Capacity planning: Definition, Types, Benefits

blog_auth Blog Author


published Published

Nov 21, 2022

views Views


readTime Read Time

16 mins

Tabel of the content

Capacity planning in scrum doesn’t get a lot of coverage, but it’s one of the most important processes of the scrum. It helps to define the team’s capacity and sets the stage for capacity planning throughout their scrum process. The goal of capacity planning is to ensure that there are enough resources available at all times to meet the demand. Once anyone has an understanding of what it takes to build great software. Anyone can better understand how to predict their team’s ability to produce features or fix bugs during their sprints. This ultimate guide shows everything about capacity planning in business.

What is capacity planning?

A team's capacity is a measure of the number of work items that it can complete within a given period, typically expressed as story points. Capacity planning is an approach to project planning that ensures that teams have the skills, space, and resources they need. With this, the manager can complete their projects effectively and efficiently. This process ensures that the team has enough capacity to complete planned stories on time and maintain a sustainable pace.  

To identify and maximise capacity, it's important to have a clear understanding of what they are trying to achieve with their sprints. In Scrum, for example, there are two main goals for sprints: deliver working code and maintain velocity. If a team wants to keep delivering the working code without sacrificing quality or velocity. Also, they need to ensure they have enough capacity available during each sprint cycle.

The purpose of capacity planning

While it might seem like a simple enough task, capacity planning is quite complex. To get the most out of their team, capacity planners need to know more than just how many people are on it. But also what they can do and what they need to do to do their job well. 

  • Helps to optimise their team's performance by assigning tasks that suit their strengths.
  • Matrix structures
  • Team members can get a better idea of what they need to do.
  • Team coordination and collaboration.
  • Preparing for unpredictable tasks
  • Handling remote workers

Capacity planning can be done either manually or automatically using a software tool such as Microsoft System Center Capacity Planner (SCACP). 

Capacity planning is a process that is used to estimate the capacity of a system, or a component of the system, over some time horizon. Capacity planning is used in many projects and organisations to provide estimates of how long it will take to deliver a product or service.

Types of capacity planning

Three types of capacity planning can be used in business for short-term and long purposes.

1. Workforce Capacity Planning: The first step is to calculate the workload that needs to be completed during the project life cycle. From this calculation, they will know the number of people required to complete all phases, from development, design, testing, release, support,t and maintenance. It also includes resource allocation strategies like hiring new resources if demand exceeds available resources.

2: Product Capacity Planning (PCP): The second type is PCP, which involves resource scheduling based on forecasts such as market requirements, demand, and supply elasticity. This planning, includes available products, machinery, tools, and other resources when making decisions about what is needed to fulfil deliverables. For example: in a pet shop, the shopkeeper needs all the important things like toys, food, belts, and carries. 

3: Tool Capacity Planning: Tool capacity planning is one of the most important parts of identifying a business’s necessary business tools. Tools include machines, CRM, vehicles, an assembly line, and others that help provide insights into every aspect of the business.

Certified Scrum

Master Course

Get Certification on 2nd Day

View course

Capacity planning strategies

If they feel overwhelmed by all the work in front of them, or maybe their team feels like they need to get more done. Also, it might be time to start thinking about how to manage their capacity more effectively. Capacity planning is a strategy that helps teams and organisations determine how much work they can take on without risking quality or slowing down. There are many different strategies for managing capacity, but let’s focus on three main types:

1. Lag Strategy: For smaller firms with limited capacity needs, the lag method emphasises having sufficient resources to meet demand rather than planning demand.

2. Lead Strategy: As a result of the lead strategy planning technique, they can accommodate the rising demand if they have enough resources to meet demand estimates.

3. Match Strategy: To use this technique, project managers must continuously analyze real demand, demand planning assumptions, and market developments.

The benefits of capacity planning

In business, it is important to be able to plan for the work that is going to be done. This is done by estimating the work and then breaking it down into manageable tasks. The benefits of capacity planning in scrum are:

1. Reduce Stock Outs: Capacity planning helps managers make decisions about what they should order or produce before they run out of stock. If a manager underestimates demand, there may not be enough products on hand to meet customer demand. Companies need to maintain proper inventory levels. So, businesses can provide products or services at a time when their customers need them.

2. Identify Inefficiencies in Business Process: With proper utilisation analysis, they can identify places where their business processes need improvement. They will know where their bottlenecks are, which areas need more production power, and so forth. They can then determine how much space they need for their employees and equipment. Plus, how many employees they will need on staff?

3. Utilisation Analysis: Managers use utilisation analysis to determine how much time an employee has left before they take an extended break. If there is room for them to expand in the building, or if they need additional equipment.

4. Efficient Delivery System: Modern customers want to buy goods as soon as possible, so it's important to gauge their delivery capacity. And it ensures that there are enough workers on the front line who can carry out that promise to guarantee a product delivery as soon as possible. That way, they are among the competitors in the market that have fast deliveries.

5. Confirm Availability as per demand: Capacity planning helps to ensure the workforce and resources to take care of their new customers, projects, and confirmations. So, have enough knowledge before signing a new contract.

How does capacity planning help in sprint planning?

Sprint planning is the process of estimating how much work can be accomplished over a given period. This includes tasks, bugs, and story points that are planned to be done during the sprint. Capacity planning is a part of this process because it provides an estimate of how long it will take to complete these tasks. It also helps with determining whether there is enough capacity for the team to accomplish everything that needs to be done.

Capacity planning involves determining how much work can be completed by a team within a certain period. This is used in collaboration with Sprint Planning, which establishes how much work can be completed during that period. This helps everyone on their team stay focused on what they’re responsible for. Plus, how long will it take to complete their part of the project?

In other words, the ability to carry on with several plans if the original plan isn't what it could be.

The benefits of certification in capacity planning in the scrum

If anyone is looking to take the next step in their career, consider getting certified in capacity planning in Scrum. The first step is to take the Certified Scrum Master course from StarAgile. 

The CSM Certification is a valuable resource for professional improvement. The training provides the practical knowledge that is needed for the workplace and professional development. It’s a great way to raise the salary, and give the credit of possessing an official designation in scrum master. Also, it helps to set candidates apart from their co-workers. 

A Certified Scrum Master will get all the tools necessary to make their scrum team more productive and efficient. 

Certified Scrum

Master Course

100% Success Rate

View course


This post helps to better understand the concept of capacity planning and what it means for a scrum. Anyone will be able to use this information when working with their teams to help them understand how their work will be evaluated. Also, they can identify what their targets should be. Scrum requires a certain amount of work to be done for the product owner to decide whether the team can finish delivering their anticipated value by the end of the sprint or not. Don't forget that plans are always changing. So make sure anyone is staying up-to-date on the latest trends in capacity planning. Plus, it gives everyone a chance to provide input into the process.


Share the blog

Keep reading about

Card image cap
Agile and Scrum
CSM Certification vs CSPO Certification
calender05 Jul 2019calender15 mins
Card image cap
Agile and Scrum
Overview of PMI-ACP Certification
calender28 Jun 2019calender12 mins
Card image cap
Agile and Scrum
Do We Need an Agile Coach
calender27 Jun 2019calender15 mins

We have
successfully served:


professionals trained




sucess rate


>4.5 ratings in Google

Drop a Query

Email Id
Contact Number
Enquiry for*
Enter Your Query*