As a business leader, project manager, or team lead, you need to allocate resources wisely to every project. After all, when you are operating a company, the core goal is to achieve growth and success. And the best way to support your business goals, growth, and continuous success is by utilizing your resources efficiently. Remember, regardless of the size of your company, your resources are a significant part of your business.
No organization has an unlimited pool of resources from which they can select a resource and assign to any project/task. You need to consider various aspects like resource availability, skillset, rate, etc. to ensure your projects are completed on time and within budget. You need to make sure that the skills and competencies of your resources are not misused for the wrong projects/tasks. To enhance overall business efficiency and profitability, you need to strategically allocate your resources to a project in a manner that gives you an advantage.
What is Resource Allocation?
Simply put, resource allocation is the strategic assignment of available resources to projects or tasks to optimize effort utilization and reduce costs. While a resource can be an employee, property, machine, software, or money, we will focus on how organizations can capitalize on their people through optimized allocation. With the right resource allocation strategies, companies can ensure that their resources are not under or overutilized, and are rightly placed as per their skills, availability, and project timelines. Correct resource allocation helps organizations maximize their utility and improve customer and employee satisfaction.
Importance of Resource Allocation
Adequate resource allocation is an integral part of your business. To perform project tasks more efficiently and effectively, both businesses and their employees require the right tools and resources to succeed.
The way you allocate resources is one of the crucial factors in determining whether the project will be successful or not. Resources are key to the performance and operations of any organization. Without proper allocation and planning, things can get out of hand. For example, in an IT service firm, let’s say you assign a Java-related project to an employee who is an expert in C language. Due to the skill-work mismatch, the employee will not be able to do the task perfectly, which can further lead to employee burnout, poor performance, missed deadlines, and failed projects.
Benefits of effective resource allocation include:
- Improved employee and customer satisfaction
- Zero workplace stress
- Enhanced efficiency
- Better employee retention percentage
- Decreased time spent on tasks
- On-time achievement of targets
Challenges Associated With Resource Allocation
In today’s world, change is the only constant. You need to be always ready for dynamic allocation of resources to get projects completed successfully. However, without knowing how your resources are placed, it isn’t easy to take control of any situation. And identifying the right resource without the right tools can be an overwhelming task.
Your resources are allocated to multiple active projects in your organization, at a given point of time. Means that, one resource is working on more than one project simultaneously. This means managers should have access to information about each resource when a new project comes in. Without real-time insights into resource availability, managers might end up under or overutilizing resources or may procure resources at a higher rate, impacting the project costs directly. Therefore, an up-to-date resource availability list is required to meet the changing deadlines and accommodate new projects.
Also, no matter how diligently the scope and timelines of a project are fixed at the start of a project, there is always a risk of scope creep. A few of the things that can frequently change when it comes to any project are the timeline, scope, or budget. If the timelines or scope of a project changes, it is possible that you must add up or take away some resources to meet the new demand. This type of change can throw the entire project off track if required resources are not available immediately.
However, if you have planned the resource allocation process carefully with a proper strategy, then you’ll be able to get through this smoothly. All you need to do is allocate those resources to a project who can catch up with the new project changes.
Significance of Resource Allocation in Project Management
In today’s global economy, with an increasing number of projects and shrinking budgets, project managers need to do more than just plan for a few resources and projects. With the commencement of any project, the primary task is to manage projects in the best way they can. And one of the essential parts of efficient project management is resource allocation. However, allocating the right resources to the right projects is not easy.
The process requires managers to be familiar with the skills of the available resources. Resource allocation is much more than just assigning resources to projects as it plays a crucial role in project management and further improves business performance. Planning and utilizing resources well help achieve optimal resource utilization and improve ROI.
When done right, resource allocation can provide many benefits in project management – from significantly reducing project budget to maximizing productivity and profitability, enhancing employee and customer satisfaction, and more. If a resource allocated to a project does not have the desired set of skills, the project will most probably fail or be delayed.
This makes resource allocation all the more important in project management. Resource allocation helps project managers plan ahead of time. It gives them better visibility into the projects that they are managing. It also provides a clear understanding of the team’s capabilities. This helps project managers prepare better for upcoming threats and project risks. As a result, with proper resource allocation, you can control work overload and contribute to the team’s effectiveness at work.
How to Allocate Resources While Managing a Project
One of the main triggers that cause project failures is resource dependencies and inefficient resource allocation. How projects and resources are planned and allocated makes a huge difference between the success and failure of a project. Planning and allocating resources is not a one-time job. It tends to vary with the changes in the projects, conditions, and scope. Therefore, you need to be careful while allocating them in the right way, when managing multiple projects or multiple changes in a given project.
Here is what you should do correctly to allocate resources:
- Understand the project’s scope: It is essential to clearly understand what the project is all about, as it will help you ascertain what will be required to complete the project.
- Identify your resource pool: Secondly, for successful project completion, you must have complete knowledge about the skills of your resources. This is important because only when you have clarity about the strengths and abilities of your resources, you will be able to align them properly as per the project requirements. Otherwise, imagine what will happen if you assign software development work to a finance professional resource.
- Keep track of time and workload: As a project manager, you should always keep an eye on how the time is being utilized for completing a project. It is your responsibility to make sure that the project is completed on or before the due date, and on time. You also need to ensure that your resources are not overloaded with work. Take help of project tools that can give you real-time insights into every piece of project data and monitor progress continually.
You should also collect and analyze the data and insight to better plan and manage future projects. In addition, it will help you make projects successful by accurately estimating different metrics related to resources and projects.
How to Allocate Resources to Projects in a Smarter Way
Real-time visibility into resource availability is the key to effective resource allocation. Before starting any new project, you need to identify available resources with their respective skill sets and then assign them to a project. With the right tools in place, it’s now more accessible and more straightforward than ever to keep track of resources and deliver successful projects. Here is how Polaris PSA can help you accurately allocate resources quickly and efficiently:
Polaris PSA is an enterprise-ready, configurable, and scalable solution that provides a comprehensive picture of global resources along with the details of their existing and upcoming allocation levels, including their departments, location, skill sets, competencies, etc. It will also identify the subsequent availability of resources.
Modernize Resource Planning:
Our resource management software can be easily integrated with your current CRM. This will help you sense incoming demand from sales opportunities and start early conversations with stakeholders. You can also search for resources within minutes, based on their availability, skills, location, or other criteria. Based on the historical project information, Polaris can help you can create accurate project timelines and resource requirements.
Allocate the Right Resource for Every Project:
The critical aspect of maximizing profitability is to utilize resources effectively. However, it is impossible to optimize productivity and efficiency without real-time insights into resource availability, certifications, and individual skill set.
You can overcome this with Polaris PSA’s SmartMatch, an AI-powered resource allocation engine. SmartMatch is designed to automatically suggest the best resource for your requirement, while considering all the requirements. You will also gain complete control over resources, schedules, and costs that directly impact profitability. This will help you make more informed decisions about whom to allocate to which projects, and drastically decrease planning time.
Use Polaris’ graphical representation capability to easily spot under and overutilized resources in real-time. It provides a report on the utilization of different resources by various dimensions, with dynamic charts and graphs. Polaris will also help you optimize resource costs based on the cost of available resources and assignment locations. You can quickly shift resources from non-billable to billable tasks and lower bench time by identifying open assignments that fit your resources’ skill sets.
Improved Resource Allocation Means Reinforced Bottom Line
Every organization is looking for ways to enhance its bottom line and profitability. To meet the clients’ demands and finish projects within time, organizations are spending substantial amounts of effort and money – from hiring the right resource to training their current employees. There is no denying that untracked resource time and activities lead to the loss of thousands of hours and billions of dollars in productivity.
Inaccurate or ineffective resource allocation is one of the major reasons organizations fail badly. Resource allocation should be regularly monitored and aligned in today’s volatile world. More intelligent resource allocation also allows you to meet project objectives in a timely manner, without being bothered about budget overruns. A meticulously crafted resource allocation framework will also help you foresee upcoming threats and challenges and mitigate them. As a result, you can efficiently plan to analyze future threats, identify project gaps, and eliminate any risk before it can potentially harm your business.
Intelligent resource allocation will help you thrive—more importantly, achieve operational excellence. Providing an environment to your employees that offers self-development, skill-building, and staying updated with the current trends, will encourage them to contribute their 100% to the project. This will happen because employees will feel more responsible and take ownership of their job. Resource managers will also be able to manage their resources more effectively, and improve overall bottom-line results.
When resources are allocated effectively, they can be a key driver of ideas and innovation for your organization and help you achieve profitability. With zero errors and increased employee turnout, you will always get higher results and reduced underperformance.