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What is Resource Management

What is Resource Management & Why is it Important?

Resource management has become an integral part of any organization today. It enables businesses to make maximum use of their resources and improve profitability.

But as businesses expand and take on multiple projects, keeping tabs on existing resources and filling gaps can be a challenge. Proactive and continuous resource management then becomes a necessity. When you take on a more strategic approach to resource management, you can improve outcomes, productivity, and profitability.

To help you better manage your resources, we explain:

  • What resource management is,
  • Key terms to know,
  • Top benefits,
  • How to create a resource management plan,
  • How to use resource planning software for better efficiency.

What is Resource Management?

Resource management is the practice of planning, scheduling, and allocating resources to a project or program. The primary goal for resource management is to use your available resources most effectively to achieve the most significant organizational value.

In short, resource management ensures that you have the right resources available at the right time for the right work.

A resource is anything needed to complete a task or project. Resources include people, money, time, facilities, consumables and materials, equipment and tools, and technology.

Resource management gives you an overview of demand and capacity and required skills for particular work versus the available skills. This is critical for project managers because they can optimize and allocate resources to the initiatives aligned with corporate strategy and bring the most value.

When you focus on resource management from the start of your projects, it will be easier to optimize efficiency throughout the project cycle.

Why Businesses Should Care about Effective Resource Management

In business, the more you can reduce waste, the higher your ROI.

Resource management is all about doing more with less through optimization and efficiency. Resource management allows you to identify what you need to make a project successful, enabling you to plan resources efficiently and avoid waste.

Resource management is also crucial for organizations working on multiple projects in ad-hoc environments. These organizations are exposed to changing variables such as project priorities, resource availability, and budget constraints. These constraints demand that managers stay informed all the time so that they can manage their resources diligently and finish the projects within budget and time. Therefore, these organizations need to invest in resource management solutions to enable managers to stay on top of things.

When a business is expanding or taking on new projects, the first thing it’s likely to do is increase resources. Sometimes, this may not be necessary. Resource management gives a project manager or hiring manager the data and insights they need about current resource availability, upcoming projects, and resource needs.

This then helps them decide whether they have enough resources to fulfill existing and upcoming needs, are over capacity, or whether there’s an immediate or projected need to hire more resources.

Resource Management Glossary: Key Terms to Know

There are key resource management terms that every resource manager should understand:

1. Allocation

Resource allocation is the process of assigning available resources to the appropriate tasks to achieve project deliverables and overall company goals. Allocation enables you to tackle projects using the resources you currently have in the most efficient way possible.

2. Scheduling

Resource scheduling involves identifying and allocating resources for a specific period to different activities. These activities could be billable, non-billable, business as usual (BAU), or unplanned work. Scheduling allows you to deploy competent resources to the right job, making it more possible to complete the project within budget and time.

3. Utilization

Resource utilization measures how effectively you’re using your resources. The process involves measuring the amount of time resources spend on different project tasks against their availability.

Resource utilization allows you to measure billable and non-billable utilization. Billable utilization is the amount of time your resources spend generating revenue. Non-billable utilization, on the other hand, is the time spent on general tasks that don’t generate revenue but are nonetheless crucial to an organization.

Essentially, you want your resources to spend more time on billable tasks. So it’s essential to know how your resources are utilizing their time so you can make improvements accordingly.

4. Forecasting

Resource forecasting is the process of predicting your future resource requirements before you start a project. For optimum forecasting, you must be highly familiar with the project lifecycle and objectives and have visibility of all available resources. Project management software gives you access to your projects and resources all in one place, giving you the visibility you need for forecasting.

5. Capacity planning

Resource planning involves balancing your available resources to meet your project capacity requirements. The process involves analyzing and bridging the capacity and demand gap well before the project begins. Capacity planning is important because it maximizes optimal utilization and timely project deliveries.

6. Leveling

According to The Project Management Body of Knowledge (PMBOK® Guide), resource leveling is:

“…a technique in which start and finish dates are adjusted based on resource constraints with the goal of balancing the demand for resources against available supply.”

Resource leveling in project management aims to identify underused or inefficiently used resources within the organization and use them to your advantage.

7. Reporting

Reporting involves providing actionable insights collected from extensive data analysis. These insights help in decision-making and allow managers to monitor the overall health of their projects.

8. Resource management software

Resource management software is a tool that enables organizations to optimize resources and utilization effectively and efficiently across their projects. This tool eliminates the need for time-consuming manual processes by automating resource tracking and management across projects.

Advantages of Effective Resource Management

Resource management is about more than allocating resources to a project. It plays a vital role in setting project expectations, optimizing workflows, and increasing project profitability and success. Other benefits include:

1. Delivering projects and on time

Effectively managing resources helps companies deliver projects on time more consistently. Managers have clear insight into what resources they already have and how much time they have to work on a new project. These insights can help managers improve timeline projections and plan resources accordingly for successful project delivery.

2. Cost-saving

Effective use of resources enables an organization to reduce waste and ensure maximum utilization of resources. Allocating the right resource to the right project enables projects to be delivered within time and budget. Resource management also allows managers to distribute essential resources across all projects instead of just high-priority projects, thereby controlling costs.

3. Increased billable resource utilization

Resource management gives you a clear overview of where your resources spend their time. In situations where a lot of time is spent on non-billable tasks, you’re able to see that and make changes accordingly. You’re then able to divert these resources to billable tasks.

4. Bridging the capacity vs. demand gap

Forecasting allows project managers to foresee which resources will be needed ahead of time. A manager can then assess and analyze the skills gap within the existing resources through effective capacity planning. Afterward, managers can proactively formulate an action plan to bridge the capacity vs. demand gap.

5. Optimized workflows

Resource management allows you to have better visual workflows that ensure the effective utilization of every resource. Visual workflows help see when one resource is being overworked, and another is being underworked. A well-optimized workflow increases productivity and employee retention. It also decreases the risk of project failure due to burnout or disengagement.

6. Improved productivity and employee morale

Nothing motivates an employee more than using their skills effectively. When you allocate your resources to projects where they are most useful, chances are you’ll have a highly productive team that enjoys what it does. By regularly monitoring skills and performances, managers can help resources improve and add more value to the organization.

7. Increased ROI

Proper utilization of available resources ensures that they’re invested in work that brings the highest return. You can allocate resources that generate revenue for the organization, improving its overall ROI.

8. Project transparency

Other teams can view what resources are available to you and plan accordingly if your team is at maximum capacity or available to take on new projects.

9. Empowers employees to grow professionally

Helping their employees professionally while the project needs are taken care of is at the center of project management for employee-centric businesses. When companies can manage their resources, they can allow their human resources to take on tasks they feel suit their skills best or upskill. Doing so will enable these resources to diversify their portfolio, hone their skills, and increase productivity.

10. Improved customer satisfaction

Nothing makes a customer happier than a business that keeps its promises and delivers high-quality products or services. Strategic resource management enables project managers to anticipate how long a project will take depending on current resource availability, historical performance, and additional resources. This helps provide more accurate project estimates and ensures a more consistent and predictable delivery on those estimates.

What is a Resource Plan?

A resource plan helps you organize, identify, and list all the resources you need to deliver a project successfully. A resource plan maps out the exact quantities of the resources required for each phase of the project and the time and cost implication of each resource. The resource management plan includes expected risks as well.

A good resource plan includes the following components:

  • All resources required to complete the project: This is everything and everyone that you need to complete a task. Can include people, machines, software, office space, money, etc. Take your time when compiling this list. The more comprehensive it is, the more accurate your resource plan is. It’s advisable to break down your resource requirements on a daily, weekly, and monthly rotation.
  • Human resources needed: This is arguably an essential resource for a project. Identify the number and type of human resources you need and their assigned roles and tasks for each project phase.
  • Resource quantity and cost: Include a cost estimate for each resource, when you will need it, and how much will be required.
  • Timeframes for each resource: Note the time needed for each resource. Include the number of working days, project deadlines and milestones, and holidays for each resource.
  • Risks and challenges: Take note of challenges and risks that you anticipate during the project lifecycle and how to mitigate them.

Critical Features of Resource Planning Software

Resource management software is a tool that simplifies resource planning and scheduling. The software automates the process, removing the need for tedious manual planning and scheduling processes.

This tool also allows you to forecast better, visualize resource gaps, and ensure you fill these gaps before projects start and optimize your project workflow for maximum productivity.

Resource planning software allows you to see, monitor, and source the resources you need to deliver projects successfully. This will enable you to effectively schedule, plan, and manage your resources, aligning them with the appropriate projects at the right time.

With this tool, you can automatically track individual resource skills and availability against the current projects. This allows you to see who is available when and for how long. You also get to understand gaps and dependencies ahead of time. This way, you’re able to address them before they cause issues.

Project managers also get instant visibility into who is doing what and when. This visibility enables them to optimize all resources without over or underutilizing anyone.

There are lots of resource planning software options in the market. To choose the best one for your project, consider these features:

1. Capacity forecasting

Resource planning software should give you visibility to the resources you currently have, upcoming demand, and potential conflicts for those same resources. This visibility allows you to forecast your future needs because you already know what you have, what you need, and what is missing.

2. Assign teams and track resources

The right software should make it easy to outline team assignments and the related resources necessary to execute tasks. A feature such as an interactive Gantt chart is perfect for assigning and tracking project resources to ensure that the project stays on budget and is delivered on time.

3. Timesheets to track team’s work

Timesheets are an excellent feature for automatically generating resource progress updates. They enable team members to quickly and accurately log their hours, enabling managers to see where time is spent. Time tracking streamlines the process and allows managers to forecast project timelines and deliverables more accurately.

4. Workload management

Resources need the right amount of workload for them to work productively. It’s, therefore, essential to have software that allows you to view workloads so that you reallocate resources as needed to make sure they’re not overburdened.

5. Live data collection

An online resource planning tool that collects live data can help project managers make better decisions. It’s also essential that your software offers project updates as and when they happen. Live updates help all stakeholders to stay on top of things.

6. Easy, flexible reports

Reporting capabilities allow managers to get insights into managing their resources effectively. Additionally, managers can easily share these reports with stakeholders for future decision-making.

7. Multiple projects management

If you have more than one project you’re managing at a time, a tool that brings all your projects into one place is ideal. You want a tool that can assign, track and report on all your projects. This allows you to stay on top of everything and ensures more efficiency.

Stages of a Resource Plan

There are four main stages involved in creating a resource plan:

1. Establish resources necessary

The first stage of a resource plan is determining the resources needed to achieve the project goals. These resources can be anything from labor to materials to equipment to facilities and more.

2. Get the right resources

Once you’ve established the resources you need, the next step is to assemble your team according to the skills and experience the project requires. Also, find the right equipment and secure contractors. You also develop team roles, procurement needs, contracts, budgets, and policies and procedures.

3. Manage your resources

Next, assign roles and responsibilities to your team and let everyone know who is doing what. Identify, define, investigate and analyze any issues that arise, solve, and then review.

4. Control your resources

Lastly, monitor how resources perform during project execution to ensure they’re delivering the expected results. In this stage, you measure how efficiently you’re using your resources. If the utilization rate is too low, take immediate action to maximize resource utilization.

How to Implement a Successful Resource Management Plan

You may have a solid resource management plan, but it won’t make any difference to your project management if you don’t implement it well. Here’s how to use your plan to manage resources as the project progresses:

1. List all your tasks

Begin by determining what needs to be done before figuring out who needs to do it. List down all the project tasks and add estimated start and end dates to each task.

2. Assign tasks

Once you know what needs to be done, assign those tasks to the relevant resources. Onboard everyone to the project and ensure that they know what they’re expected to do and when.

3. Manage work schedule calendars

Stay up-to-date on the hourly and daily availability of individual resources. Don’t forget to track their planned holidays and vacations as well so that you’re always aware of when resources are unavailable.

4. Track time

Sticking to project deadlines is crucial for every project manager. Track how your resources spend their time throughout the project to ensure project delivery within set timelines. Monitor the hours logged by your resources to make sure they’re adhering to the project plan, schedule, and budget. You can use timesheets to track the hours your team logs as they work.

5. Use a Gantt chart to monitor progress

Use a Gantt chart to track how much progress a specific task is making and whether it’s on track according to your plan. A Gantt chart will also give you an overview of the entire project’s progress, enabling you to make any necessary adjustments should you notice your project is falling behind.

6. Review workload allocation

As your project progresses, you must keep your resources balanced with your capacity, ensuring you have just what you need when you need it. Balance can only happen if you periodically review your resources’ workload to confirm that they’re not overworked or underworked throughout the project cycle. Monitoring workload continuously also allows you to reallocate the resources no longer in use for a particular project.

7. Monitor resource productivity

To get the most out of your resources, they must be engaged productively throughout the project. Use the reporting feature in your resource planning software to generate reports on resource allocation and individual resource progress.

Resource management is crucial for the success of any organization. However, resource management is not a ‘one size fits all’ process because every organization operates differently. Hence, every business needs a tailored resource management plan that suits their needs.

The concepts and tips mentioned above will help you formulate the right resource management strategy that suits your project management needs and keep your projects moving towards success, on time, and within budget.

If you’re looking to manage your resources more effectively, Mission Control has a variety of features that will help you organise, run and automate many of your tasks. Chat with our experts today.

Misson Control, your Project Management & PSA Command Center.

Take control of your projects & easily manage your team budgets & much more

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