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Iryna Viter

Resource Management: The Complete Guide

All businesses delivering services need to tap into resource management, and for good reason. To make more money than they spend, levelling up their resource management is crucial.

A good service business is built on the right tasks being performed at the right time by the right people with the right skills. And no matter how easy and trivial it sounds, this equation is hard to crack in practice. 

When you’re managing resources on a project, things can get 100% overwhelming. Trying to stay on top of moving parts, stakeholders, budgets, and different stages is a juggle that can very quickly go wrong.

A solid resource management strategy sets out to put all these things into perspective, especially in a service business.

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What is resource management?

By definition, resource management is the practice of regulating and assigning your team's resources to projects to maximize efficiency. 

In business speak, a resource can be anything involved in the success of your project, be it human time, skill, laptop, or material. 

While resource management can mean different things in different contexts, in professional services businesses, it often refers to matching experts to projects considering employees‘ preferences, client needs, and company goals.

The task of every resource manager is to make sure that people's talents are deployed optimally and strengthened to meet leadership's goals. 

In her job description on LinkedIn, Stefanie Pouthier, Head of Resource Management at Capgemini, draws a clear line between resource management and HR: 

We do not deal in recruiting, HR operations, payroll, and the like - experts in these fields handle that part. We're supporting the business with the "matching magic", assessing and improving processes and tools.

Alternatively, here's how our COO Nicole defines the term:

‘‍Often, people ask us “Isn’t resource management just scheduling resources?” says Nicole Tiefensee, co-founder of Runn. ‘And I say “Sure, that's part of the puzzle – allocating people to projects - but strategic resource management is so much more.’

Resource management is an old-school term that comes from manufacturing. It's taken us a while to find our place in that category, because for us resources are people, not cogs and wheels in a machine. Resource management today is about orchestrating your team in a way that boosts both your business and your workforce. It's about achieving nimbleness, aligning with business values and goals, and fostering growth – both for the company and the individuals within it.

Why is resource management important?

Clearly, the goal of resource management isn’t simply improving how you plan and manage resources on a particular project. There is a bigger picture beyond day-to-day operational concerns. At a strategic level, project resource management can: 

  1. Get the organization and its people positioned and strengthened to meet leadership's vision. 
  2. Create a more dynamic, profitable, and scalable business. 

Essentially, the purpose, objectives, and the value proposition for resource management will depend on the business goals. 

For example, let's say that the biggest business objective at the moment is revenue growth. Here's how resource management can help in this regard: 

By adopting resource management practices, business leaders would be able to focus resources on projects that are the most profitable. 

The benefits of resource management

Among the day-to-day benefits that resource management creates, we've observed the following: 

1. Increasing project profit margins

Effective resource management helps project managers estimate projects more accurately. Under-estimating the resources needed for a project can cause delays to the schedule and incur extra cost to get it back on track – through overtime or using higher-priced contractors. This eats into project profitability.

Resource management software can help to create a detailed resource management plan for every project phase – balancing their cost against the budget and profitability requirements – so you can give clients a reliable quote and be confident you’ll stick to it. This helps improve the accuracy of future forecasts. Multiplied across all of your projects, this can boost your overall profitability.

2. Improving resource utilization

Your people are your biggest asset and your biggest investment, so it’s important that you leverage the most value from their time. One of the aims of resource management is to optimize resource allocation and utilization. That means making sure they’re delivering maximum value through billable work – not underworked and killing time with admin, not overworked and too stressed to be productive.

Resource management software like Runn provides a bird’s eye view of resource availability so you can easily assign and reassign work - to hit the Goldilocks spot where all of your people are working to optimal capacity and projects are running to schedule. 

This doesn’t just keep your budgets under control, it keeps your colleagues and clients happy too. This means lower staff churn and higher customer satisfaction, both of which can boost your business.

3. Informing recruitment activity

If your business is going to grow, you need the right people in the right place at the right time. Too few resources and you won’t be able to take on new projects. Too many resources and your profit will get eaten up in unnecessary wages. The wrong type of resources and you’ll not be able to deliver quality outcomes.

Effective resource management gives you a better insight into future resource needs (resource capacity planning) so that your HR team can take timely action to recruit the right people and skills to the business. This gives you the confidence to take on more work, knowing you’re equipped to deliver. 

4. Improving future forecasts

So much of a project-based business relies on estimates and best guesses, often informed by piecemeal data in different systems. It’s understandable that there’s often a discrepancy between predicted and actual costs.

Resource management software can help reduce those discrepancies by providing historic data on how accurate predictions have been. This helps improve the accuracy of future forecasts. With reliable, data-informed insights - into resource requirements, schedules, and profitability - your business can plan for the future with certainty.

5. Boosting employee engagement 

The idea behind resource management is for the business to be aware of every individual's skills, capabilities, and preferences to assign them to work that feels meaningful

In high-performing organizations, resource management looks beyond just what the business needs in terms of talent and time. It also prioritizes what its people need - knowing that is mutually beneficial. 

Truly strategic resource management recognizes that an organization can’t achieve its potential without harnessing the full power of its people. This is especially true in a professional services firm, where knowledge workers turn their knowledge and creativity into client deliverables.

Research from McKinsey & Co shows when people find work meaningful, performance improves by 33% and they are 49% less likely to leave. 

Equipped with information about individuals’ preferences, ambitions, interests, and development goals, resource managers can make better-informed allocation decisions - placing people in projects that ignite their passions and benefit the business.

Resource management challenges

Resourcing, however, is quite challenging. Here are a few things that can break it:

1. Lack of transparency 

Transparency is essential for effective resource management. You need to know who's available, what their skills are, if they're earmarked for other projects, whether they're operating at capacity or have bandwidth for more work. Without this information at your fingertips, your project plans are a shot in the dark. This can mean last-minute changes to your best-laid plans. And that undermines your ability to deliver desired project outcomes.

2. Poor capacity planning

Capacity planning is about forecasting and matching supply to demand - looking ahead and making sure you have the resources you need for current AND future projects. If your organization isn't planning capacity effectively, you'll struggle with resource planning and project management.

That's because you'll have to work within unreasonable constraints like lack of resources, lack of appropriate skills, and potential project clashes. This means you'll have a difficult time trying to deliver your project on time or on budget. And that means cost overruns, unhappy clients, or both.

3. Mismatched skills

One of the key elements of resource management is making sure that the right people are allocated to the right projects at the right time. Otherwise, you risk assigning people with sub-optimal skills who aren't qualified for the task. Or the opposite - assign overqualified resources who cost more than you need to spend. Either way, your budget and the project's success is at risk. Creating a central talent pool and using resource management software to see resource skills and allocation can help prevent this problem.  

Related: Centralized Resource Management: The What, Why, & How

4. Unrealistic schedules 

Your projects need to follow a critical path and each part of that path takes a certain amount of time. Inaccurate predictions can lead to resource clashes, missed availability, and schedule slippage. When this happens, you need to respond and recalculate your resource needs. Without agile resource management tools - like scenario planning and tentative scheduling - this can be a time-consuming process.

5. Past-their-best planning tools 

Sometimes your planning tools start out great. But as you grow, they grow unwieldy. More projects, more staff, more complexity. Otherwise organized resource managers find themselves in a constant state of reaction and project managers are unable to get ahead of their projects - thanks to formerly fit-for-purpose planning tools like Excel or Trello. Using dedicated resource planning software makes life easier, so you can do what you need and get back to other work.

Continue reading: Why Resource Planning in Excel is Unsustainable

6. Deadline drift and scope creep 

One of the biggest challenges in project management is moving goalposts. Whether that's intentional ('Can we add these deliverables?') or accidental (like client failure to provide input in a timely fashion). In agencies and professional services firms that manage multiple projects, these changes can have a knock-on effect for other projects and clients. Agile - and intelligent - reallocation of resources is essential to keep every customer happy. Thankfully, resource management software can help, with drag-and-drop reassignments and bulk rescheduling. 

7. Siloed resources 

If your organization has multiple locations, there may be separate human resources teams - and siloed information about resources. This can mean you're not always aware of the resources available to you. As a result, you might be using sub-optimal resource for your project in location A, whilst the perfect person is being underutilized in location B. One way to overcome this is to have a centralized resource pool that provides organization-wide visibility into who's available. 

8. Lack of business intelligence 

Business Intelligence means the information required to make data-informed decisions. In terms of resource management, you need data on things like resource efficiency, variance between forecast and actual hours, and difference between budget and project cost.

Without this data, you won't know whether you're performing on - or under-target. Replicated across an entire organization, that can mean devastating underperformance. The good news is that resource management tools typically include an analytics function that shows key performance metrics at a glance.

Resource management techniques

Resource management covers a range of techniques, designed to help a business derive the highest value from its people. Here are four you need to understand if you want to improve the project performance and profitability - without negatively impacting on your talented team members. Each of these techniques can be made easier and quicker by using appropriate software.

resource management techniques

Resource allocation

As the name suggests, resource allocation is the process of allocating your resources to projects. But it isn’t simply a case of simply selecting the first suitably qualified Graphic Designer, for example, and assigning them to a project. It is much more nuanced and strategic. 

Done well, resource allocation aligns people, skills, availability, activities and timelines - to achieve optimal outcomes for individual projects and the wider business. It involves seeking out the best people to work on a project, based on their skills, their cost, and their availability. 

A Project Manager needs to balance these factors to be able to deliver a project on time, on budget and to the desired standard. For example, sometimes a PM may decide to use someone less qualified and upskill them to stay within budget. Or to move a project to avoid an in-demand team member becoming a bottleneck. 

Resource management software gives project managers the information they need – like capacity, cost and skillset - to quickly build their dream team.   

Resource utilization

Resource utilization is a measure of how much work your resources are delivering. It’s important to track resource utilization at an individual and organizational level. 

At an individual level, tracking utilization lets you see whether people are being over-used (and might be at risk of burnout) or under-used (meaning they have capacity for more work). 

At organizational level, trends in resource utilization can provide insights into whether you have the right mix of people and skills that you need. This can inform recruitment strategy. By monitoring resource utilization, companies can right-size their team, recruit the most in-demand skills, and keep workers engaged and productive. 

New to utilization? Check these guides: 

Resource leveling

Resource leveling is a technique to resolve scheduling conflicts and overallocation of resources. It involves adjusting project schedules to create a more manageable workload for the person/people involved. Not only does this keep your MVPs working at optimum capacity, it also means you can complete projects without needing to buy in additional resource. 

Resource forecasting

Resource forecasting is about looking to the future and ensuring your resources can meet demand. For example, you may be taking on more projects and require additional resources – or different types of projects that will need different skills and expertise. Either way, you need to understand the implications of pipeline projects, so you can prepare in good time. Without resource forecasting, you risk overallocation, resource clashes, skills shortages, and project bottlenecks. 

Who is responsible for resource management in the business? 

Now that you know about the challenges and specifics of resource management, you're probably wondering who is responsible for setting up and growing the resource management function. 

Organizations approach resource management differently. Sometimes, it falls under the responsibility of strategic business leads and PMOs. Other times, and we've seen it in enterprises like Baker Tilly, Guidewire Software, and Clarivate specifically, a dedicated Resource Management Office is established. 

The Resource Management Office, or RMO, oftentimes functions as the central hub for all resourcing processes and decisions running within the organization. We've explained the role of the RMO in a separate article, make sure to check it out as well.  

How to measure the success of resource management

How do you know if your resource management strategy is working and what results does the business expect from the resource management function? 

When it comes to the resource management KPIs, the Resource Management Institute found that most companies look at the same indicators. And for most of them, resource utilization, project staffing timeliness, and resource forecasting accuracy are the biggest expectations from the RMO.

You may also want to track the following resource management metrics:

  • Resource request cancellations: Tracks the frequency and reasons for cancellation of resource requests, indicating potential issues in planning or communication.
  • Resource extensions: Monitors the occurrence and justification for extending resource allocations beyond their initial timelines, reflecting on project management and forecasting accuracy.
  • Time to staff: Measures the duration taken to fill resource requests, with a focus on improving efficiency and responsiveness in staffing processes.

These metrics help in tracking efficiency, managing resources more effectively, and identifying areas for improvement in resource management processes. 

The focus is on understanding the reasons behind cancellations, managing extensions properly, and reducing the time needed to staff projects, all aimed at improving service delivery and customer satisfaction.

The importance of having the right resource management tool

To centralize all the information and streamline the reporting process, you might need a tool.

In years gone by, resource management tools were somewhat of a luxury. Now, they’re a crucial aspect of resource management techniques all over the world. The visibility and automation you get from a resource management software is a considerable advantage. There are many different tools you can use, and each one has strengths and weaknesses that affect their suitability for your needs. 

We've prepared the list of the best resource management tools here. ⚡

Getting started with resource management best practices

Resource management best practices are tried and true strategies to help you to deal with everything that’s involved with management and planning. When you follow these guidelines, you’ll be able to identify issues before they turn into big problems, and allocate resources to where they’re needed most. As you introduce resource management best practice, the processes will become more efficient.

The successful results of effective resource management have been seen over many years, in many industries, and in businesses of all sizes. There are a range of ways you can do it:

1. Streamline resource planning and scheduling

Resource scheduling is a complicated task. The flow-on effects from earlier project stages means resourcing requires constant updating, which adds more time, expense and stress.

However, the right resource management makes planning and scheduling as straightforward as possible. The idea is, you want to arrange what you need, when you need it, with the minimum of fuss.

You can do that by consolidating all information regarding resources in a shared place, so all stakeholders have the visibility. Aim for creating a resource calendar that will keep you posted on resource availability, everyone's bookings, and allocations. Consider using Runn for the purpose:

resource management calendar

You can also Identify the resources that are needed at specific times, so you can have them available only for the period they’re needed. This prevents double-booking resources, which can be expensive and embarrassing. 

Related: 5 Resource Management Reports to Facilitate Decision-Making

2. Identify gaps in resources and allocate them accordingly

Having visibility over your resources gives you the tremendous advantage of being able to see where you might be caught short. However, it’s not as simple as just seeing where a project might need additional resourcing.

It’s important you can weigh up different business priorities and projects to make the best decision for the entire business, not just one specific piece of work.

Instead of filling gaps with the first resource that’s available, it’s important to have visibility over all resources and all business areas. It’s no use pulling resources from one area to fill a gap somewhere else if it’s just going to create another gap.

➡️ Continue reading how to do a resource gap analysis here.

3. Forecast your resource availability

Maintaining an accurate and reliable resource availability forecast is crucial to planning and resource scheduling

For example, if you have a specific staff member whose skills are in high demand, it’s imperative for that person to keep an accurate diary of their availability in order to utilize them as efficiently as possible.

Being able to identify when your resources are being utilized and when they’re available will allow you to maximize the use you get out of them. If a resource isn’t required at a certain point in time, allocate it to another non-urgent piece of work. In Runn, you can sort the People Planner by availability:

availability in resource management

4. Plan effectively for projects in the pipeline

It’s not enough just to have a resource management plan for the projects that are happening right now. That will lead to problems when new projects that come on stream. 

Workload management is a crucial part of effectively utilizing resources, and having a holistic view of all pieces of work will allow you to do this as well as possible. 

For example, if the team is fully utilized for a long period on one project, it’s best to give them time to recover before allocating them to another one. If you know that the team needs time off, concentrate on another aspect of the next project while they recuperate.

5. Agree on a universal way to communicate and prioritize work within the organization

Having a project management communication plan makes a huge difference for understanding how and when to communicate with stakeholders. Good communication, or even overcommunication, is crucial for the success of any project, especially in an organization with multiple ongoing projects at one time.

For example, an important decision-maker might never check their emails. If the communication plan specifically spells out the requirement to be on email, you can avoid problems. Or, once you know that, you might as well agree to communicate in another way that suits everyone.

Having key staff members agree on business priorities can also lead to better resourcing, as it gives clear prioritization to the most significant pieces of work.

➡️ Related: What is Open Communication in the Workplace?

6. Keep in mind that resource management is a long and ongoing process

Effective resource management involves continually updating a resource’s availability throughout a project. It’s extremely common for plans to change, and you need to make sure you understand and communicate the effects of those changes so all stakeholders are informed.

It’s not enough to make a resource management plan for a project and then never look at it again. That can lead to confusion, double-booking and under utilization.

The best resource management plans are regularly reassessed against project evolution to ensure resources are allocated as well as possible, both for individual pieces of work and for overall business goals and priorities.

7. Use the right resource management tool to effectively practice allocation and management

As mentioned previously, having a resource management tool that fits with your project, your business and your personality makes a significant difference to your ability to get the best from resources.

The demands of projects and businesses today have changed significantly from those in the past, so it’s important to consider when your resource management tool was developed. If it’s old, there’s a good chance it may not be suitable for your needs, or that another tool is better equipped for the job.

Many of the benefits and best practices discussed above can be automated with the right tool, which is a huge bonus for project managers.

➡️ Read the full guide on resource management best practices here.

Resource management in action: Real case study examples

To get deeper into the inner workings of effective resource management practices, we’re going to look through two real stories from well-known companies. 

TPG Telecom

In 2020, the telecommunications sector faced immense challenges as remote work surged, putting strain on networks. TPG Telecom, however, rose to the occasion after a merger with Vodafone Hutchison Australia, thanks to their commitment to delivering for customers.

Cindy Tan, General Manager of IT Planning at TPG Telecom, led a large team working on 30 to 40 projects concurrently. Managing this operation became increasingly difficult as the team expanded, leading to a lack of project transparency and resource limitations. 

Main challenges:

  • Lack of clarity over ongoing projects
  • Resource constraints
  • Questions around the team’s workload, skills gaps, and project priorities

The initial attempt to address capacity planning was through an Excel-based model. While it provided some insights, it proved unsustainable for long-term resource management. Cindy's search for a suitable tool led her to discover Runn, a purpose-built resource management solution. Runn's intuitive interface and comprehensive features offered an ideal fit for TPG Telecom's needs.

Implementing Runn provided Cindy with accurate capacity planning and improved project sequencing. It enabled her to toggle projects and quickly assess resource constraints. Runn's transparency facilitated communication with stakeholders, as Cindy could demonstrate workload, resource utilization, and the impact of overutilization.

Being able to show overutilization is so helpful for explaining why something has been delayed, or why something cannot start yet. When we can show our stakeholders that overutilization is so high, they can empathize and understand the constraints of the situation. It helps facilitate conversations about priorities, about moving things back if needed, because they can clearly see that we’re at capacity. It gives us the ability to go back to other parts of the business and say, ‘Look, these individuals really can’t take on any more work.' - Cindy Tan, General Manager of IT Planning at TPG

The tool's benefits extended beyond resource management though. Runn's insights into individual workloads led to better work distribution and improved team morale. With administrative burdens reduced, Cindy had more time to focus on strategic aspects of her role and foster a culture of innovation.

The outcomes achieved through Runn were significant: capacity planning that took weeks in Excel was completed in just two days. Stakeholders were impressed by the clarity Runn provided, empowering Cindy to advocate for her team and make data-driven decisions.

The capacity planning we had done in Excel - which had taken weeks - well, when we did that same work in Runn, it was completed in two days.

Key learnings:

  • Effective communication is paramount
  • Large projects require comprehensive capacity planning
  • Transparency is crucial for successful resource management

➡️ Continue reading the full case study with TPG here.

TribalScale on streamlining resource allocation

TribalScale, a global digital innovation firm, faced resource management challenges as the business expanded. They relied on multiple tools and spreadsheets, leading to time-consuming data entry and disjointed reporting. Seeking a unified solution, they turned to Runn to streamline their resource allocation and reporting processes.

Main challenges:

  • Expansion leads to a lack of insight into resources
  • Having too many tools clutters the workspace and creates silos
  • Manual data entry is time-consuming and error-ridden

Runn's capacity charts and real-time updates enabled TribalScale to visualize allocation gaps and adjust plans efficiently. They could identify the optimal timing for hiring or shifting resources between projects. Additionally, Runn's built-in timesheets simplified tracking billable hours, improving accuracy and speeding up the invoicing process. TribalScale leveraged Runn's comprehensive reporting capabilities to monitor project status, team utilization, and overall business health.

The capacity planning chart really changed things for us. Being able to drill into a team and see where the cliffs are has been a huge benefit. - Jason Mills, Director of Engineering at Tribal Scale

Implementing Runn resulted in significant improvements for TribalScale. They gained a clearer understanding of resource allocations, reduced monthly invoicing time from four days to two hours, and enhanced day-to-day operations. Runn provided a unified platform for resource management, enabling efficient allocation adjustments and seamless reporting.

Key learnings:

  • Unifying resource management tools and processes is crucial if you need to eliminate inefficiencies
  • Real-time insights and visualizations are helpful in optimizing resource allocation and ensuring effective utilization
  • Streamlined timesheet tracking and reporting capabilities help you increase overall business transparency and invoice accuracy 

➡️ Continue reading the full case study with TribalScale here.

Final thoughts

Resources are precious, and it’s imperative for any business that they’re utilized as well as they can be. That includes people, equipment, technology and more. 

This is especially the case when it comes to completing business projects. Being able to say a project was completed on time and on budget is a significant achievement, and following resource management best practices dramatically increases your chances of doing it.

Runn resource management software has been developed with project teams in mind, so you have all your resources in one place. You can plan and forecast your capacity, availability and utilization effectively and efficiently, adhering to the highest standards for management and planning.

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