Effective Resource Management Is the Secret Sauce for Successful Project Delivery

As any delivery leader knows, the most important determinant of a project’s success is resource management. In fact, 9 out of 10 delivery leaders would agree on this point. Yet, professional services (PS) organizations find themselves grappling with gaps in their resource management strategies that prevent them from unlocking the fullest potential of their resources. 

TSIA and Replicon hosted a joint webinar to understand the current gaps in existing resource management strategies. This blog discusses the insights that were uncovered during the webinar. 

Professional Services Is a People Business

TSIA noted that effective resource management was one of the top business challenges in April 2023. This is highly concerning as professional services is, ultimately, a business revolving around people management in which the economics of consultants can make or break project margins. 

TSIA research indicates that while the pacesetter average for PS delivery staff is $292 per hour, the industry average is just $221 per hour. With different resources being billed differently, PS organizations must ensure they are aligning their high-value people to projects with higher margins to maximize their revenue. 

To improve billables, professional services organizations need to ensure their resources are correctly aligned with projects. So, organizations should ideally have their best resources working on high-value projects. This not only requires complete visibility into resources but also a 100% view of all projects. 

Moreover, dynamic resource allocation is a must as organizations need to rapidly overcome changing project scopes and other challenges. Scenario pricing analysis also becomes necessary to calculate trade-offs on available resources for ensuring optimal resource utilization and appropriate cost distribution among projects. Finally, organizations must also leverage historical data for pricing, time, scope, etc. to quickly identify more profitable projects and prepare accurate bids.

Intelligent Resource Management is Key to Higher Revenue Realization

Poor project resource management can have serious financial implications but organizations fail to realize those implications until after the fact. According to the TSIA 2022 PS Benchmark Survey, professional services organizations are achieving only, on average, 58% of the annual billable utilization for their delivery staff. As a result, they are losing out on potential revenue.

One of the main causes of poor resource utilization is the lack of accurate data. As managers know, decisions are only as good as the data available. Inaccurate data, especially time data, can hamper organizations in different ways, with issues related to their timesheets and payroll. It can also result in billing errors and resource underutilization, which can further reduce profitability. 

To increase average revenue realization, organizations must consider having the following three capabilities in place.

1. Accurate Resource Forecasting

Forecasting plays a crucial role in ensuring optimal resource allocation and utilization. By having complete visibility of incoming projects, it is possible to gain an accurate picture of resource requirements. This must be supplemented with an extended resource forecasting view that correctly accounts for time off and schedules, along with resource skills.

2. Quick Resource Identification & Allocation

Organizations must have the right resources with the right skills for the right project if they wish to realize higher margins. However, continued reliance on manual resource management will only hinder their efforts. 

That’s why organizations must leverage artificial intelligence (AI) to correctly identify resources for any given task. Given how project complexity can make it critical to pivot quickly on resource allocation, having an AI-powered resource recommendation engine can be enormously beneficial. Since the ultimate goal is to grow revenue, organizations must also allocate resources while optimizing costs. 

3. Flawless Project Execution

Projects can go awry anytime. To flawlessly manage and execute projects, organizations must be laser-focused on project statuses, ensuring managers are able to achieve an instant understanding of all project metrics. For this, real-time project management is a must. . Managers should also have the ability to gain real-time updates on project status, progress, remaining work, completion estimates, and more. All of these pieces of information should be available through real-time dashboards, ‘Mission Control’-style. 

Why Automating Resource Management Matters

Continuing to rely on manual processes for resource management can do more harm than good for professional services organizations. In the face of evolving needs, services organizations are also entering new markets and delivering new value-added services. This has made the skills matrix of consultants grow increasingly complex, and that is nearly impossible to manage manually.

1. The Need for AI-powered Resource and Skills Management 

The growing need for automating resource and skills management can be seen through the example of a leading project-based IT services organization, as presented by Replicon and TSIA. The organization found it challenging to generate higher margins and deliver value-added services. 

There were several reasons for this.

The organization’s systems were incredibly siloed. Each function had its own siloed system, making it nearly impossible to gain a single source of truth for resource information. The silos also made it difficult to quickly collect and bring together the necessary data. There was a lack of real-time visibility into resource availability. 

Managers found it frustrating to identify resources by their roles, locations, and skills as the data was spread across different systems with little to no connectivity. They had to match resources to projects manually, which was highly inefficient as many criteria, such as skills and costs, were left unfulfilled in the process. Similarly, there were several issues when it came to forecasting resources, such as the limited visibility into resource availability.

2. Delivering Value-Added Services Is Easier With the Right Solution

To deliver value-added services, it is critical to have the ability to forecast and identify skills gaps easily. After all, value-added services require an increasingly complex skills matrix. Organizations must strive to empower and encourage their employees to keep their skills data updated. This will help managers identify potential skills gaps much earlier and schedule training sessions or put up hiring requests as needed. 

To do so, any solution won’t do. The right solution is the one that can consolidate skills and resource management into a single platform. Additionally, it should offer two levels of skills management:

• Standardized skills
• Individual skills

With these capabilities in place by means of a professional services automation (PSA) solution, organizations will find it easier to manage their resources effectively and ensure higher margins. 

What You Really Need From Your PSA Solution

With a PSA solution, it is possible to gain access to valuable resource management capabilities that can address the challenges mentioned above. The resource management module in a PSA solution can help organizations automatically staff their projects by considering several factors, such:

Skills and Experience

With a PSA solution, it should be possible to track and manage the various skills and experience levels of each resource. With this data, it should become easier to find the right candidate for any project at any given point in time.

Resource Availability

A PSA platform should also offer integrated time off, scheduling, and calendar capabilities. This is essential for tracking the availability of your resources. After all, organizations need to know which resources are available at any given time to take on new tasks and projects. 

Resource Costs

To increase margins on projects, organizations must ensure their project resourcing costs are optimized for profitability. As such, a PSA solution should also offer visibility into the costs and role rates for each resource while performing resource allocation.

“Smart” Resourcing Is Critical for Business Success

While there are plenty of PSA platforms available with the above-mentioned capabilities, they may not necessarily be the right fit for your organization. Given the rising complexity of projects, it is essential that your preferred PSA platform should help you proactively drive your projects to completion, while ensuring higher margins and profitability. By fully automating resource management by leveraging artificial intelligence and machine learning technologies, organizations can:

• Embrace AI/ML-driven resource matching and allocation 
• Integrate global time off with resourcing 
• Expose “hidden bench” for accurate forecasting
• Implement cost-optimized resource allocation
• Integrate with CRM systems to understand the demand
• Manage global resources and multiple resource types

Accurate Resource Forecasting Is a Must

Resource forecasting plays a pivotal role in helping organizations ensure successful project delivery. Additionally, as projects and project types evolve, it becomes increasingly essential to have the right resources in place, as early as possible. Without accurate resource forecasting, it’s difficult to estimate the skills, experience, and certifications that will be required 6, 12, or 18 months into the future.

To accurately forecast resources well in advance for any project, organizations need the ability to:

• Know availability by role, location, and skills
• Know how loaded your resources are now and in the following month/quarter
• Create a reference catalog of skills needed by each role
• Proactively train reserved resources for incoming projects 

How Replicon’s Polaris PSA Can Enable Effective Resource Management

Polaris PSA, the world’s first self-driving PSA, leverages AI and ML to empower professional services organizations with powerful resource management capabilities. Some of them are as follows:

• Built-in Resource Recommendation Engine: Polaris PSA offers SmartMatch, an intelligent resource recommendation engine that can automatically identify the right resources for any project based on availability, location, skill set, or other criteria.
• Flexible Resource Allocation: With Polaris PSA, it is possible to allocate resources to projects as needed. Placeholder resources can also be added to account for hiring/training needs.
• Resource Cost Optimization: It is possible to allocate resources by their costs to projects and tasks to meet project budget needs or ensure profitable margins. 
• Centralized Skills Management: Organizations can track and manage the skills, certificates, and expertise levels of all their resources through a centralized repository. They can also leverage Polaris PSA to analyze skills gaps to proactively hire or train resources. 
• Accurate Resource Forecasting: Quickly identify resource requirements based on incoming projects. Organizations can also leverage complete visibility into time off, schedules, and holiday calendars to easily find the resources that they need.
• Optimal Resource Utilization: Organizations can leverage dynamic charts to track resource utilization in real time to proactively spot and address over and under-utilization issues.

To learn more about the capabilities of Polaris PSA and experience them for yourself, we recommend a short demo tailored to your organization’s specific needs. Please reach out to us and we’ll set one up for you.