The goal of Resource optimization is to continuously maximise the utilisation of your staff across the multi-project workload. The problems with accurately forecasting the effort required and likelihood of changes as the project develops, make this a difficult, ongoing challenge. Resource optimization definition is a useful starting point.
Why is Resource optimization so important?
Managing multiple projects with a limited pool of resources is an exciting ride! No sooner do you have the skills demand nicely balanced with your capacity than a change occurs in a project plan somewhere, which throws it off balance. Striking the right balance is difficult. Project managers strive to ensure that each project milestone will be met to avoid client disappointment. This means their having sufficient spare resource to plug any gaps as they arise. But having staff hanging around ‘just in case’ will erode utilisation levels and can severely impact operational profits.
A recent member survey by the UK’s Association of Consulting Engineers found that an increase in utilisation (measured as billable hours) of just 3% increased their operational profits by 25%; a rich reward for a relatively modest increase in utilisation! This is why an appreciation of resource optimization definition is so important.
What needs to be in place?
There are organisation, process and software tools requirements
1 A matrix organisation
Most organisations that manage multiple projects are organised as a matrix. Project managers are responsible for the successful delivery of their projects. Resource managers, who provide the required resources, are responsible for ensuring that the resource levels and their mix of skills and competencies match the cross-project demand. This approach enables the twin goals of resource optimization to be addressed, as described in the previous section.
Within the matrix organisation a reliable resource management process needs to be established, consisting of two phases:
2 Management of demand and capacity
The starting point is to identify any skills bottlenecks created as new projects arise or project changes occur. New project resource plans are layered on top of the committed workload as they get close to approval, to ensure that no unacceptable bottlenecks will be introduced. If the project has high priority then ‘What if……’ analysis can be used to delay lower priority work to free up the required resource, or the required profile of contract staff be seen.
See the impact on resource capacity of adding 5 new projects to the confirmed workload. Bottlenecks shown in red.
For more details take a look at our blog on project resource management
3 Resource allocation
With skills demand and capacity in balance, the resource allocation process can commence. This is discussed in detail in our blog on Resource allocation methods in project management
4 Effective resource management tools
Many organisations continue to struggle with spreadsheets when attempting to optimize their resource utilisation, which undermines confidence in the data and reports. Converting your spreadsheets using proper resource management system, such as Innate, will transform your system:
- Project and resource data become consistent, current and complete.
- Web based reports substantially improve communication
- There is multi-user access with workflow control and data access permissions.
- Tracking reports show who changed what, by how much and when.
With rich financial rewards for continuously optimizing the utilization of your resources, a clear understanding of the resource optimization definition is key to success.