How to take control of your capacity planning – for better margins, less delivery risk, and lower chance of team burnout
When 90% of your cost base is your people, bad planning destroys margins. In IT firms, most margin loss comes from staffing decisions, not engineering quality.
In 2026, IT teams can no longer survive on guesswork, gut feelings, or Google Sheets.
Effective IT capacity planning is the process of accurately matching resource supply to future demand – mitigating delivery risk, informing confident staffing decisions, and protecting your people and profits.
This guide explains how high-performing IT and software firms confidently plan capacity – with expert insights from leading capacity planning practitioners.
IT capacity planning is the discipline of determining whether your people can realistically deliver the work you’re committing to. And – if not – working out the most appropriate strategy to overcome resource constraints before you commit to the work.
It doesn’t just consider headcount. It accurately assesses client work, internal projects, resource availability, skills supply, time off, and more – giving you the data you need for profitable business decisions.
For example, sales has a potential lead for a six-month cloud migration project starting in eight weeks.
Capacity planning helps you answer these critical questions:
With this information, you’re able to determine:
In a nutshell, IT capacity planning lets you make confident project decisions, so you can seize profitable opportunities without burning out your team.
IT firms compete on reliable delivery, technical skills, and cost. To do this, you need to deliver software to clients’ schedule, quality, and budget expectations – without eroding your own profit margins.
And since 90% of your cost base is staff, how you plan and manage resources is critical.
Resource capacity planning ensures you have – or can get – the right people and skills, at the right cost, at the right time for future projects. This paves the way for profitable projects and satisfied clients.
The less predictable your projects and pipeline, the more you need capacity planning.
When IT capacity planning fails, there are operational and strategic impacts.
At the delivery level, projects that looked problem-free on paper can incur costly issues – from resource constraints creating bottlenecks, to skills shortages that spiral costs. And at a strategic level, growth, revenue, and reputational goals can falter.
The impact of poor IT capacity planning includes:
Capacity planning ensures IT firms spot these issues and strategize before they derail projects and profits. It eliminates the guesswork in IT projects and helps improve IT project success rates.
Strategic capacity planning fixes the all-too-common disconnect between senior management, sales, and delivery teams – so that everyone aligns around what’s important, possible, and profitable for the business.
Capacity planning is about turning long-term projections and pipeline into confident, concrete plans – from strategic workforce planning to day-to-day staffing.
This guide to creating an IT capacity planning process moves from strategic to operational to tactical, so you can confidently plan for both long-term and more immediate capacity needs.
The first step is to understand different types of capacity planning, why they’re important, and who owns them.
Most organizations have three horizons, from the birds’ eye strategic view to the day-to-day detail.
Before you start actual capacity planning, you need to think about how you’ll ensure supply and demand are matched.
It sounds simple – you’ll just hire or fire depending on what’s coming up, right?
Not quite! Here are some things you’ll need to think about in your capacity planning model.
Choosing the right capacity planning model helps you balance speed, cost, and risk.
Read our guide to capacity modelling for the full pros, cons, and how-to for each.
Targets and triggers ensure decisions are proactive and data-based, rather than reactive or ad hoc.
Capacity planning only works if it mirrors the way work is delivered. It’s no good planning in a six-week cycle if your Agile methodology uses fortnightly sprints.
So, it's important to work with whoever is responsible for project planning to understand their cadence – Agile sprints, Shape Up cycles, Kanban flow, etc. Then align your capacity planning horizons to their delivery rhythm.
Now that you have your capacity model planned and mapped to your methodology, it’s time to understand what capacity you currently have.
Remember, capacity planning is about skills, not job roles. Start by looking at:
This provides a snapshot of the capacity you have available now. From here, you’ll be able to compare capacity to forthcoming demand and strategic growth goals, to see how well it matches.
The next step is to understand what future capacity you will need. This will be based on all forthcoming work – whether that’s client projects or internal initiatives.
At this point, it isn’t about 100% accuracy. It’s about seeing the direction of the demand – broadly what skills and effort will be needed.
When your capacity planning processes are mature, this information should flow naturally through interlock meetings. These bring together key stakeholders to align on capacity, such as sales, delivery, finance, and resource managers.
They’re an opportunity to discuss the resource implications of current and proposed projects, resulting in an interlock report that determines capacity and viability.
This is where you start getting more specific.
If you’re fortunate enough to be using resource management software or a capacity planning tool, this will be much easier than if you’re using spreadsheets, as the platform should have tools for creating tentative project plans and mapping the impact on capacity over time.
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Looking at the capacity visualizations from your resource management platform – or based on reports from your spreadsheets – you can determine the best ways to overcome capacity discrepancies.
For example:
This step turns data into decisions and proactively reduces resourcing risk by ensuring you know exactly what steps you need to take – and potential costs you’ll incur – before you onboard new projects.
As projects are agreed, convert your tentative ‘placeholder’ plans into actual resource schedules.
IT firms need to resource projects based on people’s skills, not their job title. So, if you don’t already have one, consider creating a central skills inventory.
This will allow everyone to see which resources have the required skills and capacity for upcoming work.
Simply go into your resource management platform and replace each placeholder with a relevant named resource, chosen from your centralized resource inventory.
This will allocate work to your resources, automatically updating their availability and allocations, as well as real-time capacity and utilization data.
As projects progress, managers should monitor utilization and progress, so that they can quickly address any deviation from the project or resource schedule – for example, burn rate, missed milestones, or emerging overutilization.
This data should also be used to improve future forecasting accuracy. Metrics that compare ‘actual-vs-forecast’ budget and schedule can help identify where estimates are going wrong.
Greater forecasting accuracy improves both capacity forecasting and future delivery – so it’s worth doing.
Now you know how to start strong in capacity planning, how can you elevate it to the next level?
Here are some tips gleaned from our resource management webinars, where we interview leading professional services experts on the role of resource and capacity planning.
Two leading capacity planning practitioners – Jenna Lemmon, Senior Manager of Operations, Advisory Services at EisnerAmper, and David Binnings, Senior Director of GTM Services Strategy and Operations at DocuSign – recommended that you...
IT capacity planning isn’t a one-off activity. Your people, projects, and pipeline are constantly changing – and your capacity plan needs to reflect this.
"Don't think capacity planning is a one-and-done exercise," says David Binnings RMCP, Senior Director of GTM Services Strategy and Operations at DocuSign, discussing capacity modelling in our webinar Starting Strong in Capacity Planning:
You can’t build a capacity model and say 'Great, we need X amount of headcount with these skills' and we're done. Inputs will continuously change. The business will change. The forecast will change. Capacity will change. So you have to be able to continually evolve that and pull data from what you've seen happen."
It’s essential to monitor how accurate your capacity forecasts have been, so you can continuously improve them.
‘When you're starting out," says David Binnings, "You're going to have some accuracy but there's going to be some things to improve. So going back and tracking that accuracy is very important. Look at how accurate your capacity model has been over the last quarter, two quarters, year – and then make those adjustments."
But don’t let fear of imperfect forecasting put you off. It isn’t an exact science – and longer-term forecasting is especially prone to error margins.
The further ahead you’re planning, the harder it is. So don’t worry if your workforce capacity planning accuracy is a little off for longer-term forecasts," says David. "Within a quarter, I like to try to stay within plus or minus 2%. Within a year, it's nice to stay within plus or minus 5%."
And remember that some things are out of your control.
You do have fluctuations. Say you have attrition or you have a drop in sales. Things like that can cause challenges. But if you can get within 2% or 5%, you're doing very well."
When forecasting, remember that it isn’t just about the people, it’s about financial planning too. By attaching placeholders and people costs, you can generate a revenue forecast to share with senior leadership.
And by modelling different scenarios this way, you can decide which opportunities are most profitable to pursue.
Speaking about her organization’s decision to move its capacity planning into Runn, Jenna Lemmon says:
Forecasting was becoming increasingly important to executive leadership, so they understand how we're going to perform financially and what to expect. In Runn, it is easy enough to layer on a bill rate on top of a resource schedule and translate that into revenue. This year, we're moving towards having all of our contracted value and revenue in Runn, so we really focus on pipeline."
Plus, forecasting in Runn has the added benefit of rapid project deployment once work is confirmed.
As we are winning projects, as we have opportunities approaching close, we can begin to schedule. We've started to use the 'tentative' features in Runn to schedule projects we're confident of winning. That way, once the contract is signed, we're ready to deploy because we've already modelled the workforce plan."
If the points above seem impossible, we’ll guess you’re using spreadsheets and have outgrown them.
Spreadsheets simply aren’t able to provide live, reliable, intuitive insights into capacity. By the time you’ve analysed them and reported back, the situation has already changed.
Teams that use a dedicated resource planning tool have the real-time data and visualizations to support continuous, confident capacity planning.
We have a continual focus on business development and backfilling the capacity of the team, so it's important we know when a team is becoming available and what we are going to redeploy them on next," explains Jenna, "Years ago, staffing projects meant a lot of meetings, getting lots of people on a call, talking about availability. It used to take days of discussion and follow-up.
About a month ago, we had an opportunity come up that needed us to pull together a team of 30 people. My director and I were able to go into Runn, jump on a call, and have a shortlist of people who could be on this project within 30 minutes. That’s a game changer."
Runn's capacity planning software turns these best practices into daily reality for over 15,000 IT professionals worldwide.
With Runn, you can ditch the slow spreadsheets and reactive resource capacity management, and turn capacity management into an intuitive, ongoing, proactive process – one that supports both strategic goals and operational delivery.
…you’re struggling with one of these nine common IT capacity planning challenges. And you’re not alone – as these capacity planning insights from our 2025 State of Resource Management survey reveal.
But, with Runn, IT firms can replace Google Sheets and guesswork with data-driven strategic planning.
If you’re ready to proactively manage capacity, protect profit margins, and please more clients, find out what Runn can do for you today.
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