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What is Resource Management?

In today’s world the term resource management can cover the management of a wide variety of resources, ranging from physical resources such as gold and oil, and increasingly rare metals required for batteries and mobile phones, through computing capacity to human resources. The resources that this post refers to are human and specifically the management of those that work across a portfolio of projects and/or services. So, What is resource management?  discusses the issues around the continuous optimisation of a pool of multi-skilled resources, who are deployed across multiple projects.

Managing multiple projects with a limited pool of human resources is quite a challenge. The goal is the keep all resource teams as fully utilised as possible, whilst ensuring that there will be sufficient capacity to ensure that each and every individual project milestone will be met. Because of the unpredictability of individual projects, there must be sufficient spare resource to plug any gaps as they emerge, but too many just hanging around will reduce staff utilisation levels and can quickly erode operational profits. A recent member survey by the UK Association of Consulting Engineers showed that a 2% increase in utilisation levels would typically increase their profits by 25%, so getting it right is highly rewarding.

What is the best type of organisation?

In order to maintain the right balance between these competing objectives, organisations that manage multiple projects are commonly organised as a matrix. This enables project managers to focus on meeting their individual project milestones, whilst team leaders can concentrate on maintaining high levels of utilisation for their teams. However, the natural tensions that can arise – I need someone with the right skills and competencies to work on my project now! – means that a strong project management office is needed to produce early warning of such potential conflicts, and to police the agreed resource management process steps. Senior managers often have to step in to resolve disputes and assign priorities for competing resource claims.

Resource management process

Effective project matrix organisations require a comprehensive and well-defined resource management process.

1    Demand management / capacity planning

Forward loading reports highlight resource bottlenecks and unacceptable under-utilisation in all corners of the organisation. They provide early warning so that corrective action can be taken.

Chart compares resource demand with skills capacity. Click the row links to drill down through the organisation.

Where there is scope for adjusting project timescales, What If…? Analysis enables portions of the project plan to be dragged in time to get the best balance between demand and capacity.

2    Resource allocation

With the demand and capacity balance optimised and the project schedules confirmed, requests for individual resources appear on each relevant team leader’s home page. As projects get more technically complex, project managers need to specify particular skill and competency requirements. These are made visible to the team leaders and any non-compliance of a proposed resource can be highlighted, as shown in the screenshots below.

How the project manager can specify a Netsuite skill with minimum Advanced competency requirements for their Specify task.

When the team leader proposes a resource with only intermediate competency, the non-compliance is highlighted in red.

The typically resource allocation process consists of:

  1.   Project manager Requests resource, specifying minimum skills and competency requirements
  2.   Team leaders Propose suitable candidates,
  3.   Project manager sees any non-compliance in proposed resource skills and competencies and can Accept or Decline the proposed resource.

3    Performance measurement and re-planning

The prudent project manager will want to assess the progress of each project for early warning of problems that could impact project timescales or budget. This requires;

  1.   Taking a copy of the agreed time-phased plan (the baseline), as a yardstick for measuring performance.
  2.   Using timesheets to record actual levels of effort spent to date
  3.   An independent measure of the value of work done.

This provides cost and schedule indices that can be used by senior managers to question any over-optimistic estimates to completion made by the project manager!

Whenever a project change order that impacts the plan is agreed, the baseline should be updated so that the cost and schedule indices accuracy will be maintained.

How resource management tools help

Many organisations use team-based spreadsheets for their resource management, but these provide incomplete pictures of demand and capacity, particularly where resources with similar skills are spread across more than one team. Converting your resource planning spreadsheets into Innate will transform your system:

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

So, the answer to What is resource management? is quite complex. In order to achieve continuous optimisation of resource utilisation, when each project has its own timeline, competency and priority, a matrix organisation with a well-defined resource management process is paramount. As is effective support from appropriate resource management software.

 

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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