Knowing how to manage and distribute employees, time, money, and other resources to bring the most value to the organization is the most critical part of project management. Resource planning and management are about using all your resources in an empowering and efficient way.
In this guide, learn what resource planning and management is, why it’s essential, and why resource management software is necessary for 2022.
What is Resource Planning and Management?
Resource planning and management is the process of identifying, scheduling, and allocating resources to optimize time and budgets and keep projects on track without overbooking them. It helps you distribute resources where they are needed most to have a clear idea of who is doing what, when, and where.
Resources are people, equipment, place, money, or anything else you need to bring a project to successful completion.
Effective resource planning ensures that resources are allocated tasks based on their capacity and skillsets. Strategic resource allocation maintains harmony between resources instead of competing with one another.
Project managers can see which resources are overworked or under-utilized. This visibility maximizes efficiency by increasing resource utilization rates, helping project managers track capacity, and monitor progress. These efforts keep work on track and projects on budget.
At its core, resource management and planning is about balancing cost, scope, and time so that resources can smoothly complete projects on time and within budget without compromising quality.
There are five major components of resource planning and management:
- Scheduling: Resource scheduling in project management is the process of identifying and allocating your available resources to different tasks in a project. You can allocate resources either short-term or for the entire duration of the project.
- Utilization: Resource utilization is a key performance indicator for a project. It refers to the capacity of a resource utilized for a project task against its availability. In short, how much time a resource spends on a project task compared to the total number of man-hours the resource is available.
- Forecasting: Resource managers should be able to predict the kind of resources projects in the pipeline will require. Prediction is only possible through effective forecasting. Forecasting helps managers anticipate additional capacity that they need for projects and any under-utilization of resources that may occur in the future.
- Capacity planning: Resource capacity planning is a critical component of the resource planning process. It analyzes the demand for resources versus their availability. The goal is to minimize the gap between capacity and demand before projects commence.
- Reporting: The final resource planning component is analyzing data to find actionable insights that managers can use to improve future projects. Once you analyze data, you can generate reports and use them to enhance your decision-making abilities.
Steps in Resource Management Planning
There are four steps a project manager needs to follow for effective resource planning:
1. Determine the necessary resources
The first step in resource planning is determining the resources necessary to complete specific projects. These resources include labor, facilities, equipment, materials, and anything else you need to bring a project to successful completion. Here, you map out the number of resources you need, the skills and experience necessary, and the availability you need from each resource.
2. Acquire those resources
After determining the resources required, the next step is to acquire them. Build a team with the skills and experience the project needs. Ensure team roles are developed and assigned to each member. Also, find the right equipment and procure contractors. Additionally, develop procurement policies and procedures, contracts, and budgets.
3. Manage your resources
The third step involves determining how to allocate resources best and minimize resource conflicts by eliminating overlapping roles and tasks. You’ll need to assign roles and responsibilities to your team and communicate this to everyone to know who is doing what.
Additionally, you must ensure that tools and equipment are used efficiently and returned in a condition that includes normal wear and tear. Project managers must also ensure that teams maintain facilities in good condition to avoid significant damage payments that could add to the project costs.
4. Control how you use your resources
The last step involves the continuous review of how resources perform as the project progresses. This step is crucial because it ensures that resources deliver the expected results. Resource performance review should involve calculating the utilization rate, which measures how efficiently the resources are used.
Utilization Rate = the number of billable hours / the total working hours
Should you realize that your utilization rate is too low, take immediate action to ensure that your resources are being used efficiently.
The Benefits of Effective Resource Planning in 2022
Resource planning goes beyond allocating resources to a project. Here are more benefits your business can get from effective resource planning:
1. Improved project delivery
Projects, where managers manage resources strategically, tend to be more successful. Resource planning and management reduce costs and increase margins while meeting your customer’s expectations.
2. Match capacity to demand
By planning and managing your resources, managers can identify resource excess or shortage by comparing the resource demand against the existing capacity. Based on this data, managers can implement measures to bridge the capacity and demand gap, such as hiring more resources or upskilling existing ones.
3. Predict resource needs for future projects
Creating more projects in the pipeline is desirable for every business. But without enough or the right resources to execute these projects, there’ll be bottlenecks, delays in meeting deadlines, and poor quality. Proper resource planning helps managers forecast and predict all resource needs for pipeline projects in advance. This allows them to prepare to meet these needs before taking on new projects.
4. Efficient distribution of resources
Resource allocation affects business performance. Optimal resource distribution is key to the success of any organization. Through effective resource allocation, a company can ensure that they’re only using the resources that will dedicate effort to its strategic plans.
5. Better project visibility
A powerful resource planning strategy gives project managers and teams an overview of each task in a project. They’re also able to see how tasks and projects are progressing and track the efficiency of their resources. This visibility helps the manager to make strategic decisions and plan and manage resources according to project needs.
6. Minimize miscommunication
Miscommunication can be costly. Unfortunately, any organization or team is likely to have miscommunication and conflict at some point. However, employing resource planning practices in your projects can help everyone know who’s responsible for handling different parts of a specific process. This transparency eliminates ambiguity about who’s supposed to do what and who’s responsible for specific KPIs.
7. Increased productivity and output
When resource managers follow the best resource management and planning practices, it will enhance productivity, project performance, and overall profitability.
The benchmark for successful project delivery is meeting project deadlines and avoiding budget overruns. Resource management and planning helps managers periodically review project performance to ensure it’s on track. Regular monitoring will ultimately lead to completing projects within budget and on time.
9. Enhanced ROI
Every project manager aspires to enhance a project’s ROI. You can increase overall profits with effective resource planning and management. The efficiency reduces costs, improves product quality, and encourages repeat business from a satisfied client, thereby increasing ROI.
10. Improved employee morale
Resource planning sees to it that resources use their skills effectively. They get to do what they are skilled at or are interested in. This flexibility keeps morale high, and the business is likely to get better output. Managers can also identify where there are skills gaps and thus offer training and improvement so that they can add more value to the organization.
11. Improved billable resource utilization
Proper resource management gives you visibility into how resources are utilizing their time. You want your resources to spend more time on billable tasks than non-billable ones. It’s the billable hours that bring more revenue and add to its bottom line.
12. Streamlined workflows
For projects to progress smoothly, you need streamlined workflows. When you manage your resources efficiently, you avoid scenarios where some resources are overworked and others are underworked.
13. Improved transparency
With resource management, there’s transparency across the entire organization. Other teams and departments can view what resources are available to all project managers and plan accordingly. They can see when specific resources are available to take on new projects or about to be open.
14. Better decision-making
Strategic resource planning gives you visibility into your organization’s resources, schedule, and availability. This visibility helps you make better decisions about fundamental aspects of your business, such as whether to take on new projects,
15. Improved customer satisfaction
When teams can deliver high-quality products or services within the agreed timeframe and budget, the business wins its clients’ admiration and even loyalty. Strategic resource planning allows project managers to anticipate how long a project might take by considering current resource capacity and past performance. With this information at hand, they can offer clients more accurate project estimates and increase the chances of consistently delivering on those estimates.
The Different Types of Resource Management
The following are common types of resource management:
Human resource management
Human resource is probably the single most critical resource in a project. Human resource or labor refers to the people working on various project tasks. When it comes to human resource management, the process involves hiring the right personnel, onboarding new staff, reassigning employees, training people, performance tracking, firing staff, and more. Considering how vital people are to projects, getting these things right is indispensable for an effective resource management process.
Project resource management
Projects can range from simple single projects to multiple complex ones that involve many moving parts. That’s why resource management is essential to ensure that all the details move smoothly because they have enough resources and at the right times.
Digital resource management
Digital resources include documents, books, websites, software, information databases, architectural plans, and more. These resources can quickly get out of hand when different team members use various software and asset services. By managing a project’s digital resources, a project manager can ensure that teams are using these resources efficiently. Managers can also stay aware of what digital assets they possess and can quickly audit them when needed.
Natural resource management
Natural resource management involves managing land, water, trees, soil, plants, animals, and other natural resources for sustainability.
Project managers must manage financial assets and liabilities to prevent budget overruns.
Facilities are the environment where projects take place. They could be office space, meeting room, land, construction site, recording studio, and more. These also need to be managed to ensure the environment is conducive.
Inventory management involves controlling and optimizing inventory. Inventory is the current assets expected to be sold by a company.
Infrastructure, including structures, equipment, basic facilities, and technologies, must be managed well. This type of management ensures efficient deployment, operation, and infrastructure maintenance.
Best Practices in Resource Management
Follow these best practices to improve your resource management process:
1. Understand project requirements from the start
Understand as much as possible about the project before you even get your resource management system going. To allocate resources to a project effectively, you need to be aware of the customer’s expectations, timeline, budget, success criteria, and more.
2. Plan strategically
The planning phase is very crucial for every project. Failure to plan will lead to poor decisions, inaccurate estimates, and lack of visibility leading to a failed project. During the planning stage, make sure that you select the right resources, identify resource dependencies, and create a realistic timeline for the project.
3. Pay attention to your limited resources
In most cases, 80% of the productivity in a project comes from 20% of the resources. To prevent delays and bottlenecks, place more attention on the resources that are in short supply and plan around their availability.
4. Prioritize tasks objectively
Identify an objective process that you can use to highlight tasks as a priority. All project management team members should agree upon and understand this process. Don’t forget to identify unplanned tasks that can cause project delays by encroaching upon your capacity.
5. Leave room for change
Initial project resource management starts with creating a resource capacity plan. While a manager aspires to stick to this plan, circumstances may change mid-project that demand changing the plan. Don’t be rigid; instead, adapt to change.
6. Implement a companywide resource management methodology
In an organization with multiple projects involving multiple teams within the same organization, it’s best to adopt a unique methodology that aligns with everyone across the organization.
7. Improve project communication
Open and transparent communication is vital to the success of a project. Open communication enables all stakeholders to feel like part of the project. Ensure that every member has access to all the project-related information to improve communication within the team.
8. Track time
Time tracking is critical because it allows managers to see where resources spend project time. You want to ensure that resources focus on work that brings the most ROI.
Keep in mind that not everyone will embrace time tracking immediately, so keep things simple and easy (especially initially). Go a step further and use a straightforward tracking time tool that will be easy for everyone to use.
9. Account for non-project time
While allocating tasks to resources, ensure that you account for administrative time, paid time off, and other business as usual tasks that are non-billable.
10. Keep valuable resources happy
You don’t want high turnover, especially if it involves your best resources. Offer incentives such as training programs and don’t over-utilize them to encourage them to stay.
11. Build a risk management team
Even with the best-laid plan and implementation, unexpected issues may affect your project. A risk management team could handle such unforeseen risks. The team’s primary responsibility is to effectively monitor and control the emerging risks in the project life cycle.
12. Use a resource scheduling tool
Resource scheduling tools like Mission Control are now very common in project management. These solutions offer great features to help project managers schedule their resources efficiently.
How Mission Control Can Support Your Resource Management Strategy in 2022
A dedicated resource planning tool, like Mission Control, is way more convenient than organizing budgets and schedules in a spreadsheet, calendar, whiteboard, or even paper. It also sets your team up for success by conveniently scheduling their time accurately.
Resource management software is a tool that allows you to plan, schedule, allocate, and shuffle resources as needed and with much ease.
Spreadsheets and whiteboards might work with small teams. Still, as projects scale in size and complexity, they become laborious, time-consuming, and prone to errors, hence the convenience of resource planning software.
A dedicated resource management tool gives you a single source of truth, ensuring projects move seamlessly between different teams and departments. The software will also store project and client details in one place so that anyone involved has visibility into progress.
Mission Control is a project management software offering multiple features that make project management more manageable and effective. Along with its various other components, Mission Control provides resource planning tools to help you allocate resources for the project.
From Mission Control’s LaunchPad, you can filter your schedule by skills, showing who has the skills required and is available for the work. This 360-degree view of resource availability will be critical when making important business decisions like taking up future projects.
Now and then, resources may be unavailable for assigned work due to unforeseen circumstances. Project managers can account for such unforeseen pivots and ensure they don’t affect schedules and cause delays with a resource planning tool. On Mission Control, you can drag and drop bookings as needed when a resource’s availability changes.
Most importantly, Mission Control will keep every team member on the same page via the Kanban board. They will know what projects they’re working on, when they need to be finished and what the overall project pipeline looks like. The Kanban also makes time tracking easier because team members can log their billable and non-billable hours. Then you can generate timesheets to see how everyone is utilizing their time.
Proper resource planning, allocation, and keeping track of your plan along the way will ensure optimal resource utilization and project delivery at an acceptable cost and with timely delivery. Optimal resource planning and management can be hassle-free if you take advantage of automation. Project automation tools give project managers the right insights when they need them and minimize time spent on administrative work.
If you’re looking to manage your resources more effectively, Mission Control PSA has a variety of features that will help you organise, run and automate many of your tasks. Chat with our experts today.