In such an environment, companies must prioritize managing resources most efficiently as they are the biggest investment of almost all businesses.

This can be made possible only by having an efficient resource scheduling and management system. Such a system can reduce resourcing costs significantly, improve profitability, and help you overcome market volatility.

This blog sheds light on the business benefits of leveraging a comprehensive resource management system to boost ROI and maintain a balanced resource health index.

But first, let’s understand the resource management definition and concepts.

What is a resource management system?

Resource management is the process of utilizing various types of business resources effectively and efficiently across the enterprise. Enterprise resources include workforce, assets, facilities, equipment, etc.

The most important part of a resource management system is resource scheduling. It is the process of identifying and allocating resources to various types of activities. They are related to project work or non-project work like BAU, support, admin, operation, etc.

When scheduling is focused only on the workforce, it is called workforce scheduling. In short, workforce scheduling is the process of identifying and allocating employees to projects at a high level.

Resource allocation is an alternate word for resource scheduling. Likewise, resource allocation is the process of identifying and allocating resources to projects at a high level.

Resource management centralizes information from various systems. They are human resources, skills, current projects, future pipeline projects, resource demand/ allocation, vacations, non-project activities, etc.

This establishes a single source of truth for resource demand across the enterprise. It facilitates real-time forecasting and early warning about resource shortages/ excesses, utilization, project vacancies, people on the bench, revenue, margins, etc., so that the business can take corrective actions ahead of time.

With an understanding of resource management in project management and the various elements of the system, let’s learn about its importance in a business environment.

Importance of resource management solution

Over the last decade, resource management concepts and techniques have become a crucial part of high-performing businesses around the world. Here are the top ten reasons why these businesses have adopted this solution:

Eliminate silos of spreadsheet based schedules

Spreadsheets for resource allocations are cumbersome, very limiting, and hard to maintain. So, with the help of effective resource scheduling solutions, organizations can establish a unified source of truth.

It can eliminate silos of resource allocation spreadsheets with a single enterprise-wide resource schedule. It will keep the concerned manager informed of all resource allocations and availability. This helps your business go much beyond the basic scheduling and allocation of resources.

Build enterprise-wide visibility

An efficient business must build a bird’s eye view of all enterprise resource capacity and competencies. It also must capture every type of work activity performed by these resources. Activities can be project-related or non-project related, i.e., BAU, administrative, support, operational, vacations, etc.

Complete visibility of resources and work is the stepping stone toward efficient resource utilization.

Enterprise-wide visibility provides a comprehensive overview of key resource metrics such as demand, capacity, availability, and utilization, allowing organizations to make informed business decisions. Moreover, it facilitates the allocation of best-fit resources instead of the first available ones.

Deploy competent resources

Scheduling the right person with the right skills is crucial for a project to finish within budgeted time and cost. Skills mismatch, wherein a highly skilled project resource is assigned to a low-priority work or vice versa, can result in poor quality of deliverables and even project delays. To prevent this, organizations need robust resource management solutions.

An efficient resource management methodology can help resource managers identify and instantly allocate competent resources. It will be based on resource availability, skills, experience, qualifications, location, team, cost rate, and any other criteria the project requires.

Maximize billable & strategic utilization

Nowadays, most businesses have their employees working more than the standard hours. It doesn’t necessarily translate into improved business performance due to the employees wasting their valuable time on non-billable activities. They also could be working on non-strategic or low-priority projects.

However, an effective resource capacity planning system can help you forecast billable and strategic utilization of resources ahead of time. Accordingly, the resource manager can mobilize costly, niche-skilled resources from non-billable or low-priority work to billable or high-priority projects, maximizing the profitable utilization of the workforce.

Forecast shortfall and excess of resources

Forecasting overall resource requirements related to the project and non-project work is a critical part of capacity planning in resource management. It provides foresight into future shortages or excesses of resources across the organization.

Robust resource management can help businesses perform capacity planning and address demand gaps with appropriate resourcing treatments. As per requirement, managers can adjust project timelines, retrain current employees, or hire a contingent workforce ahead of time.

Resolve challenges of matrix management

Most businesses worldwide have adopted a matrix organization structure to utilize the resource pool efficiently and maximize profitability. This structure brings its own set of logistic and management challenges with the potential to create business chaos.

Efficient resource management tools provide the right visibility to the right stakeholders. It helps them manage resources efficiently based on the dimensions managed in a matrixed organization structure. As a result, this helps streamline operations and overcome the challenges associated with matrix management.

Reduce resourcing cost

Managing and controlling project resourcing costs is vital to maintain ROI and profitability. Enterprise-grade resource management system enables managers to ensure the skill-based allocation of resources, thus preventing the allocation of under/over-skilled resources to projects.

Additionally, it provides visibility into pipeline projects and enables them to perform capacity planning. This helps reduce costly last-minute hiring/firing cycles. Besides that, it allows firms to leverage a low-cost, global workforce. Additionally, it helps maintain the right band mix of resources for every project. These techniques help reduce project resource costs and maximize profitability.

Improve project delivery time & cost

A resource management solution enables managers to forward plan and schedule resources with the right competencies for various projects. It prevents the allocation of over or under-skilled resources and minimizes the risk of budget and project overruns, thus guaranteeing a higher quality of deliverables.

Moreover, it helps forecast and track various key performance indicators (KPIs) related to the resources and projects. This can help the business take corrective action proactively and control project delivery time and costs.

Build an optimized workforce

Building an optimized workforce is a critical aspect of project resource management, and capacity planning plays a key role in achieving this objective. Effective capacity planning in resource planning helps you forecast the gap between workforce capacity against volatile demand.

Proactive resourcing treatment can be applied ahead of time to ensure that the workforce has the right capacity to meet the demand. It includes strategies such as retraining/upskilling existing resources or resorting to planned hiring. Therefore, it helps businesses avoid costly last-minute hiring or firing decisions and maintain operational workflow.

Gain real-time business intelligence

Resource scheduling is influenced by rapidly changing business dynamics, including shifting project priorities and resourcing volatilities. These dynamics create the need for real-time reports and insights. An effective resource scheduling and management software can provide real-time business intelligence with reports, analytics, and dashboards.

These reports allow management to monitor organizational resource schedules, identify over/under allocations, and make timely adjustments to optimize their utilization. Moreover, businesses can monitor key performance indicators (KPIs), such as resource utilization rates, project progress, project financials, etc., in real time. Therefore, BI reports can facilitate data-driven decision-making.

Wrapping Up

A resource management plan plays a crucial role in organizational success as it helps businesses manage their most valuable asset- the resources. The ten reasons discussed in this blog highlight the significance of eliminating silos of spreadsheet-based schedules and building enterprise-wide visibility with a complete resource management system. By adopting effective resource management techniques and utilizing the right tools, firms can optimize their project resource allocation, enhance operational efficiency, and make better business decisions.

Unlock the true potential of your workforce and redefine business efficiency with Saviom!

The Glossary

The SAVIOM Solution

SAVIOM is the market leader in providing a futuristic solution for the effective management of resources. It has more than 20 years of experience working with high valued global companies around the world. SAVIOM also provides tools for project portfolio management, professional service automation, and efficient workforce planning. So, SAVIOM can help your business to establish an efficient system geared towards your specific business challenges.

The principles of resource management address the effective utilization of the entire workforce. An ideal Resource Management Software can reduce resourcing costs significantly, improve profitability, and help you overcome market volatility.

Unfortunately, most organizations overlook the importance of comprehensive resource management. They continue to use the following legacy systems for this purpose:

• Silos of spreadsheets built with macros
• Home-grown half-baked systems
• Windows-based systems of the 1990s
• Entry-level resource scheduling software

These legacy systems are incapable of handling the complexities of matrix organizations and provide multi-dimensional project forecasting. An organization can improve both the top line and bottom line by investing in a robust resource management solution. There are two types of benefits- tangible, which is measurable or quantifiable, and intangible, which can be realized.

In this article, we discuss some of the advantages of Resource Management.

Business benefits of resource management

A resource management plan enables organizations to manage resources effectively, anticipate and mitigate risks proactively, and ensure smooth project delivery. Therefore, its benefits in business operations are abundant and far-reaching. So, let’s understand these advantages in detail:

Reduce project resource cost

Resource management is the process of utilizing different types of business resources efficiently and effectively. These resources can be human resources, assets, facilities, and equipment. Using the right resource management strategy, companies can minimize costs and improve productivity. A few techniques used to control resource costs are: –

• Allocate the right resources to the right project at the right time with enterprise scheduling.
• Create 360-degree visibility even in a complex matrixed organization and enable allocation of cost-effective global resources from any geographical location.
• Minimize reactive planning and last-minute hiring using an advanced capacity planning facility.
• Avoid wasteful hiring/firing costs by forecasting project vacancies, people on the bench, and hot skills.

Centralize and create visibility of resource competency

The workforce planning system provides visibility of people’s information across the matrix organization structure and controls the rights to modify them. The system can achieve 360-degree visibility into all types of work demands. It could be a project, non-project, BAU/admin, and vacations across the verticals of geography, functions, domains, and business units.

Optimize resource utilization across the enterprise

Businesses can reap benefits by utilizing resources on a billable or strategic project. It is critical to ensure that the project resources are allocated and utilized in the most efficient ways. Good resource management solutions can forecast resource utilization and proactively take corrective actions ahead of time. It will also provide real-time information to improve profitable utilization.

Plan resource capacity for current and pipeline project demands

Resource capacity planning first forecasts the gap between resource capacity and demand. Then, it comes up with an action plan to bridge this gap.

It has the following advantages:

• Reduce project resourcing costs across the enterprise.
• Deploy competent employees at the right time and cost.
• Forecast skill shortage and bridge the gap proactively.
• Forecast and ensure that excess capacity is not wasted.
• Align sales and delivery by forecasting pipeline opportunities.

Leverage resource skills within matrix organization structure

Matrix organizational structure allows the sharing of highly skilled resources between functional units and projects. Communications are open, which helps knowledge circulate throughout the organization with fewer hindrances. The following steps help achieve this:

• Get the visibility of cost-effective local and global resources across the world by skills for resource allocation.
• Provide role-based access for viewing resource competencies and taking action.
• Control the project budget by utilizing generic resources from low-cost locations.
• Implement a multi-location policy if local resources are unavailable for a specific skill.
• Utilize highly skilled resources to provide training and mentoring.

Improve organization health index of resources

For a successful organization, assigning resources to the right projects as per their skill set and experiences is essential.

Self-development, learning new skills, and keeping up to date with current technology trends motivate them. If they don’t receive the right opportunities from their resource managers, they end up spending much time on the bench. Consequently, their billable utilization suffers, and they may end up leaving the organization.

In a comprehensive resource management system, individualized portals, dashboards, and reports with powerful business intelligence allow decision-makers to monitor the overall health index of resource ecosystems.

• Build tailored portals, dashboards, analytics, and reports using highly configurable and expandable architecture.
• Control data visibility with a combination of security rights, portal designs, and filters.

Future proof your workforce against market volatility

Market volatility in the last few years is continuously impacting the business outlook of every organization. With the sudden outburst of the Covid-19 pandemic, it is getting harder to predict an organization’s growth and profitability.

In such conditions, most firms resort to reactive measures such as abrupt layoffs and halting new initiatives. It works in the short term but affects business sustainability adversely.

A functional capacity planning process that consists of the following steps will prepare you for an adverse situation:

• Bridge resource shortage proactively.
• Forward plan and utilize excess organizational resources.
• Build on-demand or contingent workforce.
• Reduce project resourcing costs across the enterprise.

Simulate before adapting using what-if analysis

What-if analysis helps to get the best possible ROI within existing resource constraints. It allows you to juggle around the resources and adjust the project’s timelines. Before making any decision, a critical analysis of the impact on resource capacity and utilization can be made. Some of the steps followed in the simulation techniques are:

• Build different scenarios (ideally three) for the current situation involving multiple projects.
• Simulate each scenario at a time and apply the available resource from the pool for the specific case.
• Carefully analyze different parameters such as overall utilization, people on the bench, and project overdue, if any, caused by resource allocation.
• Select the best scenario and apply it to the project schedule.

Deliver projects and services within time and budget

There are two primary components for measuring project success. Timely delivery and no budget overrun.

Effectively managing resources helps companies more consistently meet these two objectives. Project managers estimate different tasks keeping the resource capabilities in mind with the help of a project resource management tool. They can work together with a resource manager to identify competent resources for project activities and ensure that projects are delivered on time and within budget.

If an under-skilled resource gets the responsibility, the person takes more time than needed, which affects the timeline. At the same time, if a high-cost project resource is assigned the task, it will blow up the budget. The following guidelines can serve as an indicator of successful project delivery:

• Minimize under/over skilled-resources
• Use cost-effective resources wherever applicable
• Invest in the self-development of resources
• Identify resource shortfalls/excesses in advance

Improve employee and customer satisfaction

An employee consistently working overtime can be at risk of being unproductive or can leave the organization. The resource management system displays resource loading in real-time, ensuring that the person is not overworked or underutilized. Resources also have their aspirations and development plans, which can be accommodated in project resource planning.

On the other hand, achieving customer satisfaction is possible if the organization meets its project delivery commitments. The project’s success very much depends on the resource quality.

An ideal resource management tool is an enabler to achieve these two objectives.

Conclusion

Whether it’s project resource tracking, optimizing workforce utilization, improving project outcomes, controlling resource costs, or driving strategic growth, resource management offers a wide range of business benefits. It empowers companies to make the most of their valuable organizational resources, adapt to change, and thrive in dynamic environments.

Incorporating robust resource management tools and best practices should be a priority for any business looking to future-proof its workforce and achieve long-term success. Therefore, by recognizing the importance of resource management in project management and harnessing its benefits, firms can pave the way for a prosperous future and secure their position in today’s competitive marketplace.

Are you ready to invest in the right resource management tools to manage resources profitability?

The Glossary

The SAVIOM Solution

SAVIOM is the market leader in offering the most powerful and configurable solution for managing your enterprise resources effectively and efficiently. With over 20 years of experience, this Australian-based MNC has created its global presence across 50 countries and helped more than 100 customers achieve their business goals. SAVIOM also has products for project portfolio management, professional service automation, and workforce planning software that is customizable as per business requirements.

Well, resource management plays a crucial role here. It provides enterprise-wide visibility that facilitates managers to foresee the resource demand and risks within projects. It also helps in future-proofing the workforce by providing data-driven insights for timely decision-making.

In addition, implementing resource management techniques into PPM help organizations use resources more effectively and improve the health of the overall project portfolio.

This article will explain how resource management can help in defining the future of PPM in detail.

Let’s begin by briefly understanding the objective of project portfolio management.

What is the purpose of project portfolio management?

The ultimate objective of PPM is to forecast future opportunities, evaluate the potential of every portfolio & project and formulate a plan to manage them efficiently. That way, the organization becomes nimbler and more responsive to the constantly changing demands.

According to PMI, “Portfolio framework is designed to manage multiple portfolios across the enterprise and meet long-term objectives through efficient decision-making on portfolios, programs, projects, and operations.”

The main emphasis of PPM is to ensure that the portfolio’s outcomes support the organization’s long-term goals. It sets out a methodology to predict potential problems, review progress toward strategic goals, and make the most efficient use of resources. It also helps project managers to control the budget, address stakeholder issues, etc.

Given the objective of the PPM strategy, let’s now understand what the future landscape of PPM will look like.

What will be the future landscape of PPM?

The influence of the digital revolution on every aspect of Project Portfolio Management (PPM) has been substantial.

According to research and markets, the global demand for PPM is anticipated to increase by USD 1.6 billion by 2024.

Digital disruption is transforming the PPM landscape from analog information, annual planning, manual processes, and traditional delivery methods to agile, data-driven business processes for efficiency and innovation. In simple words, traditional PPM methods come with siloed data and disparities in resource productivity, visibility, and collaboration. At the same time, modern PPM fosters efficient management of projects and resources. It also enhances work automation and collaboration that empowers resources to do the right work profoundly.

Today, managing enterprise resources has become a fundamental skill in PPM. Project managers need to evaluate resource needs across multiple projects in advance. They must use allocated resources productively while ensuring resources are neither over- nor under-allocated. For this reason, resource management becomes a key factor in PPM.

That being said, PPM is the foundation of the project management ecosystem. Therefore, project managers must repeatedly touch base with existing strategies and evolve exponentially. If not, they are likely to face challenges. Let’s look into the details here.

Some resource management challenges faced in PPM

Today businesses are expanding their geographical boundaries, and hence resources from different locations are working cohesively. Therefore, it is not feasible for managers to manually keep a tab on every project team and their productivity. The majority of resourcing constraints arise when organizations do not have a dedicated tool or sometimes when they don’t use it the right way.

Some of the most common challenges of resource management in project management:

Lack of visibility against evolving demands

Many organizations often lack clarity into the future resource capacity and demand as well as other metrics like resource availability and utilization. This poor visibility restricts resource managers from procuring the right resources at the right time and hence resort to unplanned hiring activities. It leads to eleventh-hour hurdles and causes budget and schedule overruns.

Project failure due to improper resource allocation

During scheduling resources, managers must ascertain that the resources are assigned to tasks as per their skills and competency. If not, it will have an adverse effect on the project delivery. It will lead to resource wastage and ultimately derails projects off their track.

Inappropriate resource requisition workflow

In many organizations, new projects with resource demand emerge every now and then. So, the absence of automated resource requisition workflow could lead to conflicts among managers for the same resource. For example, project managers resort to endless trails of emails in the absence of legitimate software. As a result, critical projects get delayed and decline in profitability.

Lowered employee productivity due to overutilization

Allocating resources on a whim without analyzing their existing bookings and priorities can be troublesome. Managers might end up double-booking the resources for multiple projects or activities. It will lead to the overallocation of resources, resulting in lowered employee productivity and project quality.

Decrease in profitability due to budget overruns

Inaccurate project estimates, poor capital management, and hiring high-cost resources can all lead to budget overruns in a project. It not only causes financial loss for an organization but also affects a firm’s profitability severely.

Inappropriate risk management framework

In relation to resource risk assessment, many organizations have an inaccurate risk management framework. Therefore, managers find it challenging to mitigate risks efficiently. This negatively affects the overall health of projects and eventually leads to business failure.

Keeping these challenges in mind, let’s see what role modern resource management plays in mitigating these resource-centric challenges well in advance.

Role of futuristic resource management software to support PPM

Resources are the greatest asset of an organization that drives the projects to success. Therefore, it is vital for project governance teams to keep their efficiency and performance at their best. However, how can they manage resources dispersed across departmental and geographical boundaries?

This is where a project resource management solution supports PPM. Here’s the list:

Efficient resource planning with what-if analysis

Modeling and simulation techniques enable managers to build scenarios and derive the best possible outcome. One can compare the changes made in each scenario on various project finances such as budget, revenue, and ROI before applying the viable option to the actual resource plan.

Replace silos of spreadsheets with real-time scheduling systems

With robust resource management tools, managers can replace silos of spreadsheets and get unmatched visibility of resource capacity and their skill set. Based on this information, managers can then schedule resources for the right job at the right time.

Introducing a well-defined resource requisition workflow

An automated resource requisition and workflow help project managers raise a request in a timely and systematic manner. Depending on that, resource managers can fill the open positions based on project priority. Moreover, the tool minimizes internal conflicts for critical resources and helps to foster a shared service model effectively.

Reduce disparity in data with embedded business intelligence

Effective resource management software is integrated with business intelligence that derives information from the data and provides intuitive reports in real time. These insights also help in project budgeting, portfolio coordination, ROI, and forecasting, all of which contribute to better decision-making on your project portfolios.

Replace mundane/BAU activities with automation

Automation helps resource managers to mobilize team members from non-billable/low-priority work to billable/high-priority one and improve profitability. The resource management software redefines the process and achieves progress with less mundane or business-as-usual work..

Manage resource risks with adaptive governance styles

Reporting tools can be customized to automatically capture risk data and predict project outcomes for a variety of worst-case scenarios. It allows managers to foresee potential resource risks and implement different governance styles.

Enhanced Inter-departmental coordination with collaboration features

Collaboration features in project resource management tools provide a cohesive platform to all team members and foster greater insights into project updates and progress on a day-to-day basis. It streamlines effective communication across the enterprise. Alerts and notifications displayed on the discussion board also ensure you don’t miss any critical updates.

Futuristic trends in project portfolio management

As digital forces continue to affect PPM, there’s no question how it reduces and streamlines human intervention and automates repeatable processes. Below mentioned are a few newly emerging trends that are likely to grow and expand in the near future.

Digital transformation of business

The adoption of various digital technologies into the PPM tool is such that it caters to evolving business demands such as agility and innovation. It focuses on the effective use of digital technologies to automate work operations and resources.

Key changes in resource allocation strategy

Resource management software can help match resource supply with business demand allowing resources to work on higher productive level tasks. AI-enabled automated resource scheduling will use historical data and automatically create and optimize resource scheduling. It will also help to deploy the key resources across multiple projects instead of assigning them to a high-priority one while keeping a check on resource overloading and potential conflicts.

Restructuring of existing process by PMO

The PMO is restructuring to increase corporate revenues and enhance corporate functions. For example, IT has conventionally assessed its performance by determining if a particular application has been launched live on the intended date or within the budget. But today, the restructuring of the process focuses on the project that drives better business ROI for organizations.

Growing business demand for adaptive & agile development

Perhaps to offer products or services to market more promptly while keeping quality standards high, companies must embrace agile practices and utilize cross-functional teams. PPM will turn to a more iterative approach focused on fine-tuning its project deliverables.

The shift to remote work culture

As COVID situations and other factors change the nature of work, companies are placing greater emphasis on remote team communication and collaboration. Therefore, it is essential to leverage the remote team’s expertise while aiming for operational excellence and constant innovation.

Conclusion

The ever-growing market volatility in recent years is continuously impacting the viability of every business. Therefore, implementing a comprehensive project resource management plan along with a modern resource management solution that supports the PPM strategy is crucial. It will help to create the optimal resource mix and schedule project activities to best achieve an organization’s strategic and financial goals efficiently.

What resource management best practices do you implement to manage resourcing bottlenecks?

The Glossary

The SAVIOM Solution

SAVIOM is the market leader in offering the most powerful and configurable solutions for managing enterprise resources efficiently and effectively. Having more than 20 years of experience, this Australian-based MNC has a global presence in over 50 countries. It is also popular with more than 100 customers and helping them to achieve their business goals. SAVIOM also has products for project portfolio management, professional service automation, and workforce planning software which can be easily customized as per business requirements.

Most of these firms are still fighting the challenges of the 2020s using tools developed in the 1990s. They are simply outdated, inefficient, and not helping businesses achieve sustainability and profitability.

An ideal Resource Management Software can significantly reduce resourcing costs, improve profitability, and help you overcome market volatility.

It will substantially reduce project resource cost, increase billable/strategic utilization, beat market volatility, and more.

Over the years, matured organizations have established well-defined practices and frameworks around resource management for business efficiency. A useful resource management tool helps implement these frameworks and methods. It also helps realize the advantages of the resource management process for the organization.

This article discusses some of the Resource and Workforce Management best practices, followed by high performing organizations.

Best practices of resource management

Strategic resource management is key to realizing long-term business goals and objectives. Without it, managing resources across numerous projects becomes a herculean task.

Enlisted below are the best approaches that organizations can adopt for seamless enterprise resource management:

Centralize and streamline resource scheduling and planning

Resource and Workforce scheduling is the most crucial part of the resource planning process. The benefits of resource scheduling can be realized with appropriate resource planning and scheduling tools.

• First, consolidate all resource-related information within a shared repository to give a single version of truth for the entire organization. Make an informed decision on resource allocation using this centralized data with a suitable resource allocation tool.
• Identify available resources with the matching criteria and assign them to the specific time-bound activities. They can be related to project or non-project work such as BAU, Support, admin, operation, and more.
• Gantt chart view will ensure that there is no double-booking of the same resource. It causes a lot of pain and re-work.

Allocate right resource for the right project at the right time

Project resource selection is an essential activity as it has a cost implication. Most organizations are under pressure to maintain delivery quality with shrinking budgets.

• Avoid the “first available first fit” approach and use “best visible best fit” for resource allocation. Resource availability should be visible in real-time to make such a decision. An ideal resource allocation tool will help make this decision effectively in real-time.
• Prioritize your projects. Distribute your best resources across the projects rather than assigning them to a single high priority project. It will establish a fair resource talent management process.
• Verify If a low-cost resource is available to perform the same task without compromising the quality. In that case, reassign the high-cost resource for other important work where his/her skills are better utilized.

Forecast and maximize billable/strategic resource utilization

A resource is useful if he is working on a billable or strategic project and fully utilized as per his capacity. The cumulative profitable utilization of all its employees determines the efficiency of an organization. To optimize overall utilization:

• Forecast future billable and strategic resource utilization.
• Have a structured plan to move resources from non-billable work to billable work. It will help you reap the benefits of resource utilization.
• Proactively market and sell excess capacity. It will increase resource efficiency.
• Make this process efficient with the help of enterprise-level resource utilization software. It will also help in resource optimization and balance resource loading.

Forecast resource shortages/excesses and bridge the gap

Workforce capacity planning helps in identifying skill-shortages ahead of time so that you can take corrective actions:

• Adjust project timelines to align with available capacity.
• Retrain and skill up available employees ahead of time.
• Utilize a contingent workforce for short term assignments.
• Optimize Bench Management. Provide a “shadowing” opportunity for bench resources within billable projects.
• One needs a useful resource capacity planning tool to implement a proper resource acquisition process.

Forecast and plan for pipeline projects

Pipeline management has two goals – to build a healthy pipeline and to win more deals. Besides, pipeline or future projects need to be delivered on time and within budget. For that, you need to do appropriate project resource planning to complete them.

• Create a schedule for a pipeline project once it reaches a certain probability.
• Assign generic or ghost resources to the pipeline project to make the assignment complete.
• Search the organizational resource pool for a match and replace the generic resource with an actual resource.
• In case matching resources are not available, create a plan that fulfills open positions. Achieve this using different channels such as hiring or using part-time / contingency resources.
• You will need a proper resource planning and forecasting tool to manage resources across multiple activities/tasks.

Minimize project resource cost with a mix of local and global resources

With globalization, a plethora of multinational companies has expanded their facilities and other assets in several locations. It has made global resources from low-cost countries accessible. It also helps in planning resource leveling and resource smoothing related activities for different projects.

• Minimize the project resource cost by utilizing commonly available resources from low-cost locations.
• Implement a multi-location policy if local resources are not available for a specific skill.
• Utilize highly skilled resources to provide training and mentoring.

Create visibility across the matrix organization structure

The matrix organizational structure is a solution to the problem of managing large and complex projects. Multiple reporting in a Matrix structure allows resources to work on numerous projects of varying duration.

• Centralize the resource pool to create a 360-degree view for a matrixed organization structure.
• Get the visibility of cost-effective local and global resources across the world by skills for resource allocation.
• Provide role-based access for viewing resource competencies and taking actions.
• Utilize niche skilled resources to implement a shared services model for maximum productivity.

Avoid wasteful hiring/firing cost using resource capacity planning

Capacity vs. Demand is the process of forecasting resource shortages or excesses by analyzing gaps between resource Capacity against their Demand.

The gap in resource demand can be measured in hours or Full-Time Equivalent (FTE), or Person days. It helps plan the hiring related activities or come up with an alternate strategy for using contingency resources.

• Decide your future requirements using effective capacity planning. Allow sufficient lead-time to avoid last-minute activities. Use an appropriate resource forecasting tool for this activity.
• Do not compromise on the quality of new hires because of time constraints. Avoid last-minute routines to save additional costs for hiring.
• Avoid hiring/firing cycles by creating an appropriate resource mix consisting of consultants and freelancers, and regular employees.

Gain real-time business intelligence using a digital dashboard

All resources, projects, and bookings data are consolidated within a single repository. So, it is possible to build individual portals, dashboards, and reports, using business intelligence principles. As a result, organizations can facilitate effective management of resources and fast-track decision-making with real-time data.

• Build tailored portals, dashboards, analytics, and reports using robust resource management software. Use this information diligently to future proof your business requirements.
• Control data visibility with a combination of security rights, portal designs, and filters. Allow an end-user of the system to see its relevant information as per his or her role.

Empower employees and improve productivity

Research has indicated that the employees are more productive and engaged if they are fully empowered to carry out their responsibilities. Human resources are critical assets for most professional services organizations, and they need looking after.

• Minimize productivity and capacity loss by controlling unplanned attrition and workforce turnover.
• Take necessary measures so that a critical resource does not leave the organization in the middle of an important project. In case it is inevitable, do succession planning in advance.
• Provide suitable opportunities to organizational resources as per their qualifications and experiences to keep them motivated.
• Do not overload the resources by providing them with work beyond their capacity or availability.

Conclusion

Adopting the aforementioned resource management best practices is key to driving business efficiency. By investing in the best resource management software, organizations can cultivate a culture of transparency, accountability, and continuous learning to empower their team and foster innovation. These best practices will not only optimize how you use your resources but also position your business for long-term success in a competitive landscape.

Embrace the power of effective resource management and unlock the full potential of your organization with Saviom.

The Glossary

The SAVIOM Solution

SAVIOM is the market leader in offering the most powerful and configurable solution for managing your enterprise resources effectively and efficiently. With over 20 years of experience, this Australian-based MNC has created its global presence across 50 countries and helped more than 100 customers achieve their business goals. SAVIOM also has products for project portfolio management, professional service automation, and workforce planning software that is customizable as per business requirements.

It’s imperative for organizations to streamline critical resource-centric functions such as capacity planning, resource allocation, and utilization tracking to make every project successful. Any disruption can cause issues such as budget overruns and project delays, resulting in client dissatisfaction.

This is where the role of a resource manager becomes critical for the success of any organization. They ensure that the right resource is allocated to the right project and not overutilized.

This blog discusses the characteristics of a successful resource manager. But first, let’s start by defining:

What is a resource manager, and why are they important?

A resource manager is responsible for allocating all the resources under their span of control to various projects. These resources can be human resources, assets, equipment, facilities, etc. For a large organization, the average number of resources under a resource manager’s span of control can vary from 200 to 500.

Typically, when a project manager raises resource requests, the resource manager assesses the enterprise resource pool. They then allocate the best resource matching the demand criteria of the project.

Besides competent allocation, a resource manager also ensures improving productive utilization, bridging the skill gaps, effective bench management, etc.

Resource managers play a vital role in project success, and by extension, they contribute significantly to organizational success. They support a firm’s strategic objectives and goals by facilitating the following functions:

Resource planning and demand forecasting:

Resource managers work closely with project managers and department heads to develop resource plans and forecasts to determine project resource needs. This proactive planning ensures that the right resources are available at the right time, minimizing bottlenecks and avoiding resource shortages.

Efficient resource allocation:

Resource managers allocate resources effectively to various projects, departments, and teams. They ensure that human and non-human resources are distributed in a way that maximizes productivity and minimizes waste. This efficient allocation helps in achieving organizational goals within budgetary constraints.

Resource optimization:

Resource managers oversee, track, and optimize resource utilization. They identify under/overutilization and take corrective actions to mitigate it. By balancing workload distribution, resource managers improve profitable utilization and workforce productivity.

Conflict resolution:

Resource managers often face challenges related to resource conflicts and competing demands. They mediate disputes arising from overlapping resource requirements and negotiate compromises or alternative solutions. Their role involves prioritizing projects, resolving resource clashes, and maintaining a fair and equitable distribution of resources across the organization.

Performance monitoring:

Resource managers monitor resource performance and evaluate the effectiveness of resource allocation strategies. They analyze key resource metrics, such as resource capacity, availability, utilization, etc., to identify improvement areas and optimize strategic decision-making.

Risk management:

Effective resource management involves identifying and mitigating resource-centric risks. Therefore, resource managers proactively assess potential risks, develop contingency plans, and ensure backup resources are in place. This enables the organization to minimize disruptions and maintain operational workflow.

Cross-departmental collaboration:

Resource managers act as a bridge between different teams, departments, and stakeholders within the organization. They facilitate communication and collaboration by sharing resource-related information, coordinating resource needs, and resolving conflicts. This promotes synergy among various parties and ensures successful project delivery.

In summary, their efforts contribute to effective planning, improved performance, and the overall success of projects and initiatives.

Next, let’s learn about the consequences of not hiring a resource manager.

What can go wrong if businesses don’t invest in resource managers?

The success of every project depends on the resources that are allocated to the tasks. Resource managers are responsible for the efficient allocation of resources. Furthermore, they deploy those resources based on their capacity, skills, and experience.

Thus, if companies don’t invest in resource managers, it may result in sub-optimal resource allocation and planning. Ultimately, it will lead to project failures, hamper the company’s reputation, and result in client dissatisfaction. Moreover, resource managers ensure that resources are utilized on billable or strategic work at all times. When a resource gets rolled off from a project, the resource manager acts proactively and assigns him to suitable work before he/she hits the bench.

Lastly, resource managers forecast the future availability of resources and bridge the resource gaps in advance. They identify the shortage/excess of resources and take appropriate measures to fulfill the demand. In the absence of resource managers, businesses may face lost market opportunities and find it hard to sustain amid market volatility.

In a nutshell, the whole resource management structure will get negatively affected if businesses don’t invest in resource managers. Modern resource management software helps resource managers streamline their responsibilities and enable companies to gain a competitive edge.

Let’s learn about the key responsibilities of a resource manager within an organization.

What are resource manager’s responsibilities?

A resource manager needs to fulfill certain key responsibility areas to execute the above-mentioned activities and prove their mettle.

Here’s a rundown of the essential resource manger responsibilities.

Assigning resources to projects as per competencies and skills

Every project demands different skill requirements, and misalignment in resource competencies and demand can impact its quality or timeline. For example, assigning a critical or highly specialized resource to a routine task causes budget overrun, lower engagement, and productivity. On the contrary, allocating an under-skilled resource to skill-intensive tasks hampers the project’s progress and delays the deadlines.

Thus, the vital role of a resource manager is to diligently assess each project’s requirements, resource availability, skills, and competencies so that allocations align with the attributes of resources. It allows them to achieve competent allocation and eliminate future project bottlenecks.

Helping project managers with resource capacity planning for pipeline projects

A resource manager has to coordinate with the project manager to stay abreast of future resource requirements for pipeline projects. They first foresee the resource demand and assess the available capacity to find any existing gap between them. In case of shortage or excess of resources, they can proactively implement certain resourcing treatments.

They can analyze on-the-bench reports, implement the out-rotation and backfill strategy, or go for planned hiring to proactively fill the project vacancies. In case of excess capacity, the resource manager can request the project manager to bring forward project timelines or organize training programs for upskilling of employees. They can also collaborate with various functional managers and allocate resources to cross-disciplinary projects. In some cases, RMs can sell the excess capacity to external organizations.

Tracking resource utilization, workload, and overtime

The onus lies on resource managers to maintain the resource health index. Thus, they have to track utilization levels to ensure that every resource works on billable or strategic projects. Another job that falls under their responsibility areas is evaluating their workload and distributing it uniformly to prevent over/underutilization.

If resources are overutilized, RMs can pull in more resources to redistribute the work, make utilization levels uniform, and prevent employee burnout. For underutilized resources, finding some billable or strategic work to assign them to can help enhance productivity.

Collaborating within departments for resource requirements

Although resource management is an independent discipline, it demands coordination between resource managers and other leaders or supervisors of the organization. For instance, to understand the project demand and objectives, a resource manager has to collaborate with project managers or PMOs. Otherwise, it will become arduous for them to find the ideal fit for the job.

They also have to stay in constant touch with PMOs to understand the project’s criticality before the fulfillment of requests. Moreover, to bridge skill gaps or resource crunch, they have to coordinate with HR managers to streamline the recruitment process. They also coordinate with RM to initiate suitable upskilling programs.

Creating a learning and development roadmap for resources

“Gartner’s recent research reveals that 58% of the global workforce needs new skills to get their jobs done.”

This stat highlights the value of constant training and upskilling of resources in retaining a competitive edge and high productivity.

A resource manager, thus, has to stay updated with evolving industry trends and skill demands. It is also vital for them to take resources’ personal interests and aspirations into account.

Accordingly, they must identify skill gaps and formulate a personalized learning and development program to future-proof their workforce. This way, they avoid frequent hiring and firing, save resource costs, and boost employee engagement and productivity.

Effectively manage bench and implement corrective measures

Bench refers to employees who are not allocated to any project, which means they are non-billable but on a company’s payroll. A resource manager needs to constantly track bench size using a resource management tool to ensure it doesn’t exceed the threshold. If resource managers foresee project ramp-downs, they have to find suitable project vacancies to allocate them before they hit the bench.

Besides, they also implement appropriate resourcing treatments such as training or upskilling for the benched resources to utilize them effectively. Additionally, providing shadowing opportunities to engage freshers and assigning senior employees to strategic work or training juniors falls under the radar of resource managers’ responsibilities.

To accomplish these KRAs, resource manager needs to equip themselves with appropriate professional management skills.

Here are the most important ones.

Skills required to become a successful resource manager

Resource managers need to be equipped with essential management skills to perform their duties effectively. Let’s take a look at the basic human resource management skills necessary to be a proficient resource manager.

High-level domain knowledge

Though there is no fixed criterion for it, a basic level of domain knowledge is helpful. It helps a resource manager relate to the basics, technologies involved, areas of application, and more for a particular industry. A seasoned resource manager can sometimes switch to even another industry with some basic training and conceptual learning.

Having said that, in-depth knowledge of a particular industry is highly beneficial – especially for someone looking to start their career in resource management. Let’s say a software developer with over ten years of experience wants to become an IT resource manager. They will definitely get the advantage of that knowledge of the nitty-gritty of the software industry and excel at their performance.

Task prioritization and quick decision-making

A resource manager must exhibit the acumen to prioritize projects based on return on interest, value proposition, and other factors. Critical resources, if allocated to a low-priority project or a less skill-intensive project, will increase costs. Conversely, their absence in high-priority projects may lead to compromised quality and client dissatisfaction.

So, a resource manager must streamline the allocation of highly skilled or experienced resources to projects. Besides, they should be able to make prompt decisions on using suitable resourcing measures to fill significant gaps in capacity vs. demand.

Proven experience in resource planning and management

Resource managers must have a proven track record and sufficient experience in the resource management space of a specific domain. They must have in-depth knowledge of critical components like resource planning, pipeline project planning, etc.

It is also indispensable for a resource manager to be proficient in tracking resource utilization levels to identify any instances of over/underutilization and take measures and eliminate them.

Monitoring, reviewing, and controlling resource metrics, including bench aging, fill rate, project vacancies, etc., is one of the prime responsibilities of RM. Moreover, the ability to understand and handle the complexities involved in a matrix organization is equally necessary.

Quick problem-solving and negotiation skills

Key resources are often in high demand across different projects within an organization. Hence, resource managers must equip themselves with management skills such as quick problem-solving skills to resolve power conflicts between project managers. For example, let’s assume that two projects are starting simultaneously, and both project managers request the same-skilled critical resource. In this scenario, the RM will first assess the project’s priority and allocate the resource to the one that takes precedence.

Then, to fulfill the other project’s demand without creating conflict, they can negotiate with the respective project manager. They can explain how a less experienced resource with a similar skillset can do the job well. Similarly, they can equip negotiation skills in different scenarios to minimize conflicts, fulfill requests, and provide fair opportunities to less experienced resources.

Excellent communication skills with resources and stakeholders

As resource managers are responsible for fulfilling resource requests, possessing excellent communication skills is a must-have management skill for them. It helps them understand the resource requirements of a project manager and convey them to the resources better.

It is crucial for them to identify different resource-related risks like prolonged absence, unplanned attrition, skill gaps, etc. Then, they must convey these risks to stakeholders effectively and prepare a backup plan to mitigate them.

Hands-on experience with resource management tools

Managing resources effectively – especially when working in a large firm, is not possible without a resource management tool. The tool gives 360-degree visibility of resource allocation and multi-dimensional views for resource managers, project managers, etc. It also allows planning, resource forecasting, capacity planning, and scheduling.

Besides, real-time business intelligence reports and dashboards enable data-driven quick decision-making, which helps improve the resource health index. For RMs to perform at their best, it’s imperative to have hands-on experience in resource management tools.

The aforementioned management skill sets are critical attributes that every good resource manager should possess in order to perform their primary roles and responsibilities.

Now let’s take a look at the KPIs that are commonly used to measure the performance of resource managers.

How to measure the performance of a resource manager?

A resource manager’s performance depends on how efficiently they fulfill their key performance indicators (KPIs).

The following are the primary KPIs to fulfill for a project resource manager.

• Billable utilization:

Billable utilization of every resource falling under a resource manager’s span of control is one of the main KPIs. The percentage of the resources’ available capacity utilized for billable and strategic work determines their performance.

• Bench size:

Bench size keeps increasing or decreasing according to constantly changing resource demands. A good resource manager must keep the bench size within a fixed percentage of the available capacity or minimize it.

• Bench aging:

The number of days a resource is on the bench is called bench aging. Ideally, the bench aging is 0 days. However, in practical scenarios, it should not exceed 90 days. If it exceeds, it indicates an issue with the resource manager’s performance.

• Fill rate:

The fill rate is measured to determine how efficiently a resource manager can fulfill the resource demand on or before the project begins. If a resource manager assigns the resource as per the demand on or before the start date, the fill rate is considered 100%.

• Individual development program (IDP):

Every resource has their personal development goals and aspirations regarding their career. It is, therefore, vital for a resource manager to give them enough opportunities to hone soft skills and other technical skills in their respective domains. A resource manager’s performance also depends on how well they cater to everyone’s aspirations and let them advance their career.

Conclusion

As resources are the key investments of a firm, tapping into their maximum potential is highly important. That’s why resource managers are an integral part of determining project and organizational success.

The primary objective of a resource manager is to increase an enterprise’s profitability and sustainability by maximizing the workforce’s profitable utilization and future-proof it to lead the competitive world.

One can become an efficient resource manager by understanding the key responsibility areas and refining the above-discussed resource management skills.

Do you have the skills needed for human resource management? What would your approach be to becoming a good resource manager?

The Glossary

The SAVIOM Solution

SAVIOM has over 20 years of experience helping multinational clients manage their resources efficiently and effectively. With over 20 years of experience, this Australian-based MNC has a global presence across 50 countries and has helped 100+ clients meet their specific business goals. Saviom also provides tools for project portfolio management, professional service automation, and workforce planning software. So, SAVIOM can help your business to establish an efficient system geared towards your specific business challenges.