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Resource allocation methods in project management

Resource allocation methods in project management are used to identify staff that are suitable for working on individual project tasks. It is part of the resource management process for managing the workload across multiple project and services, which starts with project demand management before allocating individual resources.

Project demand management

The purpose of project demand management is to ensure that sufficient numbers of appropriately skilled resources are available, so that no project commitment is jeopardised due to a lack of suitable resources. Skills demand needs to be in balance with capacity if resource allocation is to work. As project plans change, or new high priority ones arrive, the balance can easily be disrupted. In more volatile environments, e.g. where there are lots of small projects rather than a few large ones, keeping capacity in balance with demand can be challenging.

Resource allocation methods in project management

Most organisations with a significant multi-project or services workload are organised as a matrix, where the key roles consist of:

  1.  Project managers who, in creating a project plan, define the skills demand profile for their project tasks.
  2. Resource managers or Team leaders attempt to keep the skills profile of their staff in line with the emerging project demand, so that they can effectively respond to requests for their staff from project managers.
  3. Senior managers, who assign project priorities and resolve disputes.

In a matrix organisation, the resource allocation process typically consists of the following steps:

  1.  Once the new project plan is approved, the resource demand profiles are made visible to the relevant Team leaders as a Request for their resource. For technologically advanced projects, the project manager may need to specify addition resource requirements, such as minimum skill competency levels, required certifications, etc., as well as language or location requirements. These are usually maintained in the resource database as a skills matrix.
  2. Team Leaders Propose their most suitable available resources. Any non-compliance with the requested skills and competencies should be highlighted for the project manager’s attention.
  3. The Project manager can Accept or Reject the proposed candidates.

Non-Compliance! Netsuite skills of Advanced competency were requested, but proposed candidate Pat has only Intermediate.

Eventually a proposed resource is confirmed. However, as the demand/capacity balance gets disrupted – due to change orders, poor initial estimating, etc – some re-allocation is often necessary.

Simpler organisations, where both projects and their resources are managed within a team, can use simpler resource allocation methods. The project manager often has the authority to select and allocate a named resource, directly.

As projects get more technologically advanced, the need for resources with specific skills and competency levels is increasing. Resource allocation methods in project management are gaining in importance.

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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