Picture this: your boss approaches you with a new idea. Naturally, the question arises: do we have available resources to start working on it? Or what if it really is the next big thing and you need to start now? How will this decision impact the existing work? To answer these questions you will need to gather and analyze tons of information and different scenarios. That’s why it is one of the key components to be successful in business. The ability to assign them, divide them into the key areas and then increase, decrease their amount and allocate them can make or break a company. Check and learn the most important elements of proper resource management.
What is Resource Management?
According to the Business Dictionary, resource management is the process of using a company’s resources in the most efficient way possible. Resources can include goods and equipment, financial resources, as well labor resources such as employees. Resource management revolves around ideas. It can define the potential physical capacity for one’s business or proper task assignment, so team members can stay busy and work on the related tasks and initiatives.
Resource Management Concepts & its Components
The key element of resource management is the ability to supervise and control the way your resources are used. Are they properly allocated? Are the team man-hours spent on items and initiatives that, by the end of the day, bring business value to the organization? According to Microsoft documentation, the other components of Resource management include:
- Forming project teams by booking available and qualified resources.
- Creating generic team member records and defining their roles and resource organization unit.
- Generating resource requirements for generic team members from their task assignments.
- Substituting resources.
- Aligning project schedule assignments and resource bookings.
- Reconciling differences in bookings and assignments.
- Collaborating between project managers and resource managers.
The Basics of Resource Management
The best way to describe the foundation of excellent resource management is by breaking it down into key areas:
Importance and Benefits of Resource Management
- Data-driven decision making – instead of operating purely by vibes (which can end with a money-burning death march), you can make decisions based on the actual amount of things and staff your organization provides.
- Avoid potential waste – it may be the man-hours or money. Resource management is a must for everyone, who treats their initiatives seriously.
- Make reasonable estimates – remember that time some companies promised the moon and stars only to fail miserably? That’s the lesson in humility and also in less exciting, but more realistic scopes and estimates for your product. That is, if you want to lie, you can obviously do that, but some people, like Elizabeth Holmes, are walking proof that you can’t always fake it ‘til you make it.
- More satisfied employees – people hate working with a project that has no estimated resources. Can they do that? Or this? Isn’t that feature too expensive? The questions (and frustration) only mount. With some planning and estimates, they know what they should focus on, and how they should do it. The more relevant information and data you give your team, the happier they will be.
- Better project flow – In the Agile world, no date is set in stone. But with proper estimates you can focus on more effective sprints and, importantly, avoid potential crunch – often the main villain that origin starts with bad planning and management.
- Create your own success pattern – after you deliver some amount of project and progress, you will learn how many resources you will need for your next endeavors, and how you should plan it. Practice makes perfect.
Resource Management Optimization Techniques
There are four popular techniques for optimization:
Stages and processes of Resource Management
Project Management Institute (PMI) publishes A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – its flagship publication about effective project management in any industry. In this guide the PMI breaks resource management down into 6 processes:
- Estimate Activity Resources.
- Acquire Resources.
- Develop Team.
- Manage Team.
- Control Resources.
The first step is necessary to define the requirements for resources. Usually, the stakeholders and interested parties describe and identify the type and quantity of these resources. This, of course, includes the human workforce.
The second step allows you to estimate both the number of your resources and sort them by their type, quality, and quantity. This helps you see how these resources will affect the project’s end date, its schedule, and potential cost.
Acquiring resources is usually the montage scene from every heist movie. You need to gather tools, purchase proper software, and hire or assign people and teams you want to work with.
The fourth step revolves around your soft skills. Once you gather a group of people, you must assign them tasks and initiatives that match their skills and ambitions. You should also focus on creating a space with mutual respect that encourages people to cooperate.
Team management revolves around both the day-to-day tasks, as well as solving potential problems and conflicts within the team and within the project. Also, it highlights the importance of changing assignments, as people may discover their strengths and weaknesses in different areas.
The last step is to make sure that resources have regular, ongoing control. They must be used in the most efficient way.
This Resource Management Plan must be consulted regularly to ensure that project resource usage is according to plan, states Bernie Rosek from Project Engineer.
Resource Management in Project Portfolio Management
PMI recognizes five stages of resource management in project portfolio management:
Level 1: The organization may recognize the need for a resource management process consisting of identifying resource requirements and “reserving” them; however, there are no established practices or standards in place.
Level 2: There are documented processes in place, considered standard practice for large or highly visible projects. They are not organizational standards used on all projects. All documented processes are repeatable.
Level 3: All processes are in place, documented, and repeatable. The processes are considered organizational standards and are being used by nearly all projects. Management fully supports the processes and has institutionalized the procedures and standards.
Level 4: Resource management processes and standards, used by nearly all projects, are integrated with other corporate processes and systems. Integration includes the resource planning process with the project management office and the human resources management process. Measurement processes are in place to provide resource performance data for management decision-making.
Level 5: Resource management processes and standards, used by nearly all projects, are integrated with other corporate processes and systems. Resource management improvement processes are in place and used. Lessons learned are regularly examined and used to improve documented processes. Processes are in place to measure resource management effectiveness and efficiency. There is a mandate to comply with all documented and repeatable resource management processes.
These are maturity levels. They represent the advancement of a company with resource management.
According to Gartner, pain points are specific problems faced by current or prospective customers in the marketplace. Pain points include any problems the customer may experience along their journey. These can also relate to the problems with resource management. You can experience financial pain points when the budget is too small. Or productivity pain points, when your team lags behind the schedule. There are also process and support pain points. The former refers to the internal processes that can be not mature enough, as PMI states. The latter is about communication and necessary help for interested parties at some point in the product life cycle.
Resource management skills every manager should have
What Businesses Require Enterprise Resource Management?
Basically, every company needs proper resource management at some point in its growth. Organizations from the financial, IT, or building sectors should focus on their resources to keep their day-to-day operations, as well as plan ahead. Also, non-profit organizations and NGOs, that rely mostly on grants and donations, must keep a strict policy in this area.
Challenges in resource management
Among difficulties typical for every project or program, this form of management can make or break your whole work. The most obvious challenge is poor resource allocation and pumping up the elements that aren’t as important or can be done effectively with less amount of resources. Underallocation and overallocation can break the project from the start.
Another challenge is poor risk assessment or complete lack thereof. The third important are schedules and deadlines – as usual, it’s better to offer bitter truth than sweet lies. Unless you want to spend most of the work crunching, which will surely backfire.
Consequences of Poor Resource Management Strategy:
- Burning through the resources.
- Lack of bringing any business value.
- Creating an environment for scope creep.
- Turning work into a crunch or a death march.
- Sudden loss of trust of stakeholders.
- Bringing the team’s morale down.
- The necessity to ask for more resources and the possibility to burn through them.
How to measure resource efficiency?
PMI proposes performance measure indicators to help assess the level of a company’s maturity in this area. These indicators are:
- Executing strategies according to the plan.
- Shareholders satisfaction.
- Financial success.
- Projects completion with the schedule and the budget.
- Customers satisfaction.
- Resources optimal allocation.
- Projects alignment to business strategy.
- Work on the right projects
Resource Management trends
Resource Management Software Tools
Looking for a good resource management tool? Try BigPicture. Our software helps you optimize your work, boost results, and save precious time. Your product, project, and portfolio management (PPM) will become much easier and will give you more space for soft aspects of management, prompting creativity, and building a culture of innovativeness. Especially important is the Resources module, which allows you to analyze the availability of your resources, teams, and skills, assign and schedule particular tasks, and update capacities automatically. No more under and overallocation.