Salesforce Project Management Software by Aprika

Resource Utilization and 5 Ways to Maximize it within your Organization

Resource Utilization - Salesforce Project Management Software

What’s a business without resources? Not much. But, having access to resources isn’t a direct ticket to attaining your business goals. The secret lies in allocating and utilizing these resources in the most efficient way to bring maximum value to the business. We understand that resource utilization and allocation may not always be your strongest suit—it’s not for most businesses.

However, to reach your goals and have a competitive edge in your market, you must learn how to improve resource allocation and utilization rates for your business.

To help you get started, we’ve put together the key information you need including:

  • What resource allocation and utilization are,
  • How the two impact your business,
  • Best practices to improve resource utilization, and
  • The best technology to use.
  • Let’s dive in!

    What is Resource Allocation and Utilization?

    In project management, the two key resources-related phrases we use are “resource allocation” and resource utilization”.

    Despite sounding similar, resource allocation and resource utilization are two different things. They’re both equally important to the effectiveness and efficiency of your projects and operations.

    Resource allocation is the process of assigning resources appropriately in order to achieve certain deliverables and overall company goals. As the project manager, it’s important to keep an eye on how the resources assigned perform as the project progresses and reshuffle them whenever necessary.

    On the other hand, resource utilization is the process of measuring how effectively your company is making use of all available resources. Resource utilization rates show how much of your resources are being spent on billable tasks. Tracking utilization can also be helpful for measuring productivity.

    How Does Effective Resource Utilization Impact Your Business?

    So why should you care about resource utilization within your business? For good and bad reasons.

    Ineffective utilization can create business challenges and even lead to losses. It’s also important to be aware of why paying attention to your resource utilization can be beneficial for the business and ultimately lead to better profits.

    Challenges of ineffective resource utilization

    First, let’s discuss the challenges.

    For a business to thrive, it must have the right resources at its disposal. However, it isn’t enough to just have resources, you must ensure that they’re utilized where they bring the most value. Ineffective or suboptimal resource utilization can lead to poor productivity, project delays, decreased quality, increased costs, missed opportunities, and low morale.

    Failing to make the most of your resources could easily hamper the ability to deliver on projects as promised. And when this happens, you’ll certainly have unhappy clients and this could quickly destroy your company’s reputation and affect your revenue.

    Benefits of effective capacity management

    On the other hand, effective resource utilization will enable your organization to:

    • Improve your ROI: Proper utilization of your available resources ensures that they’re invested in productive work. You’re able to ensure that you focus your resources on work that brings the most returns. In return, they generate revenue for the company thereby improving your RO.
    • Plan your project resources better: Real-time visibility of resource utilization enables project managers to better monitor resource performance. This allows you to know which resource is better utilized in specific projects hence enabling you to plan your resources better.
    • Forecast future requirements better: Tracking your utilization will enable you to better forecast resource requirements in the future. Take cues from how you’re utilizing resources for current projects and use the learnings to predict and plan for future projects.
    • 5 Strategies to Improve Your Business’ Resource Utilization

      According to Gartner analyst Robert Handler, the best utilization rate is between 70-80%. Why not 100% you ask?

      If your resources are spending more than 80% of their time on billable tasks, there’s a high likelihood they’re less productive than they need be. Ultimately this costs your company time and money. Therefore, project managers, must ensure resources are utilized in the most essential activities instead of mundane ones.

      So how do you maximize the utilization rate without draining your resources? Here are five best practices that will help you achieve this:

      1. Take stock of your resources

      To start with, take stock of all internal and external resources available and assess their ability to meet your business’s needs. Consider the capabilities of each resource. When reviewing your human resources, assess their levels of experience and training.

      Taking stock of your resources gives you a clear picture of any gaps in how they’re being utilized. Additionally, it may reveal opportunities to leverage the higher-level capabilities of your resources—something you may have previously missed.

      Finding and keeping track of all this information manually can be difficult. Mission Control makes it easier for you to track this data and make decisions based on it. For example, the Role Utilization feature gives you a clear overview of how your human resources are performing. You can see how many hours each resource is meant to work per week and compare it to the total hours logged for that week.

      2. Choose the best utilization methodologies

      Now that you know what resources you have and where they are most useful, you need to decide the kind of methodology you’ll use to ensure they prioritize strategic work.

      Popular project management methodologies include Agile, Scrum, Kanban, Stage-Gate and more. Each methodology serves a different purpose, so it’s important to choose one that can help you effectively monitor resource utilization.

      You may want to choose a methodology that allows you to monitor unplanned work especially when it comes to your human resources. Unplanned work can easily steal from your resource capacity and create bottlenecks that hold back the progress of the project.

      For example, if you were to choose Kanban and create a Kanban board it would be very helpful for getting a visual overview of your project and how your resources are being used. You’d have a clear picture of staff workload and the flow of work throughout the project.

      This would be useful for better resource allocation and capturing when certain resources are overcommitted. You don’t want to overwork your resources otherwise you’ll have quality problems and a reduction in overall output.

      A project management tool can be very helpful for adopting a project management methodology and making the most of it for resource utilization. Whether it’s Kanban or Scrum or anything in between, Mission Control can be customized to suit your needs.

      3. Plan your project

      When it comes to being efficient, planning is important. It allows you to align projects and resources to the strategic outcomes they are meant to support. When planning your project, identify resources that you’re likely to need for the completion of the project. Then, have an estimate of the time each resource needs and its role in the completion of a particular task.

      Generating a project plan for a new project can eat into your valuable time. Mission Control’s Project Generation tool has been created to completely streamline project planning. You can quickly launch a new project and include related milestones, actions, checklist items, contributors, etc. You can also automatically generate project plans from previously created templates making your project planning a breeze.

      4. Track and report time

      Having identified which resources you need to complete the project and determined the time required, next you need to track your resources. Unfortunately, many companies skip this important step. HubSpot’s Marketing Agency Growth Report found that only 58% of agencies were tracking their team’s utilization rates.

      Time tracking allows you to get a better view of how resources are performing and identify gaps and available opportunities. It also enables you to generate reports on billable and non-billable hours, which will help you know if you are efficiently or effectively leveraging your resources. Understanding how resources utilize their billable time can give your business a sustainable competitive advantage.

      When it comes to tracking your human resource time, keep in mind that not everyone will be immediately receptive to time reporting. Keep things simple and easy. Start with an uncomplicated time tracking tool—like the one built into Mission Control. It’s straightforward and will help ease the adoption of time tracking. It will also make generating timesheets easier (you can actually automate this process!).

      5. Keep improving

      Don’t go too hard on yourself if things don’t go well at first. Realize resource management is an ongoing process that requires continuous improvement. No matter how well you plan a project, things change. Unexpected events and changes can easily affect your resource utilization system. Don’t fret, simply go back to the drawing board and refocus your resources based on your immediate priorities.

      How Technology Can Assist with Resource Utilization

      Managing your resources proactively is vital to improving business performance. Project managers have an important role to play in optimizing resource allocation and utilization.

      When equipped with the right tools, project managers can tell the type and amount of resources available. They can in return focus on efficient allocation and usage of resources thereby reducing wastage.

      Whether you are just getting started or looking to improve your resource management system, Mission Control can help with a data-driven project management solution.

      Efficient resource utilization requires proper project planning. Use Mission Control’s Project Generation tool to streamline your project planning and increase efficiency. Once you kick off your project, use the Resource Utilization feature to monitor your resources in real-time. You can view how well resources are being utilized by comparing scheduled billing hours and actual billable hours used.

      Request a demo for a real-time view of how Mission Control can help you utilize your resources and increase your ROI.



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