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What is Resource Management, and Why Is It So Important?

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Resource management is key to the success of any project. But between assessing capacity, prioritizing the most important projects, and developing accurate estimates, resource management is anything but simple. And the more cogs in the machine — the more personnel, equipment, capital, and other variables involved in a project — the greater the challenge.

With the right tools and plan, however, your organization can overcome these challenges and use resource management to bring more projects home successfully.

What is Resource Management?

Resource management is the process of allocating resources to complete projects efficiently and effectively. Successful resource management involves planning, scheduling, forecasting, and more. Resource management is a necessary part of every project that involves some type of resource, be it funds, tools, or team members. It’s a practice that can be applied in nearly any sector, industry, or organization.

Resource management requires a deep understanding of your team’s skills, employees’ capacity, and the availability of the other resources they’ll need to get the job done. Aligning these resources with the project’s needs over its entire lifecycle demands a disciplined approach together with a wide-ranging project management skill set. And, of course, flexible resource management software that provides visibility into resource capacity, demand, and availability makes the process much easier.

The Benefits of Resource Management

The Project Management Institute asked almost 4,000 project management professionals and business executives about the primary causes of project failure. In their answers, 23% cited inadequate resource forecasting, which would have been addressed by proper resource management.

Good resource management impacts your organizations in several crucial ways:

• Improved efficiency. Workers standing idle due to a lack of what they need to get the job done or an uneven distribution of work between team members are just a couple ways that poor resource management can negatively impact efficiency.
• Smarter people management. Resource management provides your organization with a firm grasp on the availability of employees and their skill sets, so you can easily identify gaps and effectively utilize all team members across all projects in your portfolio.
• Reduced burnout. Ensuring that teams have what they need to get the job done when they need it — and that work is reasonably distributed among team members — also boosts employee wellness. Keeping burnout low is one of the best ways to retain the talent your company needs to succeed.

Better project outcomes. Effective resource management drives project value, leading to more projects delivered on-time and on-budget while keeping clients and customers happy. With fewer fire drills needed to quickly obtain the required resources, sustainable, reliable project success becomes a reality.

The Challenges of Resource Management

Of course, if resource management were always simple, every organization would take advantage of these benefits. These are just a few of the resource management challenges your organization should take into account:

• Managing capacity. Aligning your organization’s staff levels with project demands is rarely straightforward, especially in industries that lack easily measurable output. Use historical data and input from relevant stakeholders to ensure organizational capacity is sufficient to meet project requirements. This also provides sufficient lead time to perform additional hiring or plan for subcontracting.
• Prioritizing projects. Not all projects are created equal, and resources are always limited, so determining which projects take priority is a vital part of resource management. With a solid understanding of project requirements and business goals, your organization can ensure the most important endeavors are always properly resourced.
• Aligning schedules. Project success requires that the right team members are available to work on the right tasks at the right time, but this often isn’t the case. From juggling multiple projects simultaneously to previously scheduled PTO, there are plenty of variables to track when ensuring employees’ schedules are aligned with project needs.
• Developing accurate estimates. Determining accurate resource needs is at the heart of resource management — if  labor and other resource requirements aren’t accurately planned for in advance, missed deadlines and unexpected scrambles are sure to result, along with higher costs. Developing accurate estimates requires access to quality data regarding all facets of the project and your organization, together with the tools to put that data to work.

Types of Resources

Some resource types are obvious, while others are less so. These are a few types of resources relevant to most projects.

Funds

The finances available to actually pay for your project might be the most important type of resource to manage. After all, cost overruns can cause delays or changes in scope like little else. Accurately estimating the funds needed for a project is a core part of resource management, as is establishing a contingency fund as part of the budget planning process.

Personnel

Your organization’s employees are far more than interchangeable resources — they’re the engine that drives business wins and makes your company what it is, each with unique talents and needs. But for purposes of resource management, they’re a key factor in determining what projects your company can take on, how quickly these projects can be completed, and whether they’ll be successful. Efficiently utilizing your team’s time means ensuring they know what to do at all times, their roles align with their skills, and they have all the other resources they need.

Equipment

Equipment includes everything from hardhats on a construction site to the trucks used to move materials at a mine. Resource management requires anticipating all equipment necessary for a project, ensuring its availability, and planning for what to do if it breaks down.

Resource Management Techniques

Despite these challenges, practicing resource management well is within reach for every organization. Focus on these core techniques to make resource management a strength of your company.

Resource Forecasting

Resource forecasting involves assessing a project’s resource requirements, together with resource demand across the portfolio and organization, in advance. It requires an understanding of current capacity and how resources will be used over time, as well as accurate expectations for the arrival of new resources going forward.

Using modern resource management tools can help project future resource demands, identify conflicts between projects, and easily apply predictions to project plans. With accurate resource forecasting, your organization can quickly identify potential bottlenecks, conflicts, and gaps, then act to address them before they have a chance to impact important projects.

Resource Allocation and Utilization

Resource allocation refers to the assignment and allotment of resources to various projects. It involves planning how to leverage resources — of every sort, from employees with the right skills to mobile devices loaded with necessary apps — to get tasks done well and on time. If your organization doesn’t allocate enough of the right resources, it will fail to stay within budget and meet deadlines, harming client relationships and its reputation. 

Beyond the impact on project success, poor resource allocation affects employee engagement and wellness. If an insufficient number of team members are allocated to a project, employees are overworked. If employees lack other resources, frustration results. In either case, they’re unlikely to stay with your organization for long or feel motivation to perform at their best while they do.

Once a project begins, resource allocation gives way to resource utilization — measuring and readjusting allocation in real time to meet a project’s evolving needs. As an organization’s most vital resource, employees are the primary focus of resource utilization. Your organization should aim to use each employee’s full capacity without exceeding it. This maximizes productivity while preventing burnout. Resource utilization also involves considering billable versus non-billable time in some industries, adding another piece to the resource management puzzle.

Resource under-utilitization is also a risk to your company. When resources sit idle, productivity is reduced, resulting in losses that cannot be recouped. Team members must be paid regardless of whether they’re working diligently or waiting for another crew to finish their dependent tasks.

Resource Leveling and Smoothing

While resource allocation and utilization are about completing tasks successfully and efficiently, resource leveling and smoothing focus on sustainable success. The goal of resource leveling is to avoid cycles of boom and bust by spreading work evenly among team members and taking into account each project a team member is assigned to.

There are many ways to put resource leveling into practice. Collect feedback from team members in real time and track relevant metrics so you know how to reallocate work among team members as projects progress. Keep track of each employee’s skills and interests, then plug in team members as needed across departments if their talents enable this type of cross-functional flexibility.

When it comes to time management, proper resource leveling can lengthen the estimated time to complete a project — but that’s because it’s realistic and ensures everything that needs to be done falls within the limits of available resources. In contrast, resource smoothing does not affect the time to complete a project or its critical path. Instead, it draws on other resources to avoid pushing against time limits, and it is thus most appropriate when time is the primary constraint a project faces.

Tools for Resource Management

Mastering these techniques takes time and effort, but your organization doesn’t have to wrestle with resource management on its own. Look for a centralized platform that enables enterprise-wide resource management and includes these must-have features.

Integrated Resource Management

The best resource management platforms integrate with other important project portfolio management and project management areas like risk management, cost control, and portfolio planning. This allows you to easily assess your organization’s entire project landscape in a single tool to balance resource supply against project demand. Your platform should also let you incorporate data from other systems relevant to resource planning. You can then analyze the data to ensure resource management aligns with your organization’s business goals.

Robust Resource Planning

Resource planning requires a holistic approach, and your platform should reflect this reality. Ensure it includes the capability to manage all types of resources — human, financial, and otherwise — and to plan the allocation of these resources over any timeframe. It should also allow you to develop plans that account for capacity, capability, and availability. Together with automated capacity checks, contingency planning features, and detailed demand plans, these features make building a strong foundation for resource management simple.

Accurate Forecasting

Your resource plans are only as good as the forecasts they’re based on. Resource management solutions take the guesswork out of estimating future resource needs with innovative forecasting methods that leverage data from across your organization. With accurate analyses up front, your organization can avoid under- or over-utilizing resources and procure the precise resources you need when you need them.

Resource Breakdown Structures

A resource breakdown structure (RBS) is a hierarchical model of resources like departments, personnel, tools, and more. They’re a great aid for resource visualization and planning. Resource management platforms save you the trouble of manually creating and updating resource breakdown structures and allow you to easily change the attributes they include on the fly.

Access the Benefits of Resource Management with EcoSys

Effective resource management is the only way to ensure the delivery of high-quality work that’s on time and on budget. Of course, organizations have varying degrees of maturity, and mastering resource management is a journey. But no matter where your company stands now, it can begin that journey with a tool backed by experts who understand how to go from where you are to where you want to be.

EcoSys can help your organization take resource management to the next level. EcoSys is a holistic enterprise project performance platform that empowers you to build and manage detailed resource plans informed by the latest data. EcoSys’ integration architecture links your resource management processes with other process areas and key external systems, like HR and scheduling tools, making it easy to stay strategically aligned.

Want to learn more? Explore the ways EcoSys can transform resource management at your company today.