Resource management software – building a business case

There is a proliferation of project management tools out there and making a case for resource management software as a separate investment  can look challenging. However, by focusing on the benefits of maximising the utilisation of your expensive skilled resources, building the business case can be quite straightforward.

Managing a portfolio of projects with a limited pool of resources is an exciting ride. No sooner do you have the skills capacity in balance with the resource demand than a new project or change order arrives, throwing it out of kilter. Getting the balance right is not easy. Too few resources can jeopardise the ability to plug unexpected resource gaps and put key project milestones at risk. However, too many just sitting on the bench will quickly erode utilisation levels and can seriously impact operational profits.

It is also important to regularly measure progress on each project and update their resource estimates as variances appear. Earned value techniques provides the basis for consistent and objective project performance

In a recent member survey, the Association of Consulting Engineers (ACE) found that ‘if fee earners could increase their billable time by 10 minutes per day, the average ACE member would generate 2.3% extra revenue…..which could raise profits by 33%’. In other words, a utilisation improvement of 2% can improve the organisation’s profits by a third; a rich financial reward for a modest improvement in productivity.

This is the nub of the business case argument. If resource management software can help to improve resource utilisation levels, within the constraints of committed project dates, it can easily pay for itself within 6 months. The business case for resource management software can be built around 3 headings:

Cost savings

Improved resource loading views that highlight periods of overload and underuse should produce measureable improvements in utilisation levels. For staff with an average loaded cost of £50k per year, a modest 2% increase in utilisation should give annual cost savings of £100k for a resource pool of 100. So a payback period of less than 6 months can be expected.

Substantial improvements in profitability

For services organisations, the Association of Consulting Engineers survey indicates that such a cost saving can significantly leverage operational profits. Their members claimed by a third for a 2-3% increase in utilisation levels.

Improved performance on individual projects

Improved management information also substantially reduces the risk of committed dates being missed, due to project resourcing issues. The cost of damage to client relations can be incalculable if key project dates are missed.

Barry Muir is a Director of Innate Management Systems Ltd. We have been implementing resource management software in a wide variety of professional services organizations for more than 20 years.
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