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Resource allocation methods in project management

To effectively managing resources across multiple projects, two key processes need to be in place. The first is demand and capacity management. This ensures that sufficient resources with the right skills and experience will be available so that each and every project commitment can be met. Resource allocation methods in project management, which then matches appropriately qualified staff to project tasks, is the other.

Resource allocation methods in project management vary significantly depending on the complexity of the projects being managed and how the organisation is set up to manage the multi-project workload. For small organisations, where projects are generally managed within a team, the process can be quite simple. The Team Leader knows the capabilities and experience of their staff, and a simple, team focused, resource plan will show who is available. For them, Spreadsheets or simple resource management software are appropriate tools.

Resource allocation in larger organisations

Larger organisations, with more complex projects that draw staff from multiple teams, face much greater challenges. These challenges differ depending on the type and complexity of individual projects. For those with a small number of large projects, such as in the engineering and construction sector, individual resources are often allocated full time to a single project and the tasks that they work on is then down to the project manager to decide. This allocation at project level is often referred to as macro level resource allocation.

For those that manage a large number of smaller projects, where individuals are expected to work across several projects simultaneously, effective resource allocation requires detailed work estimates for every project. This is because individual resources will be allocated to specific project tasks. Operational profitability depends on maintaining high levels of staff utilisation, whilst, of course, ensuring that there is sufficient skills capacity to meet the demands across the project workload, without jeopardising key project milestone dates. Striking and maintaining this balance can be hugely demanding, particularly where individual project plans are volatile.

In both of these scenarios, multi-project organisations are generally organised as a matrix, where:

  • Project managers take responsibility for their project’s work estimates and use these to request appropriate staff from various team leaders.
  • Team leaders are targeted with hitting staff utilisation targets, whilst ensuring that each project manager’s request for resource  can be satisfied.
  • The Project Management Office polices adherence to the process and provides assistance.

With such a dynamic process, senior managers often need to assign priorities and resolve disputes.

Managing a complex resource allocation process

As projects get more technically complex, project managers are having to specify their resource requirements in greater detail. This is leading to the greater use of skills and competency resource data in resource management tools, often stored as a skills matrix.

Sophisticated resource management tools have a workflow system for directing resource requests to the relevant team leader. However, for larger organisations, the requested skills and competencies may be available in more than one team. For these, team leaders need access to a shared list of outstanding requests that match their staff’s capabilities, leading to project managers receiving candidate offers from more than on team leader; the dating agency, as one of our clients calls it!

Resource allocation methods in project management vary considerably dependant on the organisation size and the number and complexity of the projects that they handle. But they are essential if suitably qualified and experienced staff are to be consistently allocated to each and every project.

 

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.
Posted in resource management

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