Organizations and their project management offices (PMOs) follow different strategies for resource planning across multiple projects. However, when the project resource plan is developed based on the project scope, complexity, and financials, it becomes a challenge for managers to manage multiple projects simultaneously.
Having the right resources for suitable projects at every stage is crucial for the overall efficiency and success of the company.
There is a constant struggle to find the best solution that will align with each project goal and balance resources between the projects. Often managers have to run from pillar to post for competent resources to deliver their projects on budget and within time.
With a strategic resource management approach, managers can improve each project’s outcomes, productivity, and profitability.
In this article, we have discussed some of the best practices that can help in resource planning across multiple projects seamlessly.
Importance of resource planning across projects
Formulating an intelligent project plan requires accurate information on every resource attribute, from skills and core competencies to their utilization and availability. These insights allow managers to develop high-level resource planning within the allocated project budget.
It will also help them enhance productivity and ensure the project’s success by facilitating the appropriate allocation of the right resource to the right project in the right capacities.
Timely project delivery
Proactive resource planning in project management allows managers to assess the capacity vs. demand gap in advance and bridge it with appropriate resourcing measures. Furthermore, the effective distribution of competent resources in project management ensures that no under or over-skilled resources are allocated to projects.
Over-skilled resources can spike project costs, and under-skilled ones can cause severe delays. Therefore, proper resource allocation helps to maintain the project quality and consistent delivery of services on time and within budget. project quality and consistent delivery of services on time and within budget.
Increased profitability
Resource demand forecasting facilitates planned hiring, which helps to reduce last-minute hiring/firing costs. Managers can implement suitable resourcing measures to identify and allocate competent and cost-effective global resources across matrix boundaries. It will enhance profitability by reducing project resource costs significantly.
Improve client satisfaction
The satisfaction of clients depends on how effectively the organization meets their expectations. It is considered a success when projects are delivered with quality services, on time, and within budget. on time, and within budget, it is considered a success.
Effective resource scheduling allows you to maintain the quality of deliverables and increase the company’s image.
Now that you’ve understood the essential benefits of planning resources effectively let’s learn about the various types of projects and resources:
How are projects and resources classified?
Resources and projects are regularly reviewed to maximize productivity, and the right type of workforce is deployed for every project.
The below section describes a classification of the different types of workforce deployed on projects:
Types of human resources:
Depending on the project requirements, the manager hires different types of resources, such as permanent employees, contractors, or freelancers.
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Permanent employees (full-time & part-time)
Permanent employees can be full-time and part-time resources and are often perceived as a cost-effective solution for any business. In addition, their productivity and contribution to meeting business objectives are higher due to their participation in any or all of the internal and strategic works.
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Contractual or contingent workforce
On-demand or contingent workforce is beneficial for businesses facing workload volatility due to changes in market conditions. In addition, a contingent or contractual workforce is considered helpful for short-term assignments as they have fewer overhead costs than full-time resources. Often the project managers utilize contractual resources at a higher price but have no liability to maintain them once the task is accomplished.
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Freelancers
Freelancers are hired for a specific work period with more work schedule flexibility. They are often employed for particular expertise or niche skills on a project at hourly or daily rates. Hiring freelancers is a cost-cutting strategy many businesses use as they cost less to the company in terms of training and other overhead costs.
Workforce in a matrix organization:
In a matrix organizational structure, employees have more than one line of reporting managers. This structure offers flexibility to businesses where resources with expertise can work across various departments and projects within the organization. Below is the resource classification in matrix organizations:
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Local resources
A local resource is limited to a specific location within the local infrastructure of the project. Local resources have the advantage of being in the proximity of the business, and they can build a better relationship with the key personnel of the client organization.A local resource is limited to a certain location within the local infrastructure of the project. Local resources have the advantage of being in the proximity of the business and they can build a better relationship with the key personnel of the client organization.
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Global resources
A global resource is known to exceed the system of the project location as it can be accessed from multiple locations through a global resource management model. It aims to have a centralized repository of a worldwide resource pool having diverse skill sets. As a result, companies can utilize skilled resources from cost-effective locations.
Project managers use the Nearshore and Offshore outsourcing model to program the expertise needed for any project.
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Nearshore model:
This outsourcing model refers to the resources in neighboring countries with similar time zones. As an example, the nearshore location for the US would be Mexico.
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Offshore model:
The offshoring model refers to outsourcing to resources located far away with considerable time zone differences. An example of an offshore location for the US would be India.
Different types of project:
Understanding the various types of projects is essential for planning and scheduling the resources for the right task. The project type is determined by parameters such as cost, duration, resource requirements, complexity of the projects, etc. Here are the two different project types:
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Small scale project
A small-scale project is characterized by factors such as short duration, a small team, and the budget size of the project. A single project manager can handle one or more such projects simultaneously. Here resources are assigned for multiple tasks and aim to deliver outputs over shorter time scales.
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Large scale project
Large-scale projects, on the other end, are characterized by the complex nature of the project, such as longer duration, larger teams, and a bigger budget. As a result, multiple project managers are seen managing large-scale projects headed by the Delivery Project Executive (DPE). The DPE demonstrates a complete understanding of client requirements and supports various project teams to meet their expectations.
Knowing the classification of project resources, let’s understand the roadblocks of resource planning across multiple projects.
Challenges of resource planning across multiple projects
Below we take you through the challenges that add complexity to managing the resource pool across multiple projects.
Poor visibility due to siloed data
The use of legacy tools and silos of spreadsheets across enterprises results in poor visibility and a lack of real-time updates. In this case, managers often allocate resources without complete knowledge of their competencies and existing bookings. This improper resource allocation leads to double bookings and over-utilization of resources.
A traditional resource requisition protocol
The traditional resource-requesting method brings in a lot of complexity and challenges in the form of double booking, internal conflicts, discrepancies, etc. In addition, the manual resource requisition process involves physically sorting out resources and taking calls/email requests from multiple project managers, which is time-consuming and cumbersome. method brings in a lot of complexity and challenges in the form of double booking, internal conflicts, discrepancies, etc. The manual resource requisition process involves manually sorting out resources and taking call/email requests from multiple project managers, which is time-consuming and cumbersome
Shortage of resources within a multi-project environment
It is particularly challenging if there is a demand for a niche skill set between different projects. The organization may only have limited resources to satisfy all the requirements. Allocating all available critical resources to a single high-priority project can create a resource crunch, adversely affecting other projects.
Rise of internal conflicts between multiple projects
Often multiple projects require the same competencies at the same time. This gives rise to resource competition, creating disagreement between project managers that may lead to conflicts. Some other causes of internal conflicts are differences in needs, resource schedules, project priorities, etc.
Unable to forecast demand vs. capacity
Inappropriate resource allocation and improper use of bench employees lead to unplanned hiring of high-cost resources in place of low-cost, similarly skilled ones. The lack of foresight into the capacity vs. demand gap elevates unplanned hiring at the eleventh hour, and as a result, expensive local resources get recruited. It escalates the project budget and impacts project profitability.
Lack of productive utilization
Planning and scheduling competent resources into non-billable activities reduces productivity. In addition, without the right resource planning tools, project managers fail to track real-time utilization resulting in suboptimal utilization of resources. This can further cause revenue loss, project delays, and a decline in employee satisfaction.
These are some of the challenges that lead to ineffective resource planning. Now let’s look into some of the best ways to manage resources across multiple projects efficiently.
Strategies for effective resource planning across multiple projects
Now the question arises- What is the best way to manage multiple projects?
In a multi-project environment, resource planning is non-negotiable as it enables managers to monitor and track resources across multiple projects and activities.
Here are some 7 strategies that will help to keep everything on track without disappointing any stakeholder within your business.
Gain 360-degree visibility of all resource profiles
A Multidimensional resource scheduler facilitates identifying and allocating appropriate resources to the right project at the right time. With a unified Gantt chart view of the enterprise, it offers 360-degree visibility of all resource profiles and schedules that can help deploy them to the project based on their skills and availability. In addition, the comprehensive view of all resources allows managers to optimize utilization levels and increase revenue and employee satisfaction.
Prioritize projects
Resource management in a shared-services model becomes complex when supervised by two or more managers. Therefore, it is appropriate to categorize projects based on priorities and keep an updated list of tasks that needs to be done by shared resources. This will also help shared resources to be more effective and get involved with more billable and strategic initiatives.
Distribute key resources uniformly across projects
An efficient resource allocation will ensure that no resource is under or over-utilized against their available capacity. In this case, the resource managers can create a revised resource schedule to distribute them uniformly across projects. Resource Leveling and Resource Smoothing are the two strategic techniques that can be used to maintain uniformity.
Enable out rotation and backfill strategy
Strategic resource planning helps managers to out rotate an internal niche skilled resource from an existing project to kick-start a new critical project. To ensure that the previous project’s quality is not compromised, they can imply a backfill strategy, i.e., fill a resource with similar skills. A resource is short-listed for out rotation if the concerned person is not involved with any important activities.
Encourage multi skill building
Implementing skill-building programs that promote sharing and application of one’s knowledge is critical to the success of any organization. Managers should therefore invest in training and development activities to encourage multi-skill building among resources. Furthermore, when a resource’s primary skills are not matching any suitable vacancy, they can be made billable using their secondary skill sets, thereby improving billability.
In addition, Individual Development Plans or IDPs help employees learn new skills and enhance their work performance per their interests. It enables managers to align employee training with the goals and objectives of an organization.
Leverage cost-effective global resources
Developing a proper resource planning strategy that brings in cost-effective global resources and facilitates global resource management helps to control the project budgets. For example, managers can use a multi-location policy to identify and allocate cost-effective global resources from low-cost locations and control project costs.
Determine proper guidelines for matrix organizations
Given the complexity of a matrix organizational structure, where every single resource has dual or multiple reporting and accountability, the onus is on the managers to ensure resources are utilized optimally against their capacity. The shared-service model of highly skilled resources between functional units and projects lets managers check one pool of resources to fill the project’s demand.
A proper resource management tool provides data-driven insights into resource availability, utilization, and capacity, letting managers forecast the demand in advance.
These are some of the best practices to create a well-defined project resource plan.
Conclusion
Managing resources and projects are the two sides of the same coin. Some call it an art, and some categorize it as science to plan resources effectively across multiple projects! One needs to consider the project scope, financials, and every other essential aspect before creating a project resource plan.
But to effectively plan resources and maintain business profitability, it helps to use a powerful resource management tool customized to one’s requirements.
It provides a unified view among resources and ensures everyone has a broad view of different projects. It also significantly helps managers make informed decisions that enhance all business operations and boost resource utilization and productivity.
How do you manage multiple projects and deadlines in your organization? Are you leveraging appropriate project resource management solutions to resolve resourcing bottlenecks?
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