Why is managing resources across multiple projects important? Project organisations face two conflicting objectives, where the failure of either can have severe financial or reputational consequences. Mastering how to manage resources is important.
Clients require that phases of their projects are completed on time and within budget. To achieve this consistently, there must be sufficient resources with appropriate skills and experience committed to each phase. The consequences of failure to the project organisation can be both financial, if the budget is exceeded, and reputational if target dates slip, particularly when the client is an external organisation.
The timescale risk can lead to spare resource being secreted away by project managers ‘just in case’, but this can quickly erode resource utilisation levels and severely impact the project organisation’s profitability. Evidence of this was provided by an Association of Consulting Engineers (UK) member survey a few years ago, which found that a mere 3% reduction of utilisation levels reduced their member organisation’s operational profits by around 25%. So How to manage your resources is a really important question!
Striking the right balance on resource levels can be quite a challenge. Accurately estimating projects is notoriously difficult, even for those that are run of the mill. But for those that are unusual, the risk rises exponentially.
Further challenges arise as projects increase in technical complexity:
- A more agile approach to project planning become necessary; often a realistic estimate for the second phase cannot be made until the first phase is nearing completion. Clients, however, will want a firm price up front based on an agreed overall project scope.
- Increasing technical complexity will also reduce the flexibility in allocating resources. Project tasks may require resources with minimum skills and competency levels, including a specified certification.
The next sections discuss how to manage your resources effectively
Manage multiple projects with a matrix organisation
The best way of meeting these twin objectives is to organise as a matrix. Project managers focus on the delivery of individual projects, relying on resource from various team leaders, who strive to keep their teams as fully utilised as possible. The resourcing of each project can then be effectively managed using a well – defined resource management process, which typically consists of 3 steps.
1 Demand management / Capacity planning
As new projects get close to confirmation, their resource plans are layered on top of the committed workload, to ensure that sufficient, appropriate resources will be available.
Chart shows the effect of two proposals being awarded on the committed workload. Red cells highlight bottlenecks and show their extent.
Where unacceptable bottlenecks could be introduced, good resource management software provides ‘What If…’ analysis that enables project phases to be dragged in a Gantt chart view to positions that minimise their effect. This evaluation of alternative scenarios can aid final negotiations to ensure that unrealistic project commitments are not being made, or used as a contractor hiring profile.
Dragging Proposal’s bars out in time shows delays required to avoid unacceptable bottlenecks.
2 Resource allocation
With the committed workload in balance, the next step is the resource allocation process. Typically,
- Project managers Request resources, based on their resource plan work profiles. They may need to specify a number of required attributes, such as Location, Languages and, increasingly, required skills with minimum competency levels.
- Team leaders locate and Propose suitable resources that are available.
- Project managers can then either Accept or Reject proposed resources. Where minimum requested competency levels are not met, the resource management software should highlight non-compliance.
Project manager can easily see that the proposed resource, Pat Pringle’s Intermediate competency, does not comply with the requested minimum of Advanced.
The prudent project manager will want to track progress and measure performance on their projects as soon as possible, so that corrective action can be taken if necessary. Such corrective action is likely to amend the work profiles on some project tasks.
Another trigger for change is when project change requests are agreed with the client
Any such re-planning should immediately show if new resource bottlenecks are introduced, and trigger a re-run of the demand management and resource allocation process steps.
For project organisations with a workload of volatile projects, re-planning can create instability in the management information. This is where resource management software can make an effective and very valuable contribution to How to manage your resources.