Here's how to set up a Resource Management Function – including building the business case, securing buy-in, establishing governance, embedding best practices.
Chances are you already know the value of effective resource management, both in day-to-day operations and long-term strategy. The problem is convincing everyone else, building a case, and maturing.
The potential benefits of centralizing resource management are numerous: from better cost control, to project success.
In this ebook, you’ll find practical information and inspiration – from understanding and articulating the advantages of a resource management function to developing a strong business case, and then the steps to successfully launch your own RM initiative.
And, even better, it’s full of insights from Laura Dean Smith – Director of Resource Management at Clarivate, a leading global information service provider – based on her personal experience of setting up a Resource Management Office in a complex multinational organization.
A resource management function, also known as a Resource Management Office (RM function) is a central business team responsible for resource management and allocations. The key word here is ‘central’.
Instead of resourcing decisions being made at a team or departmental level, the RM function oversees the process, to ensure efficiency, fairness, and standardization.
This is particularly beneficial in larger organizations, where a non-standard approach to resourcing can undermine utilization, billable hours, and revenue.
Some of the key responsibilities of a resource management function include:
Related: Resource Management - A Complete Guide
The primary goal of resource management is to ensure that resources are allocated to maximize operational efficiency, productivity, and profitability. It does this by strategically aligning resources with organizational goals, optimizing resource utilization, and identifying areas for improvement in resource allocation processes.
But we all know there’s more to resource management than slotting pegs into holes. Resource management also supports wider business objectives by preventing employee burnout, creating upskilling opportunities, improving employee engagement, matching people to meaningful work, reducing disruptive turnover, and more.
Despite our shared love of resource management, it remains an often misunderstood and underappreciated discipline.
This lack of widespread understanding poses challenges for ambitious professionals like you, who can face an uphill battle to get buy-in for resource management initiatives.
Setting up an RM function is a major change for an organization used to a decentralized approach, so you need to equip yourself with all the arguments in favor of an RMO.
Money talks, of course. The biggest benefit of a resource management function is the additional revenue that a business can achieve through even modest utilization gains.
However, the advantages go beyond financial measures, amplifying the benefits of resource management as a whole, and significantly enhancing decision-making.
On the surface, the benefits of an RM function look similar to the benefits of effective resource management. If you imagine the benefits of optimizing resources across individual projects or departments, it stands to reason that the benefits are bigger when you optimize across an entire organization.
However, this isn’t the only advantage. The true benefit comes from having a holistic picture of resource management across the whole organization and what that means for strategic decision-making and future direction. Let’s start with the big one though – the bottom-line benefit of better resource management – money.
According to the Resource Management Institute calculations, a one-point increase in utilization can save the business $1,000,000+ extra revenue in a 300-person business. If that isn’t an excuse to get excited about resource management, we don’t know what is.
When I presented the figures for our organization to our Senior VP, it was eye-opening. He keeps a close eye on utilization rates now. It gave a financial justification for introducing non-billable roles. It showed that while the RM function isn’t directly generating revenue, it has a direct, positive impact on revenue. - Laura Dean Smith, Director of Resource Management at Clarivate
When you’re making the case for your Resource Management initiative, this should grab attention, especially if you can demonstrate how it will lead to that increase in utilization.
Did someone say ‘increasing utilization’? By centralizing resource management, organizations get a holistic view of resource availability and demand across all projects and departments. This enables more efficient allocation and utilization because resource managers can allocate and optimize from a wider pool of resources.
An RM function ensures resource allocation decisions are aligned with the organization's strategic objectives, not just individual team or project objectives. By prioritizing projects and initiatives that directly contribute to business goals, an RM function maximizes the organization’s overall success.
An RM function establishes and embeds best practices across the organization, leveling up standards in every corner of the company. By establishing clear guidelines and workflows for resource management, an RM function improves overall quality, consistency, and compliance.
Without a centralized resource management function, senior leaders can’t see the bigger picture. They can only see information at a local level, when they need a bird’s eye view. A centralized RM function provides better visibility into resource utilization, availability, and allocation at an organizational level. This visibility supports more informed decision-making, risk identification, and capacity planning.
When centralizing resource management in an RM function, you also centralize resource data – what’s collected, where it’s kept, and how it’s used. Breaking down data silos means organizations can forecast future resource needs and plan for long-term capacity requirements more effectively. Plus, by analyzing trends over time, RM functions can identify opportunities for organization-wide resource optimization, such as skills development, cross-functional collaboration, and resource-leveling.
Continue reading: A Value Proposition for Resource Management [Interview]
Now you know what a Resource Management Function does as a whole, it’ll help to understand who’s responsible for actually delivering that program of work.
According to the Resource Management Institute, 41% of RM functions have 2-5 people, followed by 24% with teams of 6-10 people. Within these teams, each resource manager is responsible for around 25-200+ people, depending on the size of the organization.
Different sectors and organizations will have their own take on RM function team roles. However, the most common ones are as follows.
While centralized resource management brings significant benefits to a professional services firm or project-based business, change is always a challenge. Here are some of the issues you’ll need to overcome in your epic quest to improve resource management in your organization.
Centralized resource management is a relatively new concept compared to more established functions like HR (The PMI started referencing RMOs in the early 2010s) so you may need to establish the business case to prove the value of centralization.
Departments accustomed to managing their own resources may resist centralization and question the logic behind the proposal. Engage stakeholders to try to win favor – but the proof may have to be in the pudding.
RMO staff don’t deliver billable hours, so a business that’s used to a charge-out rate may struggle with the idea of introducing non-billable staff. However, you can get around this by demonstrating their ROI – more on this later.
You’ll need centralized data to deliver centralized resource management – but it could be siloed all over the company in the beginning. Implementing appropriate resource management tools overcomes the problem of centralizing and standardizing resource data.
Your RM function will only be as good as the people you hire. Establish your employee criteria and consider how to recruit, retain, and upskill them.
Establishing clear roles, responsibilities, and decision-making processes is essential when setting up a resource management function from scratch.
While this might seem daunting, people have done this before you. Laura Dean Smith provides some concrete strategies for overcoming these hurdles in the step-by-step guide below.
The first steps toward establishing an RM function are – possibly – the hardest. They’re all about building your business case, getting buy-in, and overcoming resistance.
Once you’ve achieved this, there’s just the small matter of actually setting it up – establishing policies and procedures, building your dream team, implementing new systems, centralizing data, and getting to work.
If you’re reading this guide, you’re either planning to propose an RM function or you’ve been tasked with setting one up. The first stage is to establish the rationale for creating an RM function. This will help to build your business case later. For now, it will inform important conversations to come, helping you articulate the benefits to key stakeholders.
Consider the following questions:
When she was building her resource management function from the ground up, Laura Dean Smith started with a ‘listening tour’.
This involved talking to all key stakeholders in the process – from senior managers and department heads, to project managers and team members – to understand their take on the state of resource management at Clarivate.
She sought to understand the strategic objectives that a centralized RM function could support – and the day-to-day frustrations it could overcome. This made it much easier to create an RM function proposal that met business needs and won buy-in.
On my listening tour, I asked a lot of questions related to resourcing – without mentioning resource management. I really wanted to understand the current state [of resourcing] and whether people had an understanding of resource management principles or practices.
Through my tour, I identified some common themes – where people were struggling, finding some challenges, and experiencing some overload. Then I took those and I created a proposal for how I could address each of these different areas – where I thought that resource management could come in and help, and serve the business as well.
Once you’ve completed your ‘listening tour’, you’re ready to start building your business case.
This will be the proposal you take to senior managers for sign-off – getting buy-in for better resource management, and securing the support, budget, and resources you need to implement your RM function initiative.
To create a compelling business case, you need to:
Having got buy-in from your RM function from senior management, you may still meet resistance from other colleagues. Your RM function is going to need strong, collaborative relationships with these stakeholders if it’s going to succeed. So your quest to win hearts and minds continues.
Once Laura Dean Smith got buy-in for her RM function initiative from her Vice President, she asked them for a statement of commitment to it. This helped her to overcome resistance to change elsewhere in the organization. Resistance that is normal and understandable, she explains.
I knew that we would be introducing a lot of change to these business units by introducing resource management. And the change was not going to be fully welcomed at first. In a professional services business, our resources are people, and project owners need people to deliver their work. So there's always going to be conflict with resources.
And then there's a lot of sense of ownership or protectiveness that people have over their team members. And resource management coming in and saying “You're not going to make all of the project assignment decisions for your people anymore” is difficult.
Change management was critical to being able to go out with the different groups and establish that sense of trust and build that relationship.
In this context, empathetic change management is critical. Laura explains that she approached the challenge with transparency as a watchword, knowing that future relationships would shape the success of her RM function.
Giving people full transparency was important. We're really big on transparency in my team. I have a central SharePoint site and every single thing that we publish or do or give direction on is there. We're not trying to hide anything. We use both change management and transparency to help to establish that trust.
With insights gleaned and buy-in secured, it’s time to firm up the charter for your RM function – defining the scope, purpose, and priorities of your resource management function.
This will help you create a framework for the success of your RM function, and manage expectations of the services you’ll provide.
Ask yourself questions like:
You also need to work out the optimum structure for your RM function. This will depend on the wider organizational structure and where the RM function fits within it.
You’ll need to consider things like:
Create relevant visualizations to help people understand how the RM function sits within the business and who it comprises.
Now you get to build your RM team. The exact make-up of your resource management function or RMO will depend on the unique needs and structure of your organization. See Chapter 1 for different roles you’ll need to consider.
Once you’ve established your RM function structure, how do you identify and secure the talent you need? Your RM function will face the same problem you’re trying to solve for the business – getting the right mix of people, skills, and experience to deliver your workload effectively.
Here are some tips when planning and recruiting for your RM function.
You can write your mission and vision at any point in your RM function setup. However, Laura Dean Smith chose to wait until her team was in post to write hers.
She worked with her new team to closely align her RM function values to the overarching values of Clarivate, as she explains.
We have a set of values within the company and I worked with my team to align our values to our company's values. These values – aim for greatness value, value every voice, own your actions – are the values of Clarivate. And we took those values and thought about how are we going to apply these values to our day-to-day work as a resource management office. I did our mission, vision, values, and purpose with them. So that we could all have that sense of ownership over these core concepts of how we're going to approach resourcing for our business.
Centralizing your organization’s approach to resource management means applying standardized policies and processes across the business. This is where you develop them.
You don’t have to start from scratch.
Researching industry standards and best practices can help – for example, through membership of professional bodies like the Resource Management Institute and access to their resources.
You may also start with the processes currently being used in the business – and feedback from stakeholders on what works and what doesn’t – to improve them.
As Laura Dean Smith said earlier, Resource Managers love their data. And it is through data access and analysis that they can deliver business value.
An RM function needs data that is centralized and standardized in an appropriate resource management platform. At RM function level – where your role is to increase efficiency and drive ROI for your business – resource management in Excel just isn’t sustainable.
Data captured in resource management software includes:
This information helps the Resource Management Office make informed decisions, optimize resource allocation, identify potential bottlenecks or overloads, and proactively address resource-related challenges.
A resource management tool also visualizes data in intuitive charts, heatmaps, and dashboards – so your resource managers can quickly make confident data-based decisions.
Check out our buyer’s guide to resource management software to help you pick the best RM software for your team.
And rest assured that you won’t be alone. If your chosen software vendor is anything like Runn, they’ll have an onboarding team to help you transition to your new resource management platform and get your data migrated to the new system.
Resource management KPIs are how you’ll know if your RM function is successful and driving desired objectives for the wider business.
Your exact KPIs will depend on the strategic goals of the organization that your RM function supports. For example, these might be around increasing utilization, driving cost efficiencies, or surfacing spare capacity. (Let’s be honest, it’s probably all of the above).
Once you’ve established your KPIs, establish mechanisms for ongoing monitoring, evaluation, and review.
In a large organization, how can resource managers possibly get to know all of the resources they’re responsible for allocating? Laura Dean Smith has some suggestions here.
In a smaller organization, you may be able to meet all of your resources personally. Schedule meetings to discuss people’s skills, experience, interests, and aspirations. You may also review individuals’ resumes or other sources of career information, like their LinkedIn profile and HR records.
Key questions:
In larger organizations, meeting each resource individually might not be feasible. In these cases, Resource Management software should provide relevant information about each team member – their skills, expertise, past allocations, career aspirations.
You can also use resource management software to look at how projects have been staffed in the past to understand typical resource allocations. (If your organization isn’t currently using a Resource Management platform, that can go on your list of improvements to implement!)
Think of how you can develop and deepen relationships with resources over time. Consider opportunities like drop-in sessions for existing employees to discuss career development plans, and introductory meetings with new joiners as part of their induction process.
It’s important to maintain a good ratio of resource managers to people managed. If your resource managers are overwhelmed by the number of resources they look after, they won’t have time to work their magic – getting to know everyone at an individual level.
Determining the optimum ratio, however, isn’t straightforward. It depends on factors such as the nature of the resources, the complexity of their work, the level of autonomy resources have, the predictability of their allocations, etc.
Generally speaking:
At Clarivate, Laura Dean Smith aims for a ratio of one resource manager to 75-110 resources managed. Here’s how she came up with that number.
A standard ratio is 75 to one resource manager. Using that as a starting point, you need to consider factors like: How quickly are your projects turning over? How many projects does one resource have at a time? Is it a global pool where all of the resources are shared? Or do you have dedicated pools of resources to certain areas and there's not a lot of sharing? All of these different factors can play into what your ratio needs to be.
A practice that has longer-term projects, could probably do a higher ratio. Most of our projects are between three to six months and there's a lot more turnover and project work. So it means we need a smaller ratio.
This will vary depending on the organization, size, sector, etc. However, here are some common policies that most RM functions will require.
The following policies and procedures may fall under the remit of the Human Resource department, with scope for input from the Resource Management Office.
This is your classic ‘how long is a piece of string’ type question. Obviously, the answer will depend on a number of factors, such as:
Larger organizations typically have more complex structures and processes, which may require more time to establish an RM function.
Organizations with complex projects and resource allocations, diverse stakeholder involvement, or regulatory requirements may take longer to establish robust RM practices.
The more resources that need to be managed, the more time it will take to set up the RM function. This includes assessing current resource management practices, implementing new systems or processes, and training staff.
A higher level of resource management maturity may mean that some foundational elements are already in place – such as centralized resource management software and data – which accelerates the setup process.
Given these variables, it's hard to give a firm estimate of how long it takes to set up an RM function – however, expect it to take somewhere between three months to a year.
Remember that you don’t have to implement the RM function’s approach across every team immediately. You can start with a single champion team that welcomes the change.
This makes implementation easier and gives you the chance to test and refine your approach before a larger rollout. Plus, you can use the improved outcomes of the champion team to gain buy-in from those who are more skeptical – your challengers.
