Projects in a dynamic business environment have changing needs in terms of budgets, deadlines, and resources required to complete them successfully. Judicious and optimal utilization of available resources – anything and everything you need for a project – determines if the project is going to be a success.
Resources in a business can be its workforce (the human resource), capital, physical infrastructure, common facilities, plants & machines, software, data, vehicles, and many more. Most resources have multiple uses and may be needed for use in different projects at the same time, creating a conflict situation.
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Project Managers of different projects may face off with each other to allocate resources for their projects. They may book them much ahead of time for fear of not having them in time of need or may hold on to them much longer than necessary. This creates unnecessary delays and hogging of resources, as well as the work environment, gets vicious.
As resources are finite and come at a cost – fixed and operational – any allocation must consider their optimal utilization for maximization of the overall benefit of the company. Resource management software must ensure that one project should not suffer to meet the demands of another.
An FSN study showed that more than 70% of organizations use legacy tools such as spreadsheets for their resource planning, allocation, and tracking. This can be tedious, time-consuming, inaccurate, outdated, difficult to share, and challenging to maintain.
Project Resource Management Defined
Resources of all types are essential at some point, and dealing with their proper allocation is no mean task. You will need different resources at every stage of your project, and only with appropriate project resource planning can you ensure that they are available. You need a sound mechanism and a reliable tool to track and monitor numerous resources that your organization can access.
Finding the best resource management software is an integral part of project management where the objective is to forecast, plan, allocate, schedule, and monitor the company’s resources for their efficient utilization. This brings down costs, helps projects complete within deadlines, and foster a cooperative work environment.
The following definition clearly states the process and objectives of resource management:
Maximizing the utilization and optimal use of the available finite resources is the main objective of project resource planning. Resource Management and Resource Planning are the processes of forecasting, planning, organizing, scheduling, monitoring, and managing different resources – like people, capital, technology, machines & equipment, and facilities – in the most efficient way, so that all the projects in the organization get to complete on time, within assigned budgets, and with maximum efficiency.
The most common challenge faced by organizations in resource planning is either over-allocation or under-allocation of resources. Both can impact the costs, profitability, even project viability, and employee morale negatively. Relations with clients and third-party vendors may also get affected adversely.
Why is resource planning important?
Every organization is set up to achieve a common goal – companies to maximize their shareholders’ wealth by earning profits, governments to distribute the national resources equitably, and charities to further their cause. They undertake projects to meet these goals. As project demands continually change, valuable resource scheduling becomes more crucial for their successful execution.
These organizations wish to achieve the objectives with minimum costs and in as little effort as possible. Project resource management helps organizations efficiently accomplish this objective by allocating resources efficiently while meeting different constraints.
Resource planning is essential because of the following reasons:
- Identification of all the tasks, their durations, effort required, and resource estimates.
- Clear definition of the constraints associated with projects and individual resources.
- Better forecasting of resource requirements in the near- and long-term concerning project schedules and timelines.
- A clear understanding of the bottlenecks includes lack of resources, capacity shortage, capital needs, and skills gap.
- Projecting the resource acquisition plan using this information, keeping it within the allocated budgets.
- Optimal utilization of the project budget in resource acquisition, allocation, maintenance, and use.
- Improvement in project workflow by making available required resources at the time and place of its need.
- Better and effective communication between project managers and resource owners leading to better coordination.
- Proactively ascertain new roles, skills, and qualifications needed to fulfill the needs and hire suitable candidates.
- Better utilization of resources distributed at various locations, plants, or regions by bringing them together if need be.
- Maintenance, conservation, and reuse of resources to the full extent of their working life.
- Reduction in resource wastage, leakage, and pilferage.
Benefits of Resource Management and Planning
With resource planning software, companies can better coordinate and organize teams, projects, equipment, locations, and any other resources needed for the project. Smart resource allocation and distribution improves productivity and reduces frictions.
Here are some of the significant benefits of using Smartsheet resource management tools:
With resource planning software, such as the Smartsheet resource management tool, you can organize all aspects of your projects – such as people, vendors, departments, venues, equipment, data, and other resources. You can effectively plan, prepare detailed schedules, find out about dependencies, identify the constraints & restrictions, and complete the project on time.
2. 360-degree View
In many modern matrix organizations, resources are distributed across locations and regions, and sometimes no one has a complete view of what resources are available in the company. These can include people with required competencies, specialized tools & equipment, and other resources.
A resource planning software can consolidate the data for all resources, across all locations, in a single view to provide holistic and 360-degree visibility to the managers. The data include current status, following availability dates, constraints, and relocation costs to help prepare an optimized schedule.
3. No More Data Silos
On average, nine out of ten spreadsheets prepared for resource scheduling have some kind of errors in them, according to a survey by Marketwatch. This is due to different formats of data capturing, other fields, varied capabilities of users to use spreadsheet software, and lack of querying capabilities in spreadsheet software consolidating data from multiple files. The creation of data silos makes compilation and analysis time-consuming, cumbersome, and even error-prone.
With software like Smartsheet, centralized information, consistent view of data, similar fields, and real-time querying capabilities make it possible to make a plan and see its effects on all the resources and other projects.
4. Smart Task Distribution And Allocation
A good resource planning software will have the capability to match resource requirements with competencies and availability on its own. It will offer you suggestions that are practical and viable. It will provide advanced filters like qualifications, availability, skills, costs, location, experience, and constraints to help you find the right resource for the given job.
Once you have a holistic view of all the tasks in a project and the competencies needed to complete them, you can smartly distribute these tasks among resources. Smart allocation is not equitable or even but considers the most capable resource for doing a job.
5. Better Estimates
Many projects fail to deliver on time because the project managers made incorrect estimates regarding the availability of a critical resource or the duration for which it would be needed. This can also result in cost overruns, that in most cases, the client would not bear, and you will have to absorb the additional costs.
Smartsheet resource management software can help you make better estimates for better planning with guesswork out of the equation. Calculations are based on the analysis of past projects. With proper review and adapting the study results for current needs, you can make accurate estimates for project duration and resource requirements in terms of time and competencies.
6. Increase Profitability
With better estimates, the problems of cost overruns and project delays could be easily avoided. This is especially true about long-term projects where the lines can easily blur between billable and non-billable resource utilization. With more billable resource allocation and utilization, you can increase the profitability per dollar invested and bring efficiency to your operations.
Gap analysis can help you procure resources in time to avoid eleventh-hour glitches and shortages affecting project delivery. It can also help solve the problem of over procurement, adding up to unnecessary costs.
7. Real-Time Data Analysis
If multiple projects are ongoing with shared resources, then monitoring resource allocation and utilization in each of them can be tedious and challenging. Accurate logging of the resource consumption in any project is essential to bill the client only for the resource allocated to their work.
Real-time tracking of shared resources also helps in meeting deadlines and cost-efficiency. With team distributed across multiple time zones, centralized resource tracking and analysis becomes all the more critical. You can check whether a project has over-or under-allocation of a given resource and make necessary adjustments in real-time before any problem arises.
8. Address Dynamic Business Needs
As many businesses operate in a dynamic environment, the projects for those businesses need to adapt midway to the changed requirements. Dynamic resource adjustments and allocations can make even the most volatile projects complete on time and meet their scope.
A real-time resource planning software can help you address dynamic business needs by identifying shortages, over-allocations, delays, and competency mismatch in real-time. Global resources can be pooled, or third-party vendors can be contacted to meet the sudden change in demands.
9. Better Employee Engagement
A Gallup survey suggests that employees who can utilize their skills daily are six-time more engaged and content. In addition, proper scheduling brings a sense of stability to the work-life of employees. When they know in advance what, when, and for how long they are being allocated to a particular project, they get a sense of contentment.
With proper resources, you can also avoid any chances of allocating over-or under-qualified employees to a project, thereby avoiding resentment among them. An overqualified person may find the job boring and may take it as humiliating. Similarly, an under-qualified person may find the task too intimidating and make mistakes that may cause severe delays and errors.
10. Seamless Integration
An advanced Smartsheet resource management software could not only help you with help with organisational communication and allocation of resources with project management, but it can also easily integrate with other standard business applications such as ERP, HRM, CRM, and PPM. This helps you see the single and complete view of the truth.
The system can send emails, notifications, update online shared calendars, and allow the export/import of data in multiple file formats. This also eliminates any chances of errors of omission or commission, data inconsistency, data redundancy, and overbooking of resources.
Resource scheduling is essential to the successful completion of any project and can create value for the business. It can help you check costs, increase profitability, engage employees, and help optimally utilize resources without straining them.
The process of resource planning can be complex, but with Smartsheet Resource Management software, you can make it easier.