Are you having difficulty ensuring the right resources are assigned to the right tasks?
Do you find it hard to keep track of resource costs and stay within the project budget?
Is it challenging to monitor and track resource utilization throughout the project lifecycle?
Project resource management is the strategic approach that empowers managers to navigate these challenges. It encompasses the allocation, utilization, and optimization of resources to achieve project objectives within specified constraints, ensuring successful delivery.
However, unforeseen circumstances can sometimes create a resource crunch that adversely affects project delivery.
What if key team members fall ill, take a sabbatical, or change jobs unexpectedly? Project managers must have a backup plan, ensuring that the remaining resources are not overloaded, disengaged, or unproductive in their tasks.
This article aims to cover the essential aspects of project resource management, including a step-by-step guide to creating an effective project resource plan.
But before delving deeper, let us begin with the project resource management definition:
What is Project Resource Management?
Project resource management involves estimating and allocating the right resources to the right opportunity and utilizing them efficiently for successful project delivery. It measures every team member’s productivity and helps you take proactive measures to maximize billable/strategic utilization.
Effective project resource planning provides a clear picture of who is doing what and how long they need to accomplish it. It helps you visualize underutilized resources or those getting rolled off from tasks and re-allocate them to suitable project vacancies.
Efficiently managing resources in project management also enables you to answer questions like:
Do I have sufficient resources to finish a job?
Or do I need to hire someone else?
How can I reduce project resource costs and complete the delivery?
Therefore, project resource management is a continuous process, and by implementing it, one can meet the overall objectives, improve the project outcomes, and boost ROI.
Now, let’s understand an example of project resource management.
Project Resource Management Example
An IT firm has a new mobile app development project in the pipeline. The project manager begins by creating a Work Breakdown Structure (WBS) and defines the tasks for each project phase, including:
- Requirement analysis
- App design
- Front-end development
- Back-end development
- Testing & deployment
- Post-deployment support
Next, the project manager develops a Resource Breakdown Structure (RBS) to forecast the resources required, which include:
- Five mobile developers proficient in Swift and Kotlin
- Two QA testers
- Two UI/UX designers skilled in Sketch
- Two DevOps engineers with Google Cloud Platform (GCP) expertise
Upon determining the requirements, the project manager submits resource requests for all these roles to the resource manager.
The resource manager then starts the resource identification and allocation process. They look into the internal resource database to identify suitable employees with the right competencies for each role. They also review the availability and capacity of these resources for the specified time frame. Once the required resources are identified, they are allocated to the project.
The project manager then assigns these resources to the appropriate project tasks based on their expertise, ensuring the project starts on time. As the project progresses, the manager tracks KPIs such as on-time task completion and budget adherence. They also optimize resource utilization to maintain productivity.
Thus, by proactively managing project resources and preparing for unforeseen challenges, the objectives are achieved on time and within quality standards, ensuring successful completion.
What is a Resource in Project Management?
Definition of Resources
In project management, resources are essential assets required to execute a project successfully. They include anything that contributes to the completion of project tasks and achieving project objectives. Resources are categorized into various types to ensure comprehensive planning and efficient utilization.
Types of Resources Used in Projects
Labor
Labor refers to the human workforce (part-time or full-time) and contingent staff involved in the project. This includes project managers, team members, contractors, consultants, and other personnel whose skills and efforts are needed to complete project activities.
Consumables & materials
Consumables and materials are items that are used up during the project. These include raw materials, supplies, and any items that are essential for producing deliverables but are not reusable. Examples include office supplies, fuel, construction materials, etc.
Equipment & tools
Equipment and tools are physical assets used to facilitate project tasks. These can range from simple hand tools to complex machinery and technology systems. It covers all the tangible assets (machinery, equipment, etc.) and intangible assets (software, processes, methods, and ideas).
Facilities
Facilities are the physical locations where project activities are carried out. This includes land, conference rooms, office space, accommodation, storage facilities, workshops, manufacturing plants, and other infrastructure needed to support the project.
Finance
Financial resources encompass the budget and funding necessary to finance all project activities. This includes costs for labor, materials, equipment, software, and any other expenses. It covers direct costs like salaries and material procurement and indirect costs such as administrative fees and overheads.
Knowing the essential types of required resources in project management, let’s understand the significance of managing resources in projects.
Importance of Project Resource Management
As a project manager, your primary concern is: How do I deliver a project on time and within the stipulated budget?
An effective project resource management strategy improves the team’s performance, engagement, and productivity. It also aims to meet delivery commitments and enhance client satisfaction.
Let’s understand the benefits in detail.
Reduces Project Resource Costs
An effective resource management process provides complete visibility of the workforce across the enterprise. This helps them leverage local and global resources from low-cost locations. As a result, managers can substantially reduce project resourcing costs without compromising quality. It also helps avoid deploying under-skilled or over-skilled resources in a project.
Read more: 5 ways to Reduce Project Management Costs
Helps Create Accurate Resource Estimates
Accurate resource estimates are essential for effective project planning and budgeting. By thoroughly analyzing project requirements, managers can make precise estimates regarding the type, quantity, and quality of resources needed to start the project. This leads to more realistic project plans and prevents the risk of resource shortages or excesses during project execution.
Ensures Competent Resource Scheduling
As mentioned above, an effective project resource management plan equips project managers with a comprehensive view of resources. This allows them to get a clear picture of key attributes like skillsets and employee preferences, their schedules and availability, etc. As a result, they can ensure competent resource scheduling and improve productivity.
Maximizes Profitable Utilization
Project managers can forecast and improve billable and strategic resource utilization and ensure that all resources are used to their full potential without being overworked. This helps balance the workload, prevent burnout, and maintain productivity. It also leads to better project performance and higher profitability as resources are effectively used to generate maximum value.
Read more: How to Track Resource Utilization?
Addresses Resource Constraints Effectively
Resource constraints, such as limited availability of skilled personnel or critical equipment, can significantly impact project progress. Effective resource management involves identifying these constraints early and developing strategies to mitigate them. This can include cross-training employees, outsourcing tasks, or adjusting project timelines to ensure smooth execution.
Enables Timely Delivery of Projects
Effective resource management ensures that resources are available and scheduled appropriately, reducing delays and ensuring project milestones are met. By managing resources efficiently, project managers can ensure that projects are completed on time, enhancing client satisfaction and ROI.
Now, let’s understand the six distinct project and resource management processes.
Six Project Resource Management Processes as Per PMBOK
The Project Management Book of Knowledge (PMBOK) defines project resource management as a knowledge area that involves managing resources efficiently to deliver projects successfully.
It includes six project resource management processes, namely:
Plan Resource Management
Before the onset of a project, it is essential to create a comprehensive plan that clearly defines the resource requirements. This includes identifying the type and number of resources needed to meet the deliverables. It also determines the approach you will use to manage resources throughout the project lifecycle. Moreover, the project resource management plan outlines the job descriptions of various resources based on their skills and expertise levels. It will also define the guidelines for creating and maintaining project documents such as team charter, WBS, RBS, etc.
Estimate Activity Resources
The next step is determining the resources required to carry out various activities in a project. So, selection criteria, such as qualification, experience, and cost, are defined apart from the type and number. Some primary techniques managers can use in resource estimation are Analogous, Parametric, and Three Point. Furthermore, evaluating resource requirements at this stage helps businesses identify resource bottlenecks and create contingency plans accordingly.
Acquire Resources
After estimating the project resource demands, managers can leverage internal measures, such as booking similar-skilled benched personnel or pre-booking the ones scheduled for release from ongoing projects. Resource managers can also track the projects reaching the closure/maintenance phase and negotiate with respective project managers to release requisite critical resources. They can also use external resourcing measures, such as hiring a permanent or contingent workforce. For non-human resources like tools, materials, and equipment, managers can create a procurement management plan to help ensure their consistent supply.
Develop Team
Once you have acquired the resources, you must ensure they are skilled and trained to meet deliverables. It applies to human resources who seek career development opportunities and enrich their work experience. This process helps enhance teams’ overall performance and improves interpersonal skills of resources, productivity, etc. In addition, providing regular feedback on progress, pinpointing areas of improvement, and recognizing and rewarding team members’ good work can motivate the team members to perform better.
Manage Team
Project teams play a crucial role in the success of projects or organizations. The project team assignments may alter as and when the team members learn different tasks or new skills. Therefore, project managers regularly need to track and measure employee performance, and any issues in the project need to be dealt with appropriately by the team members. The process involves change requests, procurement management plan updates, project document updates, etc.
Control Resources
Project scope and client requirements can change anytime during the project lifecycle. Therefore, continuous monitoring and controlling procedures ensure that you have a skilled workforce ready to take up future work. This process ensures that the right resources are assigned to suitable projects at the right time and cost and released when the project ends. Additionally, it helps managers monitor the forecast vs. actual resource utilization and take corrective measures to prevent projects from derailing.
Next, let’s understand the significant challenges in project resource management.
Challenges in Project Resource Management
Planning, allocating, monitoring, and implementing control measures for successful delivery can be challenging without the right tools. Furthermore, changes in project scope, client requirements, and demand can snowball and affect resource supply.
Some of the significant challenges of managing resources in project management are:
Inaccurate Project Resource Estimation
Without proper tools and techniques, organizations rely on approximation and guesswork to forecast and estimate project resource requirements. This practice often leads to inaccurate estimations. When resources are underestimated, project teams may find themselves overburdened, resulting in stress and reduced productivity.
Conversely, overestimating resources can lead to excess team members being idle, which can cause billable losses. Thus, improper resource estimation can lead to project delays and budget overruns, resulting in client dissatisfaction.
Read more: Understanding Resource Availability within Project Management
Unorganized Resource Requisition Workflow
Organizations that rely on manual resource requisition fail to track project resource requests effectively. In such a scenario, resource managers work on a ‘first-come, first-served’ basis for allocations and sometimes assign resources to low-value projects, leaving critical projects inadequately staffed.
Further, multiple requests via disparate channels, like emails, calls, messages, etc., cause communication silos between the resource and project manager. Consequently, resource managers may allocate the same resources to multiple projects for the same timeline, leading to scheduling conflicts and double bookings.
Incompetent Resource Allocation
Allocating suitable resources to the right task is critical for successful project delivery. However, if organizations rely on spreadsheets and home-grown solutions to allocate resources, it creates silos of data and doesn’t provide real-time updates. It becomes challenging for managers to assess which resource is working on what tasks, thereby leading to scheduling conflicts such as overallocation and resource unavailability.
Additionally, outdated legacy tools lack the mechanism to capture, track, and update resource skills and competencies. This makes it difficult for managers to identify and assign the best-fit personnel to every project task. Such instances of skill mismatches can lead to project budget escalation and sub-par deliverable quality.
Read More: What is Resource Allocation? A Comprehensive Guide for Project Success
Sub-Optimal Utilization of Project Resources
One of the biggest challenges of project resource management is maximizing billable or strategic utilization without overloading the resources. Often, project managers assign more tasks to a few employees because they have been counted upon in the past to deliver results.
This overloading can lead to stress and burnout and build animosity among team members. Furthermore, it can lead to delays and budget overruns, and other projects also suffer due to essential resources’ unavailability. On the other hand, underutilization of resources can cause disengagement and lower productivity. Both instances lead to poor project outcomes.
Sudden Ramp-Up & Ramp-Down of Resources
Managing the sudden ramp-up/ramp-down of resources presents a significant challenge in project resource management. Ramp-ups occur when project demands unexpectedly escalate, requiring quick mobilization of additional resources to meet deadlines.
Conversely, ramp-downs happen when project activities are done, leading to the release of resources. They end up on the bench, which reduces their billability and lowers their morale. Failure to manage these demand fluctuations can lead to last-minute firefighting, increased bench size, and revenue losses.
Disconnect between sales and delivery team
In a project-based business, miscommunication between the sales and delivery teams can spiral down your projects, resulting in low client satisfaction. Once the sales team wins an opportunity, the delivery team takes ownership and is responsible for adhering to the commitment.
However, while achieving the sales targets, the sales team sometimes fails to involve the delivery team before signing the deal and understanding whether there are sufficient personnel to undertake the project. As a result, the delivery team struggles with eleventh-hour resource allocations to meet the deliverables.
Now that we understand the various challenges let’s learn about the best practices to develop a robust project resource management plan.
Best Practices to Create an Effective Project Resource Management Plan
Here are the essential steps to formulate a resource management plan:
Select an Appropriate Resource Management Solution
Organizations must implement a modern resource management solution to manage the project workforce effectively. The tool must provide advanced features such as forecasting, capacity planning, resource scheduling, competency matrix, utilization tracking, real-time BI reports, etc.
Besides, the project resource management tool should offer centralized visibility into resource-related information so that firms can easily identify and allocate the right resources to the right project tasks.
Create a Resource Breakdown Structure
Formulating a Resource Breakdown Structure (RBS) allows project managers to list all the resources required to execute the project successfully. They break down the resource requirement by function and type.
This detailed breakdown provides a clear overview of what is needed at each stage of the project’s development lifecycle. It also helps identify potential resource gaps early in the planning phase, allowing for proactive measures to secure additional resources if necessary.
Read more: What is Resource Planning and Why is it Important?
Hire or Retrain Resources as Needed
Managers should perform a capacity vs. demand gap analysis to assess resource excess/shortage periodically. Accordingly, they can make resourcing decisions to bridge the gap. Managers can hire additional resources to address shortages and ensure project continuity.
On the other hand, they can retrain/upskill existing resources to maximize skill utilization and adaptability. This ensures the project team is equipped with the requisite competencies and can meet the deliverables.
Optimize Project Resources as Appropriate
Managers can implement resource optimization techniques to prevent the risk of disengagement and burnout. Resource smoothing ensures a consistent workload for the project team by adjusting the start and end dates of tasks based on their availability.
Conversely, the resource leveling technique adjusts the float tasks and redistributes the workload or adds extra personnel without affecting the critical path. These optimization strategies enhance team engagement and contribute to overall project success.
Review & Update the Project Resource Plan Regularly
Regularly reviewing and updating the project resource plan is a critical aspect of effective project management. This practice ensures that the project remains on track and that resources are optimally utilized throughout the project.
Moreover, regular reviews of the resource plan enable project managers to adjust as necessary based on evolving project needs. It also provides a clear understanding of resource availability and distribution, fostering collaboration and accountability across the project lifecycle.
Use Resource Data from Past Similar Projects
Utilizing resource data from past similar projects provides valuable insights into resource utilization patterns, performance metrics, and best practices. By analyzing historical data and lessons learned reports, managers can make informed decisions regarding resource allocation, budgeting, and other parameters.
Moreover, by identifying successful strategies and avoiding pitfalls encountered previously, project teams can streamline workflows and optimize various resource workflows.
Seek Approval from Project Stakeholders
Seeking approval from project stakeholders is crucial to ensure alignment with project objectives and requirements. This process involves presenting project plans, resource allocations, and budget proposals to stakeholders for review and approval.
By engaging stakeholders early and obtaining their buy-in, project managers can secure necessary support, validate project feasibility, and mitigate potential risks. Further, clear communication and collaboration with stakeholders facilitate informed decision-making and drive project success.
Read more: A Cheatsheet to achieve a Project Manager’s career goals & objectives
Conclusion
Resources are the lifeline of a business; therefore, it is crucial to manage them intelligently. Project resource management helps unleash the workforce’s true potential, improves productivity, and ensures that projects are completed seamlessly, improving profitability.
The Glossary
Read More: Glossary of Resource Workforce Planning, Scheduling and Management
SAVIOM Solution
SAVIOM is the market leader in offering the most powerful and configurable solution for managing your enterprise resources effectively and efficiently. With over 20 years of experience, this Australian-based MNC has created its global presence across 50 countries and helped over 100 customers achieve their business goals. SAVIOM also has products for project portfolio management, professional service automation, and workforce planning software that is customizable as per business requirements.
