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Who needs resource management and why?

Managing multiple projects with a limited pool of resources can be an exciting ride. No sooner do you have the demand nicely balanced with the skills capacity than a new project arrives, or a change occurs, creating new bottlenecks or periods of under-utilisation. Any organisation facing such issues needs resource management. So this article explains who needs resource management and how improved management practice can make a significant impact.

Who is affected?

Many organisations manage a mix of projects and services. These range from major projects for external clients to having a mix of internal projects and business-as-usual work. And those providing services face similar resource management issues. They are particularly common in the following sectors:

  • Engineering & construction.
  • Internal departments, such as IT and R&D, within financial services, government, pharmaceuticals, telecoms and other sectors.
  • Professional services organizations, including market research and IT service providers.

Why is resource management so important?

Project and services organisations need to find the right mix of staff, with a range of skills and competencies that matches current and likely future changes in demand. If they can achieve this whilst retaining high productivity levels there can be rich financial rewards. A recent member survey by the UK Association of Consulting Engineers found that a 2% increase in billable services improved their operational profits by c 25%!

But there are other important benefits from improved resource management practice, including:

  1.   Satisfy clients by continuously meeting target dates and minimising changes of staff assigned to a project.
  2.   Avoiding over commitment of resource and risking project delay.
  3.   Maintaining staff morale by matching their skills with project requirements, and meeting career development aspirations.

Resource management process steps

Project and services organisations often organise as a matrix. This enables project managers to focus on client delivery and satisfaction whilst Team leaders can strive for high utilisation of their staff. This demands a sophisticated resource management process:

1   Project demand management

As new projects arise, their work profiles are layered on top of the committed workload to see if unacceptable resource bottlenecks get introduced. As changes to committed projects occur, forward loading reports show periods of new bottlenecks or unacceptable under use:

Departmental bottlenecks and under use are highlighted (red and green). Drill down within each department to locate the source of each problem.

Where there is scope to move chunks of work, ‘What If..’ analysis can be used to maximise utilisation, whist retaining project delivery commitments.

2   Resource allocation

With the demand in balance with skills capacity, the search for suitable staff can commence. In matrix organisations, the allocation process typically follows the following steps:

  1.   Project managers Request their required skills and competency levels for each resource.
  2.   Team Leaders Propose a suitable resource.
  3.   Project managers compare requested skills and competencies with those of proposed resource before Accepting or Rejecting.

3   Managing project performance

Prudent project managers will measure project performance using the project plan as a yardstick to show cost and schedule variances. These compare actual effort spent (from timesheets) with an assessment of what’s been achieved, the earned value. This approach provides a credible Estimate to Complete for early warning that corrective action may be required.

Any resultant re-planning can trigger a re-run of the project demand management and resource allocation process steps.

Effective resource management tools

To support these process steps within a matrix organisation, sophisticated resource manage tools are needed, if the following benefits are to be achieved:

  1.   Appropriate visibility to everyone – senior managers, project managers and team leaders, individual resources.
  2.   A process of resource assignment and re-assignment that matches the organisations needs.
  3.   Ability to re-plan well when needed in the light of up to date information on performance and progress.
  4.   Ease of use for everyone.
  5.   Oversight that the system is being used well.

 

This article has shown who needs resource management and how it does help.

 

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.
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