How to Do a Resource Analysis: A Step-by-Step Guide

To reach a specific objective, project managers carry out resource analysis. Here's all you need to know to start doing it.
Iryna Viter

Resource analysis is a vital step for any project, especially when you need to know exactly how long it will take and how much it will cost.

It is a complex process that can intimidate even the most experienced project managers. It involves putting together loads of information, analyzing specific criteria, coming up with as few conclusions as possible and making sure all your resource data get organized into a single document.

But no matter how tricky it gets, there is no way you can afford to neglect it. Resource analysis is an essential tool you can use to make better decisions. It helps you plan your project well and to keep track of project performance. It can also help you plan ahead and schedule activities more effectively.

Luckily, it doesn't have to be as complex as most people make it — not if you know the best way to do it.

What is resource analysis in project management?

Resource analysis stands for the steps you take to identify and realistically evaluate all the resources at your disposal (resource availability) to reach a specific objective or deliver a project.

Put simply, it's a method for collecting and analyzing data about the people (and often equipment) needed to complete a project. It's a means to construct an accurate picture of exactly how long your project will take, how many people will be needed to complete it, how many people you currently have available, and how much money the initiative will cost altogether.

Imagine if you were building a house, only to realize halfway through construction that there was no way you had enough lumber to finish it! You'd have no choice but to start over again from scratch—not only would that mean wasting all of the time and effort you spent thus far on the house (never mind losing whatever progress your workers made), but also that you'd have to delay moving in.

And this applies to project management, too. Your project can face frequent delays or even stop dead in its tracks when you lack resources. This is why resource and capability analysis is a powerful tool for predicting and preventing potential project stagnation and failure due to missing resources.

But there is no denying that this process can be complex and time-consuming. With that in mind, Runn developed a set of features that automate various aspects of resource analysis and more. You can simply Sort Resources by Availability and get a realistic image of your current resource pool.

resource analysis

Why resource analysis is important

Before anything else, a company's resource and capability analysis helps you make sure that you not only have the needed resources but also use them wisely and efficiently. You get to find out what resources are crucial for the success of your business, and which areas of the company or product need more focus, investment, and improvement.

A lot of times, people make plans with little idea of what they'll actually need to pull it off. When they start moving forward, they're surprised by all sorts of obstacles. They end up having to scramble for financing or they realize they don't have enough time to finish the job properly or they just don't have the know-how to do what needs doing.

A resource-based view analysis gives you a chance to look into those things before you start, which will make your project better from the beginning and save a lot of headaches down the line.

When resource analysis helps

Building a resource based view analysis can be of use in a number of cases.

  • When you need to optimize resourses. When a new project comes in, you need to see what resources you have available, how you can engage them in the upcoming project, and what you need to do in order to reach maximum efficiency with what you already have so you don't have to hire or outsource unnecessarily.
  • When you want to identify your limitations. In this case, limiting factors are the things that can slow down or kill a project if they aren't available when it needs them. For example, if your company is building an office building and has scheduled 5,000 man hours for construction, but the construction crew has only 4,000 man hours available, that's a situation that needs to be dealt with before it becomes an issue with the project.
  • When you want to hire right. Making random guesses when scaling your team or company can backfire — you might be forced to scale down after a string of unsuccessful projects. But with a resource analysis on the table, your human resource gap analysis will be much more realistic. You will know exactly what teams need reinforcements, what kind of reinforcements, for how long, etc.

6 steps to performing an effective resource analysis

There are different ways to carry out a resource analysis. But it's best if you always look at different metrics to understand the full picture.

For instance, with Runn's real-time charts you can look at your resources from different angles to conduct a reliable resource needs analysis.

1. Analyze your resource pool

Resource and capability analysis is designed to give you in-depth insights into your resource capacity. This is why you need to start by looking at availability — is there anyone underbooked who can work on your upcoming project? Is someone getting overbooked and might have to work extra (which you want to avoid)? Remember to account for vacations, day-offs, and force majeure situations here.

The next step in the human resource planning process is to check which roles or teams have the most availability. Is there any way you can optimize those resources or rearrange them to meet the upcoming project needs with what you currently have?

how to do resource analysis

2. Compare confirmed workload vs capacity

With the chart below, you can see each individual's capacity and the workload that has already been confirmed. Keep in mind that some projects get cancelled, changed, shrunk or expanded so if the workload hasn't been confirmed there yet — you might have some wiggle room to account for in your resource analysis.

resource and capability analysis

3. Look at utilization rates

Utilization rates will show you how many hours of your team's work are billable and non-billable. For example, when someone is doing admin work, this is beneficial for your company but it is not something you can charge your clients for.

Human resource analysis should help you see if your team is hitting high utilization rates. And if that's the case there might be little room for resource optimization which means you will have to add more hands to the team.

human resource analysis

As luck (or analysis) should have it, Runn also gives you the opportunity to check utilization rates on specific projects. This way you can see where your competitive advantage is.

4. Check existing placeholders for new resources

You use placeholders when you have a project to plan out but don't know who to assign to it just now. Creating those placeholders is, in a sense, like doing a jigsaw puzzle. You first get a picture, a frame to hold it, and then match the right puzzle piece to the spot where it belongs.

Creating placeholders is a smart resource management technique. After planning out your project, adding placeholders, and after preparing a job analysis, you will be able to see what the missing parts of the puzzle are — where you're missing experts or man hours.

resource needs analysis

5. Drill down into the numbers

One of the well-known dangers of project management and resource analysis is the fact that it can get increasingly fragmented. You can end up with dozens of dashboards, each showing you a little bit of everything but nothing truly valuable. Add to that a team of over a hundred people or even multiple projects — and things can get ugly, literally.

This is why it is so important to have a single dashboard for all your needs, so you always have the right information at your fingertips. Runn's people explorer report lets you see everyone's capacity, overtime, remaining availability, and a lot more per time frame you select.

resource-based view analysis

6. Do scenario planning for all the what-ifs

This is something everyone wishes they could do in their personal life: when choosing a career, moving to a new city, or eating too much cake. But in advanced project management, those what-ifs are very much a reality — they call it scenario planning.

When doing portfolio analysis and resource optimization you set out to build a solid resource calendar. But what if some scope creep happens, what if someone leaves the team, what if? Then your plans and calendars might get irrelevant. This is why you need to plan the what-ifs, too.

Runn has developed a feature to do just that, scenario planning. Here you can see how your plans will change under various scenarios: if there is a delay, a change in resources, other projects getting launched in parallel to yours, etc. Simply create those variations as tentative projects and get a look into the future.

Resource analysis can be daunting at first. But, as with many things in life, the process will become much clearer as you work through it step-by-step.

See how Runn can ease you into resource analysis by signing up for a test drive of the tool now!

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