Resource allocation helps you to choose the best available assets for multiple projects and manage them throughout the work, so you can avoid under or overutilization of your employees. Sadly, not all project managers use it to their advantage.
What will you get thank to this article:
Only 26% of companies always use resource management to estimate and allocate resources, and 36% of them do it often, according to the PMI survey (“Pulse of the Profession”). At the same time, less than 60% of projects meet the original budget and barely 50% of them are being completed on time, the same study says.
Many project managers who want to introduce what project management is, use the Project Management Institute (PMI) definition. According to the last one, project management is about using whatever it takes to deliver something helpful to people – as they say, to “deliver value to people”.
To be more precise, the APM believes that project management is about using some competencies, abilities, talents, expertise, tools, machines, instruments, software, methods, techniques, and processes to “deliver value to people”.
The phrase “value to people” stimulates us to suppose that outcome of project management could be everything. A house, an app, a park, or even some social movements, including a crusade, LGPT, or religion. Anything which is useful for some digit of individuals.
The above-mentioned comments are the reason why we – the business-embedded people – use the definition proposed by the Association for Project Management (APM). The proposed understanding of project management contains criteria that help with splitting just management from project management. Let’s take a look:
Project management is the application of processes, methods, skills, knowledge, and experience to achieve specific project objectives according to the project acceptance criteria within agreed parameters. Project management has final deliverables that are constrained to a finite timescale and budget.
When we compare both the APM and the PMI definitions, we see some nearness. Both are about running things and using knowledge, experience, methods, etc get the things done. But only the last characterization of project management is – we’d like to say – businesslike.
The time, budget, and “project acceptance criteria” are the aspects of – let’s say – the real project management (and of course, resource management or resource allocation processes). All we know is that in the business relations world any project has its objective. And any has to be done at a certain time, within a given budget, and must be endorsed by the principal – whether a customer or a director in your company.
And here is the main distinction between management and project management. Just management is a continuous, ongoing process. Project management has its final outcome provided within a finite time span and budget.
This distinction has the consequence that project management is not just a process, but a structured process. It is called the project management life cycle and it usually takes the form of 5 phases.
Just like the Ganntic company – our competitor in the resource allocation systems market – resource allocation and resource planning (its an alternative term for resource management) are aspects of the project management life cycle process. They are responsible for planning, organizing resources (employees), and measuring their productivity (yes, it’s the 4th phase of the project management process mentioned above).
Now we know where to find resource management in the context of the project management life cycle. It’s time for understanding resource management. Why? Because resource allocation is part of resource management, and resource management – as you already know – is part of project management processes.
Thanks to the APM Body of Knowledge, we know resources are understood very widely. Money, tools, machinery, technology, and – the most important one – people and their skills. Resources mean everything that is requested to finalize a task and project.
So what’s the connection between resource allocation and resource management (resource planning)? Let’s take a look at the definition given by the APM. For them, resource management is:
(...) acquiring, allocating and managing the resources(...) required for a project. Resource management ensures that internal and external resources are used effectively on time and to budget.
As we see, identical to the definition of project management, time and budget are those aspects that are critical in this process. And we shouldn’t exclude “acceptance criteria” as well.
Nevertheless, resource management is understood as the process of planning, selecting, scheduling, and allocating resources to meet the acceptance criteria and finish the project.
In resource management and resource allocation as the element is about identifying available and sufficient resources, and matching them with appropriate tasks at the right time. And the function of the resource or project manager is to identify the employees with relevant skills and experience (so-called, resources) to deliver the work, (its part of planning), and decide when the particular resources will be required (via resource allocation or resource scheduling).
This article could force some less experienced ones to think it shouldn’t be difficult to do. So, at the end of this chapter, we’re going to use the annual report that comes from Wellington company.
Before we will talk about the meaning of resource allocation in project management, let’s begin with an understanding of one of the most important terms in this article – resources. Thanks for this introductory paragraph you will better feel the differences between some definitions of resource allocation mentioned in the paragraph below.
As you can imagine, resources can be absolutely different – from material to non-material. And is no different in the context of resource allocation but understanding what “resource” means depends on the industry where is in use.
In this chapter, you’ll see many brands – including our business competitors. We compare a few definitions and meanings presented by Brittanica Dictionary, but also our well-recognizable competitors – Wrike, Resource Guru, or TeamGantt company. The meanings from more general to more exact and related to project management activities.
Cambridge Dictionary informs that resource allocation is
a process of dividing money, skills, etc. between departments of an organization.
More strict in another very recognizable Brittanica Dictionary, that suggests the economical background of our term. Allocation of resources is understood as an:
apportionment of productive assets among different uses. (Brittanica Dictionary)
But – as a part, let’s say, a project management industry – we will be focusing on meaning connected to this branch. So, Float – our competitor and well-known resource allocation in project management software provider – informs us in one of its blog articles that resource allocation is the process of appointing and handling assets to help a team’s tasks, projects, and strategic objectives.
But when continuing reading and being more accurate, Float emphasizes two aspects of resource allocation. The first is the matching. Allocation means matching employees’ or team members’ competencies, and experience to the right projects or tasks. And (relevant) matching is one of two key elements of its resource allocation understanding.
And secondly, ensure each team member, and each employee taking part in the project is able to execute every assignment and any task in the pipeline.
From Saviom’s perspective, another software that is aimed at helping project managers in resource management processes:
Resource allocation, also known as resource scheduling, recognizes and assigns resources for a specific period to various activities.
These activities – as we read in other places written – can be related to the project or cannot. Admin, support, operation, etc. Here Saviom draws attention to recognition as the first important element of a resource allocation process. Second – like many others – assigning. The third element is “specific period”.
On the website projectmanager.com we’re informed that the resource allocation term means the same as resource management and resource scheduling (more about that in the next paragraph). And actually, from their perspective, resource allocation is just a resource scheduling that takes into account available resources required by a task or project to be finished with expected results.
Closing this chapter, we would say simply:
Resource allocation simply means assigning resources (mostly people, their skills, including their availability, current or previous performance, and time management skills) across various tasks in a project to work toward your deadlines in the most effective and economical way possible.
Resource allocation de facto involves the availability of resources, current and expected skills, (participating in processes that will ensure the use of available resources, either alone or in cooperation with HR or an external company), experience (both project managers and employees), estimations, dependencies, priorities, and change requests that appear during the whole journey of product development or project management.
From this point is entitled to say that the last one meaning suggests that resource allocation is a result of many choices behind it. The last decision of choosing the right resources is preceded by micro-decisions that influence team performance and determine the project’s success.
This part could be also the part above but because of its importance, we’ve decided to talk about this topic in a separate paragraph. Why?
Treating “resource allocation” as a synonym for “resource scheduling” (i.e. Saviom) and even “resource management” (i.e. Project Manager) isn’t quite new. But the project manager’s environment and university representative, there is no consent to equate one term with another or a third. For some of them, allocation of resources is a resource management process.
In Wikipedia, we witnessed such information which isn’t quite close to PMI suggestions:
In project management, resource allocation or resource management is the scheduling of activities and the resources required by those activities while taking into consideration both the resource availability and the project time.
From the Project Management Institute’s perspective, it’s not quite true. A few of the aspects presented above definition are true: availability of resources and project time. But what about the budget? Mostly the budget determines the time when something can be done. Because, if you have the budget, you can get decide the accessibility of resources – people participating in the project and any other resources (tools, equipment, etc.).
Resource allocation also takes into account the availability, capacity, and utilization of resources across a firm but should not be confused with resource scheduling.
From the visual-planning.com perspective:
Resource scheduling refers to the set of actions and methodology used by organizations to efficiently assign the resources they have to jobs, tasks, or projects they need to complete, and the schedule starts and ends dates for each task or project based on resource availability.
Float suggests resource scheduling is a process used by teams to organize and structure their employees so the tasks they need to complete are scheduled based on availability and capability.
But Resource Guru emphasizes the role of recognizing or identifying the accurate wink when resources should be assigned. They understand resource scheduling as a process of identifying precisely which resources are required and then scheduling when they’re needed. From this perspective, properly allocated resources are the result of very good identification of employees with relevant skills (or just suitable skills among available employees) that assure the project will be done with expected requirements. Of course, this assumes a project or resource manager that can perfectly, or at least very well, assess employees’ potential and their helpful role in a particular project.
Nevertheless, keeping the above considerations in mind and those about resource allocation in project management, it’s hard to resist the feeling that understanding the role of allocation of resources has appeared many times as a part of project resource management or even the resource scheduling process. But treatment as a synonym is also legitimate.
Resource management is prone to several challenges that you need to be aware of to properly allocate resources and manage them throughout the project.
1. Client changes
As a project manager, you might have already experienced how changes to the scope, timeline or budget can affect project delivery. With resource allocation, it’s actually the same – having an up-to-date resource calendar will help you to smoothly adjust resources once the changes appear.
2. Availability of resources
Starting off a new project, ideally, you could use any resources you need that are available at your company. But what if your agency is running multiple projects and you have to negotiate over the same resources with other PMs? Or what if a given team member is out on their sick leave? Availability changes and you have to monitor it all the time to spot threats to your project’s delivery.
3. Project dependencies
Allocating resources you need to include project dependencies, which are a form of a relationship between the tasks or activities in the project. For example, in IT projects there are tasks that can only be done after some other ones are completed, so there’s no point to hog resources early on.
4. Project uncertainties
Even if you’ve checked all the boxes when starting off a project, and agreed on the timeline, the budget, and the scope, there’re always things you can’t predict. Resource management requires you to be able to respond to project uncertainties, e.g. by shifting resources from other projects or re-assigning them.
5. Priorities across the company
If your company runs multiple projects simultaneously, you and your peers may have to share limited resources, very often in a similar timeframe. But even if you manage to negotiate over resources you both need, there may be a change in priorities regarding one of the projects.
Let’s take a look at how to effectively use the resources at your disposal.
1. Know the project and the team
Only by knowing the scope and resources available at your company, you can properly assign team members to your project.
Start by creating a high-level plan of the project, consisting of its requirements and deliverables. Then, as you know exactly whom you will need to complete the project, you can use a skills matrix to discover which employees at your company to involve.
Or, if you’re a Teamdeck user, you can simply filter your employees by their skills, spotting relevant employees and their existing bookings in no time:
As you’re filtering by the people you’d like to book for your project, check their availability to see if they are actually free to join your project. The simple availability bar helps a lot:
At this point, the rule of thumb is to not get carried away and over-allocate resources for the project. Actually, resource-hogging is considered a mistake project managers make to protect themselves from uncertainties. But, in turn, it makes project estimates and long-term plans inaccurate, affecting the company’s bottom line.
Always think of the big picture while allocating resources. Check the bookings already made by other PMs to spot resources you may both need, in case you should adjust your schedule to that.
Knowing when your team members have their days off helps, too. See the yellow entries below? You need to include them in your estimate, as that’s exactly when these employees will be unavailable. Similarly, you can spot national holidays taking place during your project.
2. Uncover risks early on
We’ve talked about it a bit in the resource management challenges section. As a project manager, you are well aware of risks like client reviews, delays, personal emergencies, competing projects, etc. They interfere with the allocation of resources, too.
Once one of the above-mentioned challenges occurs, you need to adjust your bookings. Having a high-level overview of resources at your organization will help you find other resources more quickly, re-allocate resources, extend or cut existing bookings, or even delete some if needed.
3. Keep track of the project
Remember how resource allocation is about improving the effectiveness of your team’s utility? Now is the time to check how you’re team is doing. You can do it by measuring resource utilization.
Start with tracking the time and workload. In Teamdeck, you can easily spot employees with too much or too little (which can also be an issue) to do. Remember the availability bar? Overtime is marked with red color, while the unutilized time is white.
Measuring resource utilization, you can also use a simple formula:
Resource utilization = Busy time / Available time
This way you can quickly find out whether your team is booked to its full potential, or not.
During the project, it’s also recommended to compare estimates with actuals once in a while and re-allocate resources if you need to. Chances are that because of some changes you need to adjust bookings to avoid under or overutilization of your resources, and to meet the project’s requirements.
Setting up regular check-ins with your team will help you to spot these threats, too.
As a project manager, you may also be responsible for tracking your project’s budget. You can do it based on your team’s timesheets, multiplying the number of hours they’ve spent on the project by the rate you charge your client per hour. Again, by comparing estimates with actuals, you can see if you’re on the budget, or not.
4. Analyze the project
Using the data you gathered during past projects will give you a huge advantage. Based on that data, you will be able to better plan and manage your future projects. Having a resource management software with custom reports helps a lot, as you can then organize that data to calculate different metrics, like employee payroll or sales KPIs.
As you can see, by following the right processes and using a complete resource management tool, you can make resource allocation easier and benefit from it in many ways:
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