can identify features that are at risk, realign tasks, adapt the scope of an initiative, or hire more people to support the roadmap.
Make better tradeoff decisions: Measuring work against team availability encourages more informed choices about where to invest effort and what to build next.
Most importantly, capacity planning helps you put people first. You want to ensure you have enough time to deliver against your business objectives. But understanding team capacity is what will help you create a plan that empowers everyone to do their best work.
Challenges with capacity planning
"Important" does not mean "easy." The most critical tasks on your to-do list are often the hardest to accomplish, and capacity planning is no different. Accurately estimating the effort required to complete upcoming work is a huge challenge. Even the most seasoned product managers struggle to set realistic estimations. Here are a few reasons why:
Unclear strategy or goals | It is nearly impossible to prioritize tasks and allocate resources effectively without a guiding framework. Ambiguous goals lead to uncertain project priorities. This makes it challenging to align team efforts with overarching objectives, resulting in a lack of focus and unreliable estimates. |
Team complexity | Complex projects demand careful consideration of the time, skills, risks, and dependencies involved. In large organizations, multiple teams might work simultaneously on several initiatives. All these moving parts make it more challenging to anticipate availability and calculate delivery dates. |
Uncertain external factors | External factors such as market changes or unforeseen events can make predicting and planning for future resource needs difficult. Market shifts might alter demand for a product, for instance, impacting resource allocation. And unexpected events — such as regulatory changes or economic fluctuations — can disrupt planned workflows, requiring a change in resource planning. |
Cognitive bias | A cognitive bias called the planning fallacy describes people's tendency to underestimate the time needed to complete a project or task. Despite knowing the amount of time past projects required, we tend to be overly optimistic about how things will unfold. In other words, we tend to insist current plans are realistic (despite previous outcomes) and repeat the same mistake. |
Even after thinking through these challenges, trying to plan capacity through a series of ad hoc meetings can be unruly. And documenting the outcomes within spreadsheets, presentations, or emails can be equally messy. This approach can make it tough for stakeholders to interpret and for you to communicate exactly what resources are needed.
Many teams use Aha! Roadmaps to estimate capacity accurately and communicate painlessly. You can set team-based estimates, experiment with different scenarios, visualize each cross-functional team’s workload, and share detailed capacity reports. This helps you determine whether you have enough people to deliver your big plans on time. And you can easily reallocate and reschedule work across teams directly from the report to fine-tune your approach. Let's look at how to do that in the next section.
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Getting started with capacity planning for teams
Each company and team approaches capacity planning differently. For example, if you are planning sprints, the scrum lead will determine the number of story points the development team can deliver. They will then give this information to the product manager to help set the overall capacity for a release.
But if you are planning on a high level — using initiatives, let's say — you can estimate work by team, create different scenarios based on what you want to complete, and then use this information to get feedback and allocate resources. Let's walk through an example to understand the steps involved. Even though the focus below is on team-based capacity planning, many of the steps outlined apply at the individual level as well.
1. Decide the level of detail
Figure out which level of work you want to estimate. For example, you could create only high-level estimates of an initiative as part of your roadmap planning. Then, as you get closer to delivery, you can estimate in greater detail at the release or feature level.
2. Choose an estimation unit
Common ways to estimate include people, hours, cost, or story points. You can use different timelines and estimation methods to create multiple versions of your plan — so you can pick the best scenario for your needs. Stay consistent once you select a unit to ensure accurate estimation across teams and projects.
3. Pick a time frame
Choose a period for estimates. For example, you could view capacity per half, quarter, month, or week. Be mindful to use the same time frame when comparing different planning scenarios.
4. Define your teams
How many people will be doing the work? And when are they able to do it? Collaborate with your cross-functional team leads to understand team availability within your given time frame. Pay attention to variables such as team members' scheduled vacation time, holidays, and so forth. (And remember: Do not let the planning fallacy disrupt your plans!)
5. Plan out the work
Begin to set target completion dates, estimate work, and allocate resources. Instead of doing complex calculations on your own, you can use a tool such as Aha! Roadmaps to configure a scenario and forecast how much effort will be required to complete the work (in your estimation unit of choice).
6. Compare scenarios
Confirm which plan is the best by creating alternative scenarios to understand trade-offs. For instance, you might want to see how changing dates, assigning work to another team, or reducing scope impacts the allocation of work and deadlines. Scenario planning helps you explore different ways of working — so you can understand exactly what it will take to deliver against your roadmap. (Scenario-based capacity planning does not apply at the individual level.)
Teams that do capacity planning in Aha! Roadmaps can visualize workloads and identify scheduling conflicts using a dynamic team or individual capacity report. Select timelines and estimation units to match your strategic planning process, then evaluate team feasibility. You can edit estimates and reassign work directly from the capacity report, driving confidence in your roadmap plans.
Learn the ins and outs of using Aha! Roadmaps for accurate capacity planning in this live tutorial recording:
Editor's note: Although the video below still shows core functionality within Aha! software, some of the interface might be out of date. View our knowledge base for the most updated insights into Aha! software.
You do not have to be a capacity planning expert to be a successful product manager. But the more knowledge you have, the more informed you will be about future product plans. Understanding how capacity planning works can help you make better trade-off decisions, align the team around realistic plans, and build more of what matters for customers.
