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Resource Management

Business Dictionary defines Resource Management as "the process of using a company's resources in the most efficient way possible. These resources can include tangible resources such as goods and equipment, financial resources, and labor resources such as employees. Resource management can include ideas such as making sure one has enough physical resources for one's business, but not an overabundance so that products won't get used, or making sure that people are assigned to tasks that will keep them busy and not have too much downtime.[1]


In the realm of project management, processes, techniques and philosophies as to the best approach for allocating resources have been developed. These include discussions on functional vs. cross-functional resource allocation as well as processes espoused by organizations like the Project Management Institute (PMI) through their Project Management Body of Knowledge (PMBOK) methodology of project management. Resource management is a key element to activity resource estimating and project human resource management. Both are essential components of a comprehensive project management plan to execute and monitor a project successfully. As is the case with the larger discipline of project management, there are resource management software tools available that automate and assist the process of resource allocation to projects and portfolio resource transparency including supply and demand of resources. The goal of these tools typically is to ensure that:
(i) there are employees within our organization with required specific skill set and desired profile required for a project,
(ii) decide the number and skill sets of new employees to hire, and
(iii) allocate the workforce to various projects. Within professional services and consulting organizations, the effectiveness of these tools and processes is typically monitored by measuring billable utilization rate.[2]


When used in reference to project management, resource management often applies to resource leveling and smoothing. Resource leveling is designed to avoid shortages or excess inventory by keeping the stock of resources at a level that avoids both problems. Specialized software can help determine that level. It’s also used in references to the time it takes to complete a project. With leveling, the start and finish dates are adjusted so that they mesh with resource availability. Leveling might extend the project timeline. Resource smoothing is a scheduling technique that attempts to meet a specified deadline while avoiding peaks and valleys on the resources. The goal is a constant use of resources over time. At its simplest level for small businesses, resource management is about making sure that a company is using its talents and materials wisely and effectively. While it is often used in reference to project management, it applies to many other areas of business management. A small business, in particular, will pay attention to resource management in a number of areas, including:

  • Finances – Can it meet current expenses or afford to invest in new equipment or staff training?
  • Staffing – Does it have the right people for the work at hand? Will it need to hire if it gets that new client and if so, what skills will those people need to have?
  • Physical space – Is the company’s office or manufacturing space configured so that other resources can be managed for maximum efficiency?
  • Equipment – Does it have the tools needed to do what’s required?
  • Technology – What does the business need to succeed and should financial resources be reallocated to fund what’s missing?[3]


The Importance of Resource Management[4]
Resources can be of different types, such as people, materials, equipment and other supplies. For instance, in a software development project, you will need programmers, software engineers, system analysts, office staffs, as well as a convenient office place, computers with high configuration, internet facilities etc. The project manager must ensure about the availability of these resources. In some cases, the project manager identifies that the project is heading in a wrong direction. Deadline is approaching very fast, available budget is getting exhausted; however more than 50% of project activities are still unfinished. In this moment of severity, the project manager has two options; he has to make arrangements for the appropriate training for the team members to enhance their capabilities, or he needs to hire skilled personnel. Promptness in decision making is largely required in this case for the project manager. Again, choosing right people for the right job is not a very simple task. The project manager must have the capability to determine the appropriate skill level necessary for a particular activity in the project, and also to match people to those skills. To hire the perfect staff, the project manager should make sure to define the roles properly, arrange interview and test the candidates. He should also be careful about the budget, because hiring skilled people may not always be achieved in a cheaper way. The project manager must guarantee that the team members are respected properly. Without getting proper attention, admiration and respect, the team members in a project will not try to give their 100%. Furthermore, the project manager will have to utilize his motivation skills properly. He must encourage his team members to render their best effort, and remunerate them whenever they do something special. He must also try to empower the team members and ensure their participation in all sorts of decision-making process. This will ultimately increase the overall productivity and the project will lead towards success. Ensuring better workplace environment is another important thing that must be carefully taken care of by the project manager. Experiments have suggested that people’s performance and their job satisfaction are seriously affected by the room size, furniture, equipment, temperature and humidity, brightness and quality of light, noise and most often the degree of privacy available. If the project manager fails to ensure good working condition, it may become really costly for the project. Staff turnover will increase, and more money should be spent on recruiting and training of new staffs. There will be the possibility that the project will not be finished in time. The project manager must also ensure the optimal utilization of the available resources. Sometimes it is seen that some members of the project team spend their official time sitting idly, while other members work incessantly and find very little time to relax. The project manager has to set the duties and responsibilities of every member of the team and continuously monitor them. He must also ensure that all the members of the project team are 100% committed to achieve the project goals and objectives. The project manager should also be careful about utilizing non-human resources. He must make sure about the regular supply of materials and equipment required for the project. He must also confirm about the better quality of these resources, which is extremely necessary in a project. The project manager has to communicate well with the project sponsor to make sure about the availability of funds. The sponsor must be knowledgeable about all the potential obstacles, risks and other necessary issues on an on-going basis. This will make sure about the availability of the resources in a timely manner. Lastly it can be mentioned that managing all sorts of resources in a proper manner is absolutely necessary to ensure the overall success of the project. The project manager must give appropriate attention in this regard.


Types of Resource Management[5]
Resource Management is a broad category of management as opposed to a discipline in itself. The following are common types of resource management.

  • Human Resources: Managing people including organizational structure, recruiting, onboarding, training & development, performance management, compensation, payroll, benefits, industrial relations and compliance.
  • Natural Resource Management: Stewardship of natural resources such as land, water, soil, trees, plants and animals to ensure they are sustained for future generations.
  • Project Resource Management: Allocating resources assigned to a project including techniques such as resource leveling.
  • Financial Management: Managing financial assets and liabilities.
  • Infrastructure Management: Managing foundational structures such as bridges or electrical grids including deployment, operation and maintenance.
  • Facility Management: Managing a facility such as an office building or data center.
  • Enterprise Asset Management: Managing the capital assets of an organization.
  • Public Asset Management: Managing the capital assets of a nation, region or city.
  • Digital Asset Management: Managing digital assets such as documents and media.
  • Inventory Management: Control and optimization of inventory.
  • IT Service Management: Managing information technology assets as a collection of services defined by service level agreements.


Principles of Resource Management[6]
One of the most important elements of project management is managing the resources that actually do the work. In practice, however, many PMs focus on measuring resources rather than acting as a force multiplier that understands and motivates their team. To help you avoid this mistake, here are five key points to effectively managing resources:

  • Resources are people, too: Resource management is typically discussed with charts and graphs, using terms like Resource Assignment Matrices (RAMs) and optimal utilization. While this mechanical methodology creates an important analytical framework for Portfolio Project Management (PPM), the most important nuance is almost always overlooked: Resources are usually people. In the end, all the histograms in the world won’t actually increase your team’s productivity. The fact that people are ultimately responsible for project success is the most important thing to remember about resource management. Soft skills like communication, leadership and emotional intelligence are necessary to effectively communicate with team members in order to inspire and motivate. Great PMs understand how to combine PPM tools and the people doing the work to create a transparent, collaborative, and productive project environment.
  • Visibility is key: The ability to strike a balance between knowing what motivates your team and what they are working on is vital. Make sure that you have a global view of all your projects and resources. The ability to use a PPM tool that enables enterprise resource planning and scheduling can be very powerful in the diagnosis of potential pitfalls and enable careful introduction of certain productivity measures necessary to run your business. Just remember that the numbers don’t actually speak for themselves: people do. Use metrics wisely to help identify project areas that might need attention, then seek to understand how you can help by talking to the person or the team responsible for completing the work.
  • Collaboration increases productivity: It’s commonly regarded these days that collaboration among team members increases productivity and decreases errors. Using a tool that enables your team to collaborate and foster both productivity and creativity is critical to successful resource management (and the success of your project). Nobody wants to be left alone to wither away in a desert, so make sure your team is free to quench their thirst for real-time feedback and ideas through collaboration tools.
  • Transparency fosters trust: Make sure your resources are aligned and everyone’s working toward a common objective. Transparency in resource management requires:
    • Clear prioritization of tasks. Make sure people know what’s important.
    • Solid estimates. Give people the freedom to estimate in ranges and you’ll not only create more accurate schedules, but you’ll also highlight the uncertainly in your project plan.
    • Risk awareness. Involve resources in the project planning and delivery processes and encourage open discussions about the biggest risks to your project

When everyone is open, honest and transparently working together, your resources become an unstoppable force of nature.

  • Don’t forget to show the love: People perform at their best when they’re passionate about their work. Not surprisingly, when you have resources working on tasks that are outside of their skill-set or their field of interest, the end result will be uninspired at best (and counterproductive at worst). Get to know your teammates to find out what type of work they really love to do or what type of work motivates them most. This will help you match a resource to a task rather than assign a resource. Conversely, you’ll know which tasks they should steer clear of, resulting in the optimal resource allocation. Lastly, never let a job well done go unrewarded. Let people know how important their efforts are to the project. Your team is capable of amazing things – don’t ever let them forget it.


Elements of Resource Management[7]
Among crucial elements of resource management, the following are the most key:

  • Resource Plan – Every project plan should have a resource plan as its component. The resource plan should contain all aspects of your project from beginning to end that pertain to resources required.
  • Resource Breakdown Structure – Here, you will break down the resources required to complete the project in a hierarchy – as you would in a work breakdown structure or an organizational breakdown structure.
  • Responsibility Assignment Matrix – this is where the resource or organizational breakdown structure meets up with the work breakdown structure to assign responsibilities to the various branches in the hierarchy.
  • Resource Overallocation – Overallocation of a resource is when a resource has been assigned more work than can be completed during normal work hours. Resource allocation often leads to overtime and overspending on financial resources.
  • Resource Histogram –This graphic representation can cue project managers whether there are any resources being overallocated.
  • Resource Dependency – If two tasks require the same resource to complete them, then these tasks are resource dependent. If a task can only be completed by one resource, it is resource-dependent. A resource dependent task has particular constraints linking it to a particular resource.
  • Resource Leveling – Leveling resources involves redistributing an imbalance of allocated work. It assists project team members by keeping them from becoming overwhelmed, working overtime, or running into project burnout.


Resource Management Lifecycle[8]
The lifecycle for resource management can be broken into four key areas:

  • Definition: HR/resource policies, rates, and supporting fiscal periods, as well as the definition and identification of the key components and levels of the organization/resource breakdown structure.
  • Development: Entry and on-going maintenance of resource plans and assignments, including baselining and versioning, as well as support of a top-down or bottoms-up planning approach.
  • Delivery: The collection, either manually or automatically, of the actual; and, conversely, the provision of configurable reports and views to support the entire process.
  • Drive: A series of what-if modeling scenarios and variance analysis to drive on-going decision-making and performance tracking, involving resource demand vs. capacity analysis.


Resource Management
Figure source: PCubed


Effective Resource Management[9]
For any project to be a success, one cannot undermine the importance of effective resource management. The impact of effective resource management can be seen not only on the profits incurred due to resource optimization and reduced bench time but also in the spirit of positive attitude and motivation it generates in the resources.

  • Have a list of the projects planned for the year at hand. This helps in forecasting the skills required, the resources needed etc accurately so that it becomes easy to allot and move resources for each of the projects. This not only helps in optimum utilization of resources but can also throw light on the actual project effort, project monitoring etc.
  • Have resource capability database with pertinent information updated on regular basis. Knowing the resource skills helps in efficient assigning of the resources to the projects. The resource database should be continuously updated so that it is useful and fulfills the objective of effective resource utilization and helps in mapping the employee-employer goals better.
  • Project reporting and project status report automation is very useful in improving the team productivity. Doing the mundane tasks of data collection, report filing, parameter calculations etc can bring down employee performance. Having a smart tool in place which can extract the needed information and generate the reports accordingly not only saves time and improves accuracy but greatly helps in building employee morale. This also provides the right visibility for the resource manager to know the resource need changes in the projects.
  • Knowing the future requirements and the future projects in the pipeline helps in not only in the resource utilization optimization but also in your recruitment drive. You would know the resource skills that you need to acquire and can give sufficient lead time to your recruitment division to identify the righter sources. It will also help the organization to know the budgeting requirements and have a balanced portfolio.


Resource Management Best Practices[10]
Resource management is heavily linked to your scheduling and management of your project management schedule. These are different but complementary disciplines, and the more holistically you approach managing your resources, the more you’ll be able to act in a timely manner to keep your project moving towards success, on time and within budget. There are four ways you can keep on top of resources workload.

  • Manage work schedule calendars actively: You need to be able to track hourly and daily availability of individual resources, as well as track their planned holidays and vacations. Be sure to take into account global or regional time differences, as well as different global holidays that might differ from your home office holiday calendar.
  • Monitor progress on Gantt and dashboard: You can also consult the planned versus actual progress of your overall project to get a head’s up if there’s a problem with resources. A Gantt progress bar should tell you how much progress is being made on a specific task according to the planned effort. You can see an instance of that in the image below, where the orange bar has a white line showing progress of all the sub-tasks underneath. You can also see whether progress is made on individual tasks with shading on the larger task bars. You should also be able to get a view of the whole project’s progress both by looking at a rolled up view of the Gantt tasks or on a dashboard report. If you’re falling behind, usually moving around resources is a way to get back on track.
  • Review workload allocation: The team’s workload is another metric you’re going to need to keep close. If all the work is being laid on the shoulders of only a few team members, while the others are idle, then you’re going to need to reallocate your resources. Another way of looking at this is leveling your resources by ensuring that they are equally distributed across your team. Checking on workload is a daily part of keeping your resources well-allocated.
  • Get resource reports to monitor productivity: When you’re watching your resources in real-time, and the project’s success is on the line, then you’re going to need to make decisions swiftly. Use your reporting feature of your project management tool to produce reports on resource allocation, as well as task progress by individual. It’s important to monitor resources regularly with deep dives into data to measure productivity KPIs like output and actual effort.


References

  1. Definition of Resource Management Business Dictionary
  2. What is Resource Management? Wikipedia
  3. Resource Management as referenced in Project Management and Business Management Shopify encyclopedia
  4. Why is Resource Management Important? Niaz Makhdum
  5. What are the Different Types of Resource Management Simplicable
  6. 5 Key Principles to Resource Management LiquidPlanner
  7. What are the Key Elements of Resource Management Brighthubpm
  8. Resource Management Lifecycle Byron Garbutt
  9. Effective Resource Management and Project Planning Radhika Chittoor
  10. Resource Management Best Practices Jason Westland


Further Reading

  • Resource Management Across IT: How Better Resource Management Enables Better IT Execution ServiceNow
  • 4 Elements to your Business Reducing Costs with Resource Management Sean Pales
  • Two dangerous ways project resource management can go wrong Greg Bailey
  • Baseline Resource Management Cogta.Gov.ZA
  • Leading People Resource Management CSU.edu