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.
What is resource management? Officially, the practice of regulating and assigning resources to business projects in order to maximize efficiency is known as resource management. In business speak, a resource can be anything involved in the success of your project, be it a human resource, a laptop, or a material. While resource management can mean different things in different contexts, in professional services businesses it often refers to managing human resources.
In that respect, resource management is bringing about the best from your people or material resources they use to succeed. The task of every resource manager is to make sure it all works in perfect harmony without overlaps and overloads.
The aim 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, better project resource management can create a more prepared, profitable, and scalable business. Here’s how.
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 PMs 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.
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.
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.
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.
By the book, resource management covers many processes, such as resource planning, resource scheduling, and resource allocation. But in broader terms, the ultimate purpose of resource management is to help your team be successful. It means planning for the team’s success. It means making decisions that help, rather than hinder, their success. It means understanding their strengths and weaknesses, and how to best use them. It means knowing what you need to do, and getting it done. Resource management forces us to think about how we're going to find the time and space for everything we want to do.
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Resource management is also about results. It's about creating an environment where people are self-motivated, bringing out the best in themselves, and helping others do the same. The best resource managers create environments where people feel like they're part of something bigger than themselves - not just a cog in a wheel or a widget on an assembly line, but an essential part of the whole. Resource management is about fostering cooperation between colleagues - working together to accomplish great things.
An organization without resource management is like a car with no driver: it will go nowhere fast. That being said, effective resource management is often the difference between success and failure. It’s critical to resource projects and departments appropriately - too little and they can’t achieve what you want them to, and too much leads to unnecessary expenses and underutilized resources.
The benefits of having a resource management strategy in place include:
Having a good resource management process in place also leaves a good document trail, which you can use when things don’t go the way you wanted. You can show you did the best with what you had, and illustrate learnings for the future.
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.
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 resource, 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.
One of the key elements of resource management is making sure PMs can assign the RIGHT people to the RIGHT project 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 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.
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 access to a centralized resource pool and visibility into resource availability - this can be a time-consuming process.
Sometimes your planning tools start out great. But as you grow, they grow unwieldy. More projects, more staff, more complexity. Otherwise-organized PMs find themselves in a constant state of reaction and 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.
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 resource is essential to keep every customer happy. Thankfully, resource management software can help, with drag-and-drop reassignments.
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.
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 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.
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 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 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 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.
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. It means you can get what you need, when you need it - no more, and no less. There are many different tools you can use, and each one has strengths and weaknesses that affect their suitability for your needs.
Runn is a full-suite resource management and financial forecasting software that helps software companies, digital agencies, and consultancies become more efficient and profitable. Check out the video below to learn more.
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:
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.
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.
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.
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:
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.
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.
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.
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.
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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