1 What is resource management software?
- What management information is produced?
2 Why is resource management so important?
- What are its financial benefits?
3 Who uses resource management software?
4 What needs to be in place for success?
- Matrix organisation
- The sound resource management process
- Appropriate software tools
- How well do you score?
5 Managing the current workload
- Project templates
- Project plans and work estimates
- Resource data, including skills and competencies
- Keeping the data consistent, current and complete
- Resource request cycle
- Project performance measurement
6 As new projects arrive – demand management
7 Managing project change
- Change in project scope
- Change in key project dates
8 Implementing resource management software
9 Frequently Asked Questions
1 What is Resource Management Software?
Resource management software supports project managers and team leaders through their demand management and resource allocation process, for the life cycle of every project. Maintaining details of project estimates, resources and their skills and competencies, and knowing who’s been assigned to which projects, resource management tools enable:
- Checking the skills capacity to take on new work. When bottlenecks arise, a clear profile of required contractor hire or recruitment is shown.
- Resource planning with web-based spreadsheets and bar chart views.
- Locating suitable staff and managing the resource allocation process.
- Record, or import, how time is spent on project tracking, metrics, and staff utilisation.
- Cost and rate management to provide cost and income projections against project budgets.
- Well-structured management information for better decision making.
Resource Planning View with skills bottlenecks shown in the lower half
Even in large organisations, resource management can still rely on a number of spreadsheets developed by departmental heads for their personal use. Without a central database, the source data is inconsistent, incomplete and difficult to consolidate, so you simply cannot see looming resource bottlenecks and periods of underutilization. Without this visibility, it is not possible to improve utilisation levels without jeopardising individual project’s key dates. So how can you decide the type and numbers of contractors to hire, over what period of time? It’s just a stab in the dark.
Resource management software is particularly effective where the current process relies on multiple spreadsheets. Converting these into a central database provides:
- Project and resource data that becomes consistent, current and complete.
- Multi-user access with permissions and process control.
- Traceability that tracks who changed what, by how much and when.
1.1 What Management Information is Produced?
The management information produced falls into 4 main categories:
- Demand management and capacity planning
- Productivity and utilisation
- Resource allocation
- Project performance measurement
Demand Management and Capacity Planning
There a couple of useful demand management reports:
1 Forward Loading Reports – To identify bottlenecks and spare capacity
This starts by showing the forward loading of resource demand vs capacity at the highest level of the Organisation structure. Colour coding in the time-phased cells identifies bottleneck periods (red) and unacceptable underuse (green). Clicking on a Department link shows the loading at the next levels down, so bottlenecks and areas of underuse can be seen in every corner of the organisation.
Drill down through the organisation structure to locate the source of bottlenecks
Extensive periods of amber show that the right balance has been struck, as no bottlenecks are forecast and the teams are hitting their utilisation targets. This confirms that the right resource balance has been found and the potential benefits of the resource management software are being realised.
As proposed projects get close to approval, the resource impact of the award can easily be seen by layering their plans on top of the committed work. This gives early warning should new skills bottlenecks be likely.
2 Scenario Comparisons showing the resourcing impact of new projects being awarded.
Scenario comparison reports show the implications of new different combinations of new projects arriving. They are useful views for demand management meetings, where responding to skills bottlenecks is high on the Agenda. There is a strong financial incentive to reduce the bottleneck periods and minimise the hiring of contract staff.
Productivity and Utilisation
These reports show how effectively your teams are working.
Whilst forward loading reports look ahead, productivity and utilisation reports focus on the recent past. The example compares headcount levels within each team with the time booked to productive tasks, for the previous 12 months. This highlights those teams that are top of the productivity table so that other teams can maybe learn from them how to improve.
A number of reports help with the resource allocation process:
1 Track Outstanding Request for Resource
As project managers request resources for their projects, each request is directed to relevant team leaders. The report shows the time importance of dealing with requests – some are outstanding for work that is due to start next week! A report like this helps to drive the resource allocation process and avoid project delay due to resourcing issues.
2 My Resources’ Skills and Competency Levels (Overview Grid)
As projects get more technically challenging, knowing the skills and competency levels of your staff is becoming increasingly important. This view shows the mix of competency levels available for each skill. It can easily be compared with an equivalent one that shows the skills and competency demand so that recruitment or training programs can be set up to bridge any significant gaps.
Project Performance Measurement
As projects get underway, these reports show the forecast to completion, based on actuals to date and value of the work achieved – the earned value.
This report compares the time-phased project cost budget (in hours) with the actual effort spent to date and the current forecast to completion. Negative variances are highlighted in red. Whilst no earned value calculation is shown, it is an important discipline to ensures that the forecast to completion is based on a realistic assessment of what’s been achieved for the expended effort.
Cost and chargeable rate-sets can be introduced, to convert performance measurement into cost reports. Applying both cost and chargeable rate-sets to booked and planned hours enables project profitability to be forecast.
With these examples, we can start to see how resource management information helps to drive an effective resource management process, throughout the organisation.
2 Why is Resource Management Software So Important?
Resource management tools are important because it helps project and services organisations ensure they have the right skills mix and headcount so that each project commitment will be met whilst keeping their staff fully occupied.
Striking the right balance is not easy. Whilst there must be sufficient resources to plug any gaps as they appear, too many just sitting on the bench will cause utilisation levels to fall and operational profits evaporate. Managing multiple projects with a limited pool of resources can be a lively ride; you’ve just got your skill’s capacity nicely in balance with the demand when a new project arrives, creating unexpected bottlenecks.
As new project plans are approved, requests for resources must be satisfied in a timely manner. Whatever your resource allocation process, a collaboration between project and resource managers must be effective if individual projects are not to suffer.
With the project resourced and work underway, the prudent project manager will want early warning of cost and schedule overruns. Simply comparing the time spent with what was planned isn’t really good enough; an assessment of what’s been achieved (the earned value) must also be made if forecasting the remaining work is to be realistic.
And any change to a project plan can cause new resource bottlenecks!
If this scenario strikes a chord, then please read on. Innate has been helping project and services organizations get to grips with these resourcing issues for more than 25 years.
What are its Financial Benefits?
The financial benefits of getting it right are considerable. A recent member survey of the UK Association of Consulting Engineers showed that an increase in billable time of just 10 minutes per person per day would increase their operational profits by 25%. That’s a rich reward for a modest 2% increase in utilisation!
Achieving high levels of utilisation whilst meeting individual project commitments is the aim. As well as substantially increasing profitability, this can lead to the following tangible benefits:
- Improved utilisation of the workforce – Resource loading views that highlight periods of overload and underuse enable measurable improvements in utilisation levels. For staff with an average loaded the cost of £40k per year, a modest 2% increase in utilisation should give annual cost savings of £80k for a resource pool of 100. So, a payback period of fewer than 6 months can be expected when implementing resource management software.
- Save on contract staff – Improved forecasting of when skills shortages will occur means that contractor hiring is likely to be much more accurate. Not hiring ‘just in case’ leads to substantial cost savings.
Improved Performance on Individual Projects
Improved resource management information also substantially reduces the risk of committed dates being missed. The cost of damage to client relations can be incalculable if key project dates are missed.
So, resource management software is important because it can improve the utilisation levels of your project-based staff, whilst ensuring that sufficient skills are available for every project commitment to be met. Getting the balance right has a significant impact on the bottom line.
3 Who Uses Resource Management Tools?
Resource management software is used by many different types of organisation. Projects need to be managed across numerous industrial and commercial sectors, of which the most common are:
- Engineering & construction services
- Internal departments, such as IT and R&D, within financial services, government, pharmaceuticals, telecoms, and other sectors.
- Professional services organizations, including market research and IT service providers.
How resource management software is deployed and configured varies considerably, often based on the size of the organisation. For example, small businesses consisting of a single team can have a single user who maintains the data, assigns staff to projects and runs the reports. For those with a small number of teams, there may be a central administrator, supporting a small number of project managers and team leaders.
For large multinational organisations, successful deployment to all project and resource managers is required. Embedding the system with the key roles helps ensure that the resource planning and allocation data is kept up-to-date, which is crucial for the accuracy of management reports.
Large organisations, whose workload includes a number of major projects, will often already use enterprise project management software to manage individual projects, often in great detail. Confusion over the potential contribution of resource management software can arise, with the case sometimes being argued that it may not be required.
Where resources can be assigned full time to a large project for a number of months or years, how they are assigned to tasks within the project falls to the enterprise project management software. The role of resource manager tools remains the same, i.e. to ensure that the skills capacity mix can meet the demand across the portfolio of projects.
A Couple of Case Studies
1. The Engineering Services Director of a multinational in the Oil, Gas and Processing sector uses resource management software to ensure that the skills mix of their 6,000 engineers matches the demand across their engineering, procurement and construction projects. He has no interest in how individuals are used once assigned to a project, but he is particularly keen to understand the resource demand implication as new bids get close to award. The forward loading and scenario reports previously described, give him the confidence to instigate recruitment, the hiring of contractors, and re-training programs, as the balance of the required skills mix changes.
2. Another example is a multinational construction, property and infrastructure company headquartered in Australia. Their UK division used resource management software for 3 years to manage the allocation of 1,000 skilled professionals across their construction and development projects. They also use the system to track the project costs of these staff and measure their contribution to project profitability.
The successful use of the system in the UK led to the roll out the system across their worldwide operations, which supports 7,500 staff across 4 continents. Enterprise project management software sits alongside, managing the detail of individual projects.
Large organisations with a mix of smaller projects, which can run into hundreds, if not thousands, face a more complicated resource management problem. For them, the resource management software needs to be nimble as transferring individuals between projects at short notice is required. As we will discuss later, the amount of project change, i.e. volatility, can demand rapid reallocation as project scope or dates change.
Both the resource management process and enabling software need to be well embedded if senior management are to keep on top of this – consistently achieving their target utilisation levels, whilst ensuring that project commitments continue to be met on time.
4 What Needs to be in Place for Success?
The following need to be in place for success, when large organisations look to take on resource management software.
4.1 Matrix Organisation
We have discussed how organisations that manage multiple projects with a limited pool of resources need to balance conflicting objectives if the financial rewards are to be achieved. To help achieve this, sensible ones organise themselves as a matrix, so that roles are clearly identified to separately promote these twin objectives.
- Project Managers are targeted with ensuring that each and every project commitment will be met. They will argue strongly that sufficient resources, with the right skills and competencies, must always be available to work on their projects. Knowing there is spare resource,’ just in case’ will help them to sleep at night. Their role is to plan the resource demand (work estimates) and request suitable resources for allocation to their projects.
- Resource Managers, on the other hand, strive to maximise the utilisation of their teams. They focus on keeping their staff skills and competency capacity in close balance with the demand, whilst satisfying requests for their team members. Having spare resources ‘sitting on the bench’ is anathema to them. Effective co-operation between project and resource managers is crucial if individual projects are not to suffer, whilst maintaining high levels of utilisation.
- Project Management Office, the PMO is responsible for maintaining consistency across the projects and for policing the resource management process.
- Senior Managers need to make sure these relationships work effectively and to manage the competing demands. Whenever there is project change, they may need to re-assign priorities and resolve disputes.
4.2 Sound Resource Management Processes
Whilst the details of the resource management process can vary considerably between organisations, there are three main components that need to be in place:
The current picture of resource demand across the project workload is always subject to change. Change arises due to:
- New projects being awarded.
- Client delays freeing up resources unexpectedly.
- Changes in project scope and key dates,
- Realisation of poor initial estimating increases the work estimate.
Likewise, the skills capacity can easily change when, for example, key resources leave unexpectedly.
Demand management gives visibility to the changing skills demand vs capacity balance, by identifying new skills bottlenecks or unacceptable areas of underuse in all corners of the organisation. As imbalances materialise, the organisation can turn to scenarios to manage its impact.
Scenarios are copies of the live data in a ‘sandbox’ so that alternative scenarios can be evaluated when resource bottlenecks are forecast. Where projects are mainly internal, there may be scope to delay lower priority work to free up resources for new ones with a higher priority. Even where the projects are predominantly for external clients, there may be scope to move tasks around, within key delivery date constraints.
Scenarios are useful tools for demand management meetings, where managing skills bottlenecks is high on the Agenda. There is a strong financial incentive to reduce the bottleneck periods and minimise the hiring of contract staff.
The goal of demand management is to keep the current and future skills demand in balance with the organisation’s capacity. Without this, dealing with project manager’s requests for resources can leave some embarrassing gaps.
The details of the resource allocation process will also differ across organisations, but tracking each request typically follows the following sequence in matrix organisations:
- Project managers Request resources for tasks on their projects.
- Resource managers Propose suitable resources
- Project managers Accept or Decline the proposed resources.
- A proposed resource is eventually Confirmed
The impact of date and work changes needs to be assessed and any conflicts in demand need to be resolved. The resource request cycle will also vary depending on how many different teams need to see requests for particular skills. There is more on this in section 5.5.
Project Performance Measurement
No matter how carefully the work estimate is put together, it is highly unlikely that the project will proceed according to the plan. Sensible recalculation of the Estimate to completion requires the following:
- Establish the project baseline, which is the time-phased project budget, as the yardstick for measuring project progress.
- Track actual effort to date, using timesheets.
- Assess what’s been achieved to date – the value of the work done. This needs to be compared with the actual effort expended to see how well the project is going to plan.
- Re-estimate to project completion, which should be based on the performance to date.
4.3 Appropriate Software Tools
For the potential benefits to be achieved, the management information must be based on data that is current, consistent and complete. This will only be achieved if each and every project and resource manager maintains a rigorous adherence to well-defined process steps. The resource management software must be capable of being configured to provide effective support for each role, through their every step.
How Well do you Score?
Organisations looking to implement resource management tools start with a variety of assets and liabilities, it is typical that:
- Projects are often centrally registered, with financial parameters defined.
- Multiple spreadsheets are often being used for resource planning, typically department or regionally based.
- The resource allocation process is often poorly defined, with inconsistent procedures & poor communication between project and resource managers.
- Roles and responsibilities can be inconsistent in large organisations.
- Tracking of effort is often done, but measuring progress less so.
The next sections describe the components of a successful resource management process and identify, in some detail, the software capabilities needed to support it. We will look at:
- Managing the current workload.
- As potential projects arrive – demand management.
- Re-planning as projects change.
5 Managing the Current Workload
The current workload consists of the confirmed projects (and estimates of business as usual work), so each will have a plan with approved work estimates. Managing the current workload effectively requires the following:
- Project templates
- Project work estimates
- Resource data, including skills and competencies
- Keeping the data consistent, current and complete
- A Resource request cycle
- Project performance measurement.
5.1 Project templates
We’ve previously stated the importance of keeping the data consistent and using project templates is a considerable help. They provide the logical starting point for planning a new project and generally a range of templates is used to cover the different types of projects handled. The greater the detail included in each template the more likely it is that the full scope of the project will be included in the plan. The development and maintenance of project templates are normally a function of the Project Management Office.
Example of a simple project template for a Repeater type project
The project template should define the project’s work breakdown structure (WBS) which is a logical way of breaking down the project into manageable work packages. A typical structure would be Project > Phase > Task > Assignment.
Runners, Repeaters, Strangers
A useful way of classifying projects is the extent to which they are familiar or unusual. This will affect the amount of detail that can be included in each project template.
- Runners are repetitive projects, where the scope of a new one is very similar to many that have gone before. For these, the templates can be fully loaded, including detailed work estimates. Preparing the project plan is then restricted to minor editing of work estimates, whilst preserving the task and assignment work breakdown structure. Copying the plan of a previous successful similar project may be the best starting point.
- Repeaters are projects that are similar to some that have gone before, but much less so than for Runners. Whilst the project’s work breakdown structure (e.g. Phase > Task > Assignment) might be applicable to a template, it is unlikely that work estimates will be included throughout and most are likely to be entered from scratch.
- Stranger projects are ones that have not been done before, or for some time, so there is unlikely to be a detailed project template. However, templates for different project phases may be applicable and these can be pasted into a blank project, to help with constructing the plan.
When creating a project plan in a matrix organisation, the project manager is unlikely to know the names of the individuals who will eventually be assigned. The project templates should, therefore, hold a generic resource name, that describes the type of resource required. This will be stored at the assignment level, which is the level at which the time-phased work estimates will be entered.
Typically, the generic name represents a primary skill classification, such as Civil Engineer for construction projects, or DBA for IT ones. Once the project is approved, having work estimates against each generic will trigger resource allocation requests to the relevant resource managers, to get individuals assigned.
The next sections describe the underlying data that is used by resource management software and highlights the importance of, and methods for, keeping it consistent, current and complete.
5.2 Project Plans and Work Estimates
The previous section touched on the importance of using work breakdown structures with project templates. The Project Management Office is usually responsible for developing and maintaining a consistent WBS across all projects. Whilst smaller projects will naturally have a simpler WBS, they still need to be consistent with more complex ones. Without WBS consistency, cross-project reporting can be rather difficult to interpret.
We’ve previously mentioned the use of timesheets to capture actual effort when measuring project performance. They also have an important role in building up a set of reliable estimating metrics. As tasks are completed, the actual effort expended should be compared with the work estimate, when a simple variance calculation will show how accurate the work estimate was. It’s a good opportunity to review the basis of the original estimate if the actual effort differs significantly.
The more accurate the work estimate, the less likely is the need for subsequent re-planning as realisation dawns that the initial estimate was wide of the mark. It is very good practice to build up credible estimating metrics this way so that the estimates in future projects will be as realistic as possible.
Even for Stranger type projects, they will be relevant for some tasks, but for Runner and Repeater projects the application of sound estimating metrics is very valuable.
The prudent project manager will use milestones to represent the key deliverable dates in their resource plan.
Symbols show the target project completion dates and agreed on task start and finish date, within which work should be scheduled
This enables them to immediately see if any key date is in jeopardy. Whenever a project is re-planned, due to poor progress or a change in project scope, the impact on each of the key project dates can easily be seen.
5.3 Resource Data, Including Skills and Competencies
With the technical complexity of projects increasing across most industry sectors, project managers are having to specify more precisely the skills and competency levels that they need for successful project delivery. There may only be a few individuals that meet each requirement, but resorting to lesser skilled staff can have significant ramifications for the project. Maintaining a comprehensive skills database is emerging as an important part of the resource management process.
Project managers will want to specify the skills and competency levels required for each task. The skills database is presented as a skills matrix, an example of which is shown below:
Example of a skills matrix, showing typical competency levels
Once a comprehensive skills matrix has been established, the Resource database can hold each individual’s set of skills and competencies, as well as any other attributes needed to locate staff that can best do the work. The Resource database will often contain the following details:
- Where they fit in the Organisation structure, e.g. Department > Team >
- Their generic classification, such as Role, Discipline or Primary skill, which is often used when looking at capacity planning.
- Their Skill sets and competency levels, e.g. Mechanical Engineer – Intermediate, or JAVA – Advanced, etc.
- Details of relevant certifications, with expiry dates.
- Details of their systems or applications expertise.
- Grade – often used to link to a standard cost rate.
- Languages are spoken.
- Relevant professional qualifications.
More detailed data, such as the history of recent projects worked on, personal aspirations and development goals etc can also be held.
Maintaining Skills Details for Each Resource
For large organisations, keeping skill and competency data up to date requires a separate subprocess. Enabling individuals to apply for recognition of new skills and increased competency ratings, is a good incentive for keeping the data current. This is a simple 2-step process of request for review by the individual, followed by acceptance or rejection by their manager. Many organisations also interface the skills database with their HR system.
Relevant reports can help by showing:
- Details of who has what skills and competencies, with a summary table giving the numbers of resources for each skill and competency level, as shown in section 2.1.
- Demand vs capacity by skill, to highlight trends and identify staff retraining/recruitment requirements as demand patterns change.
Skills and competency summary table – number of heads
5.4 Keeping the Data Consistent, Current and Complete
As previously mentioned, a common starting point is a variety of spreadsheets developed by departmental heads and project managers for their personal use. There is often no central database and the source data is inconsistent and incomplete. This makes the spreadsheet data difficult to combine so there is very poor visibility of likely resource bottlenecks and periods of underutilisation.
This is a far from the ideal starting point and generally requires the client to spend considerable time in reviewing and modifying the data to achieve the required consistency.
Once the data has been imported into the resource management software, its central database provides the step change to achieving the consistency and completeness required, as well as the means of supporting users in keeping it up to date.
Maintaining good quality data requires an appropriate resource management process that all project and resource managers comply with. The resource management tools must have sufficient flexibility to support each role, step by step through the process.
Data Import Routines
Resource management software does not operate in isolation and its success relies on appropriate data import routines with other systems. These can include:
- HR, for maintaining the resource data. Hire and Leave dates, as well as any change in Location and Grade (for costing) are important.
- Project data. Potential projects are often initially registered in CRM systems, such as Salesforce. The resource management software needs to know the project details as they get close to an award, so that work estimates can be entered for the demand management process.
- Timesheets. Although resource management software often includes a timesheet module, there is often a system already in place. However, the existing timesheet system may not collect hours booked at a low enough level in the project work breakdown structure, so it can be difficult to measure project performance to the right level of detail.
- Cost codes and rate sets. Where project performance is required in financial terms, the work estimates and hours booked will need to be accurately converted into currency. Applying individual Grade or Role-based rates will be required and these may need to be imported.
There needs to be confidence in the accuracy of the data that is being imported. Otherwise, the credibility of the information provided by the resource management software will be continually undermined.
5.5 Resource Request Cycle
The details of the resource allocation process will also differ across organisations, but tracking each request typically follows the following sequence:
- Project managers Request resources for tasks on their projects. They may need to specify the required skills and competency levels, preferred location, etc.
- Resource managers receive requests for their team members and Propose suitable resources
- Project managers review the proposed resource and either Accept or Decline.
- A proposed resource is eventually accepted and Confirmed
For some tasks, project managers will want the ability to specify the skills and minimum competency levels required of the allocated resources. The screenshot below shows how modern resource management software can enable this. A skill of System > ERP > Netsuite with a minimum competency of Advanced is shown as a requirement for the Specify task.
Shows how a required skill and competency level can be requested
The Skills selection is presented as a matrix structure, which is the logical way of organising skill data, similar to the work and organisation structures previously described.
Each Team leader sees this detail when searching for suitable candidates. However, whenever their proposed resource fails to meet the required competency level, the non-compliance is highlighted in red, when the project manager reviews the proposed candidates:
Non-compliance with Pat Pringle, the proposed Analyst, is highlighted in red.
However, any change to the work estimate profile or to the assignment start/finish dates may introduce a resourcing conflict. Every project and resource manager should have a relevant report on the Home Page of their resource management software so that such conflicts are immediately visible to both parties.
Where such change occurs frequently, it is useful to track who changed what, by how much and when for each assignment. A pop-up report showing the history of such changes can help with effective collaboration between the project and resource managers. A quick resolution of such conflicts will ensure that individual projects do not suffer.
Variations to the Process
There will be variations to the resource request cycle. If specific skills are always found in particular teams, then the system can simply direct requests to the relevant team leader. However, many organisations are not this rigid and requested skills may be found in more than one team, department or location. In this case, the Request needs to be delivered to each of these teams so that their resource manager has the opportunity to propose candidates; they are, after all, striving to keep their teams as busy as possible. Project managers may, therefore, be presented with a choice of candidates from different teams – described by a firm of Consulting Engineers as their Dating Agency!
Effective collaboration between project and resource managers within the resource management process is a key success factor. Having a sound resource request cycle, that all project and resource managers conform to, is a prime means of achieving it.
5.6 Project Performance Measurement
No matter how carefully the work estimate is put together, it is highly unlikely that the project will proceed according to the plan. Good project management practice requires regular reviews of progress and re-planning, as necessary. Meaningful measurement of project performance requires the following steps:
- Establish the project baseline. This is a rolled-up view of the work estimates for all tasks on the project, at the time the project gets approval. This view of the project budget forms the yardstick against which actual progress can be measured, and is often presented as a cumulative S curve
- Track actual effort expended. Having project-based resources complete weekly timesheets is the most common method of gathering this data.
- Assess what’s been achieved to date – the value of the work done. This needs to be compared with the actual effort expended to give a realistic sense of the project performance against that planned. The actual project performance to date will affect the project outcome, so this is essential if realistic estimates to completion are to be computed.
- Re-estimate to project completion. There is a common temptation to imagine that poorly performing projects will suddenly get back on track. Senior managers can use the earned value approach to back up their questioning of over-optimistic estimates to complete.
It’s worth looking at the implications of Earned Value in more detail. Many project managers will ignore the concept and just update their projects based on the actual effort expended to date. This assumes, though, that progress has gone according to plan, which for most projects is highly unlikely.
Earned value demands a separate, independent measure of the value of work done. By comparing this with, for the effort expended (timesheet actuals) and the project budget, Cost and Schedule variances can be calculated, as shown in the screenshot below. This approach vividly draws attention to deviations from the expected progress.
Example of earned value reporting
Example of Earned Value report highlighting the shortfall in what’s actually been achieved
And when it comes to computing the estimate to completion, the process calculates cost and performance indices to date, which get applied to predict the cost and schedule variance at project completion. So Earned Value shows the likely implications of the actual performance to date, assuming that performance against the original estimate is not going to improve
Even if the organisation does not implement Earned value, if I were the senior manager responsible for reviewing project performance, I’d be asking each project manager to justify what could easily be an over-optimistic ‘we’re going to get back on track’ forecast. Using Earned value provides evidence for questioning this assumption.
We have looked at what’s required to manage the current workload. The next section looks at how to assess the resourcing impact as new projects get close to approval.
6 As New Projects Arrive – Demand Management
As a new project gets close to approval, it’s important to know if they will introduce new skills bottlenecks. This is highly likely where organisations are close to fully loaded with their current workload.
Work from proposed projects is added to the committed project workload, to see their impact on skills bottlenecks
The starting point is to add the work estimates for the anticipated projects to the committed workload and re-run the Forward Loading report shown in section 2.1. Repeating the drill-down process described will show what new bottlenecks could be introduced. How to respond will primarily depend on the priority given to the new project, and whether it is for an external client or an internal one.
If the new project has the highest of priorities and is viewed as critical, then either:
- Additional resources (a contract or permanent) will have to be recruited using the shortage profile shown in the forward loading report.
- Lower priority projects using the same skills can be raided, and the required resources transferred to the higher priority work.
For new client projects, having an early view of potential bottlenecks can inform negotiations over timescales and delivery dates, so as to minimise their extent. There will, of course, be limits to how accommodating the client will be to any proposed delay, particularly if they are in a hurry.
For new internal projects, it may be more difficult to hire the required contract staff. This is where scenarios can help by enabling the new project, or lower priority existing ones, to be moved around in time to optimise the use of the existing resource pool. Compromise on previously agreed delivery dates are likely to be required, but this is should be easier for internal than client projects.
There is less scope for using scenarios to move work around for client projects, but where milestones highlight key deliverable dates, it may be possible to improve the balance by moving some tasks within the project milestone dates.
Larger organisations may need to compare the resource impact for various combinations of projects being awarded. Scenario comparison reports, like the one shown in section 2.1, can be very useful. As with the Forward Loading Reports, you can drill down the organisation structure to locate possible bottlenecks for each of the scenarios, throughout the organisation.
6.1 How Does Resource Management Software Support Demand Management?
Resource management software supports demand management through the following typical process steps:
- Client-based opportunities that can potentially develop into projects are usually first registered in a CRM system, which tracks them through the early stages of the sales process. Resource management software only needs to know about them once final resource, cost and timescale proposals are required. The availability of the required resources can then be assessed prior to final negotiations.
- Data imported from the CRM system can create a new project within the resource management software. A project status field should be used to segregate committed projects from the proposals not yet awarded, for both reporting and scenarios. It is likely that a project manager will be appointed at this stage.
- With the potential project registered and correctly classified, the project manager can enter work estimates. Once agreed, they can be layered on top of the committed workload to see if any skills bottlenecks are introduced; they will want to see the extent to which the schedule can be adjusted to minimise any bottlenecks.
- Forward loading reports rely on two types of data:
- Work estimates for both committed and potential projects, which should be as accurate as possible.
- Skills capacity data that is compiled from individual resource records. The required data elements include:
- Resource skills and competencies
- Calendars that show standard working days, public holidays and available hours per day
- Hire and Leave dates
- Booked holidays and other planned absence periods.
- These have been described in section 4.2
There are two key deliverables from the demand management process:
- An accurate profile of the skills bottlenecks, so that the period’s individual contractors will be required is known with a high degree of confidence. This can substantially improve the efficiency of their hire dates and significantly reduce unused time.
- Longer-term skills planning. As the type of project changes, demand for traditional skills can decline and the need for different ones strengthens. Forward Loading reports highlight such changes as they occur and can be used to plan retraining and recruitment programs, so as the keep the skills capacity in balance with changing skills demand.
7 Managing Project Change
No matter how to sound the estimating metrics and clear the scope of the project, most will not go according to plan. In looking at project performance measurement, we’ve seen the importance of timesheets and earned value to assess dispassionately how well the project is progressing and come up with realistic estimates to completion.
However, there are two other causes of project change that can upset the resourcing balance:
7.1 Changes in Project Scope
As the project progresses and the client starts to understand its implications with greater clarity, it is quite likely that they change their mind on some aspects of what’s required, and generate a change order. The work estimate and timescale implication of each change order need to be assessed, agreed and documented, if it’s implications on overall timescales and key delivery dates are to be correctly understood. The change order agreement process should consist of the following steps:
- Maintain a simple register of Change orders for each project, and their status as they go through a simple Requested, Proposed and Agreed cycle.
- Take a baseline, or snapshot of, the project plan before looking at the change order implications. Such snapshots can be compared with each other, and the current live plan to show the impact of agreed change orders throughout the project lifecycle.
- Preferably in a scenario, start to re-plan the project to accommodate the extra work required by the change order. Whilst the client will be keen to maintain the previous key milestone dates, the resourcing implications may be such that they need persuading to accept some delays. Forward loading reports that highlight any new or exacerbated bottlenecks when comparing the proposed new plan with the most recent baseline, provide powerful evidence when making arguments for the delay – and for the increased cost!
- Once the revised plan has been agreed, update the live version from the scenario and take another baseline, labeled with the approved change order. This should now become the new project baseline for performance measurement, as discussed in section 5.6.
Subsequent project performance measurement will only be meaningful if the project baseline is updated following acceptance of each change order.
7.2 Change in Key Project Dates
Another type of change occurs when the client asks/insists that key dates be moved forward. A good way of representing the impact of this is a Milestone change report as shown below:
This shows the extent to which tasks now overrun the new, earlier, delivery date. By displaying the overhanging work estimates, the amount of work that needs to be brought forward can clearly be seen. Indeed, by filtering such reports to show only those tasks with an end date that overshoots the new milestone date, the amount of planned work that needs to be re-scheduled can be totaled. This helps the client to understand the impact of what is being asked for.
Any requested date change needs to be treated as a Change order and the change order process followed. However, bringing forward a key milestone date can trigger a significant re-planning exercise, particularly where a sequence of tasks has to be adhered to within a shortened overall timeframe. Such changes can cause significant increases in the peaks in resource demand and substantially increase the cost of the project.
Forward loading reports that compare the before and after schedules provide crucial management information, helping both the client and senior management to appreciate the resourcing implications of what’s being asked for. They can be crucial for the demand management meetings
Clients generally need to be discouraged from making too many change order requests (unless they are particularly profitable!) as they can significantly increase the volatility of the project workload. The greater the volatility of the multi-project workload, the more difficult it is to maintain an effective resource balance.
8 Implementing Resource Management Software
Implementing resource management software, unless it is for a very small organisation, deserves to be treated as a serious project in its own right. This means that the usual project disciplines are necessary if it is going to achieve its desired goals.
A typical implementation process consists of the following steps:
We will take a look at each of these steps and conclude with a discussion on what’s key to the implementation’s success.
8.1 Proof of Concept
Prospective clients often wish to examine the resource management software in some detail before making a decision to proceed. However, it is only towards the end of the Pilot phase that the software will be configured appropriately for their requirements.
A proof of concept workshop examines how the software can address specific requirements or concerns, by partially configuring the software to address them. It helps to build confidence in both parties that implementation will be successful.
8.2 Implementation Workshop
This is the starting point for system implementation. It reviews the requirements and scopes out the project. Checklists are used to document decisions, required software configuration settings, and action items.
The issues to be addressed in the workshop include:
- Understanding the business objectives for the system.
- Documenting the required process steps, and identifying parts that require clarification.
- Clarifying roles and responsibilities, so that data access permissions can be defined and Home page layouts designed, etc.
- Identifying data requirements and sources, including any regular data import/export routines.
- Specifying required reporting layouts.
- Integration with other systems.
- Identify training requirements and deliverables.
- Planning the implementation project.
More complex requirements will need to be documented in some detail and agreed upon early on. Sensible suppliers favor the ‘Agile’ approach, involving a series of prototype and review cycles. This allows the client to develop their requirements as more information on the system capabilities is absorbed, a process that tends to provide greater client satisfaction with the system. Attendees should include representatives of the key stakeholders, typically, project, program and resource managers, and those who will administer and support the system.
Prior to roll out, a system test environment should be created, so that a small group of users can test the proposed configuration over a limited period. It should include formal system acceptance if that is part of the deliverables.
- System Configuration – The first step is to configure the system based on the requirements that emerge from the Implementation workshop:
- Role-based home pages with direct links to support each process step.
- Data entry screens customised to support the required data
- Permissions set to control access to data and reports
- Create the initial set of reports
- System Configuration – The first step is to configure the system based on the requirements that emerge from the Implementation workshop:
- Review and Test – Client representatives should check out the configuration on a hosted system, using some imported client data. This to be followed by a pilot phase so that a larger number of representative users can validate the suitability of the system configuration.
8.4 Roll Out
Successful roll-out requires:
- Role-based user training program. This is unlikely to be onerous if the system has been carefully configured, so is best done by the client who is better placed to answer user’s questions
- System administration. System administration is generally not onerous, but the user’s demand for support is normally high following the rollout of a new system. The Administrator should act as the internal point of contact for all system queries and be the prime point of contact with the Supplier. A compatible test environment should be retained to check out software upgrades and any fixes
8.5 What are the Keys to a Successful Implementation?
The keys to successful implementation include the following:
Treat the Implementation is a Project
For some organisations with simple needs and processes, the effort to implement the system will be small, but whatever the size, implementing resource management software should be treated as a serious project. Potential risks should be identified and appropriate project disciplines applied. The client should appoint a project manager prior to commencement. They will need to identify the key project deliverables, risks, and issues, and ensure that there are regular progress reviews with the supplier.
Sponsor and Steering Group
It is essential to have a sponsor at the appropriate level within the client to champion the system and ensure that the required internal resources are made available. Having an appropriately qualified technical resource with the time and inclination to become the in-house expert on the software is a must.
If the implementation covers more than a single department it is important to have a steering group to make the decisions that will affect multiple areas and to facilitate the inter-working of the various groups involved.
Effective communication with all parties is vital for a successful implementation. All resources involved, whether plan owners, resource owners or the resources being managed, need to know and understand the processes involved and why the system is being implemented. There need to be appropriate communications at all stages of the implementation.
9 Frequently asked questions
What are the risks when implementing resource management software?
Resource management software helps organisations manage their technical workforce across the multi-project or services workload. It maintains operational efficiency by forecasting periods of skills bottlenecks and underutilisation. Its credibility depends on the underlying data is current, complete and consistent. Without this, the credibility of the management information and therefore the resource management software can be called to account. So the question boils down to how can the underlying data be kept up to date, complete and consistent. For this to happen, two objectives must be achieved:
First, the resource management process must be well defined, appropriate and bought into by all of the key roles, i.e. project managers, team leaders, and senior management.
Secondly, each of these key roles must play their part in keeping their Resource management data up to date and ensure that all aspects are covered.
When can I expect to see the benefits of our resource management software?
The financial benefits from Resource management software related to the more efficient use of the resource pool. For those with a volatile multi-project workload, where contractors are frequently needed to ensure that key project dates will be met, managing the demand profile of contractor hire can be one of the main benefits.
The key to delivering such benefits depends on the success of the system implementation, which much be treated as a serious project in its own right. Data cleansing, particularly if the previous system was spreadsheet-based, can take quite a bit of time. However, on the work estimate and resource skills and competency data is validated, credible management information will commence and the benefits of the resource management software can start to be seen.
What are the key roles for effective resource management?
Effective resource management means striking the right balance between having sufficient resources to ensure that each project commitment can be met on time, but without having staff sitting on the bench just in case they are required. To achieve the right balance, those managing multiple projects generally organise themselves as a matrix, so that the key roles can clearly be delineated:
Project managers are charged with ensuring that every project commitment will be met and will strive to ensure that sufficient resource with the right skills is always available. They will need to request the resource from the appropriate teams to staff up their projects.
Team Leaders strive to keep their team members as busy as possible on productive work. They will want to ensure that their team’s skills and competencies match those emerging from the project workload. They will fight the project manager’s desire to squirrel away resources ‘just in case’.
PMO. The project management office role is to police the resource and project management processes, ensuring that project managers and team leaders play by the rules. They will be keen to spot emerging skills bottlenecks, so that contractor or permanent hiring programs can be activated as required.