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Project resource management

Managing multiple projects with a limited pool of resources can be quite a challenge. No sooner do you have the demand nicely balanced with your skills capacity when a change occurs, causing resource bottlenecks or unacceptable levels of spare capacity. Effective project resource management can be an exciting ride!

The challenge is to continuously optimise the utilisation of project staff, when each project has its own timeline, competency requirements and priority. Project managers will be keen to ensure that sufficient spare resources are available to plug any gaps, but too many just hanging around will undermine utilisation levels and quickly erode operational profits. A recent member survey by the Association of Consulting Engineers in the UK showed that a 2% increase in resource utilisation increases operational profits by 25%!

The right balance can only be maintained if the following are in place and adhered to by all participants:

Project focused organisation

To consistently manage multiple projects effectively and profitably, project resource management generally requires a matrix organisation, where:

Project managers strive to ensure that their key project deliverables are achieved on time and within budget. Sufficient resources with appropriate skills and competencies must be allocated to their projects as necessary for this to be consistently achieved. Apart from the internal cost implications, poor project performance can damage client relations and lead to loss of new project awards.

Resource managers are targeted with maintaining high utilisation levels for their teams. They strive to ensure that their team’s skills and competencies remain in balance with the overall project demand. Adjustments to their skills mix will be necessary as the demand profile for new projects changes.

A strong project management office (PMO) is required to police the agreed resource management process steps and ensure high levels of compliance by project and resource managers.

Senior managers will be called on to resolve disputes and conflicts of interest. For volatile projects, where there are frequent changes in scope and schedule, they will have an active role.

Project resource management process

To ensure that there is effective collaboration between project and resource managers, a comprehensive project resource management process needs to be defined, agreed and policed. It will generally consist of three phases:

1   Demand management/capacity planning

Forward loading views of the committed projects workload are the starting point. Drilling down through the Organisation structure will highlight resource bottlenecks and areas of under-utilisation in all corners of the organisation. The report below show areas where additional skills are needed to meet project commitments and, conversely, where there is too much spare capacity.

The red cells indicate the resource bottleneck profile that needs to be addressed by contract staff, new hires or retraining programmes

As new projects arrive, or changes in project scope or schedule occur, the resource capacity implications can immediately be seen.

As potential projects move closer to being awarded, they can be layered on top of the committed work load so that the resourcing implications can be clearly seen. If unacceptable bottlenecks are forecast but there is scope for adjusting some project schedules, then ‘What If…?’ analysis can be used to minimise these bottlenecks. Such adjustments will help boost overall utilisation levels within the constraints of project commitments; this is a key goal of project resource management.

2   Resource allocation

Once the demand vs capacity balance has been optimised, the matching of suitable resources to individual project tasks can take place. As projects get more technologically complex, project managers increasingly need to specify required skills and competency levels, and possibly certifications, when requesting resources. This is driving the demand for a skills database to identify individual’s competency levels. It is often organised as a matrix.

Project manager requests resource with a minimum Advanced competency in Netsuite

But proposed resource, Pat Pringle, only has Intermediate competency

The resource allocation process typically consists of the following steps.

  1.   Project manager requests resource.
  2.   Resource manager searches available resources and proposes a candidate
  3.   Project manager either accepts or rejects proposed candidate
  4.   Eventually a proposed candidate is accepted

In larger organisations, where skills are available in more than one team, the process includes a posting board where requests for resource are visible to all relevant resource managers. Each can then propose their most attractive candidate. It sounds like a data agency, which is how one of our clients describes the process!

3   Performance measurement and re-planning

As the project gets underway, the prudent project manager will want early warning of any deviation from the plan. Actual performance will affect the project outcome. Realistic project performance measurement requires an earned value approach, based on:

  1.   Establish a project baseline as the yardstick for measuring performance. It should be a copy of the resourced plan at the time it is approved;
  2.   Track actual effort spent, using timesheets.
  3.   Assess what’s been achieved, i.e. the value of the work done for the level of effort spent.

The cost and schedule variances show the deviation so far from the agreed plan. To make the estimate to completion more realistic, senior management may well want to apply these variances to the outstanding work plan when re-estimating to completion.

Performance measurement also needs to accommodate changes to the scope of the project. As project change requests are approved, the project baseline should be updated as part of the re-planning, so that realistic performance measurement can continue.

Appropriate resource management tools

Too many matrix organisations still have separate tools (often spreadsheets) for their project and resource managers. This lack of common data means there is an incomplete picture of demand and little confidence in the accuracy of resource loading information.

Converting your resource planning spreadsheets into resource management software, such as Innate, will transform your system:

  •  Project and resource data become consistent, current and complete.
  •  There is multi-user access with data access permissions and workflow control.
  •  Traceability tracks who changed what, by how much and when.
  •  Web based reports will substantially improve communication.

Project resource management is a complex and demanding process. But getting it right will significantly improve the cost and timescale performance of each individual project, and increase operational profits by optimising staff utilisation.

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 software

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