Allocating the right resources to the right tasks at the right time is not an easy task. But if you have a dozen or even dozens of projects in the pipeline, the complexity of this task increases exponentially.
What do you need to know to allocate resources efficiently in a multi-project environment and utilize them to the full? Let’s figure it out in the article.
Resource Allocation in Project Management: Definition and Importance
In a nutshell, resource allocation is the process of assigning employees to project tasks based on their skills, availability, and capacity as well as distribution of material resources (equipment, facilities, tools) across project tasks. Resources are allocated efficiently when the right people work on the right tasks, while employees’ workload remains balanced – they are neither over- or underloaded.
What are the benefits of efficient resource allocation?
- It optimizes resources’ workload, as their capacity and availability is taken into account, which in turn reduces risks of their inefficiency as a result of overwork or idleness.
- It increases employees’ productivity: when people work on tasks that fully correspond to their skills and capacity, they deliver much better results.
- It contributes to the optimization of project costs: first, because there are less chances for unplanned expenditure on project resources; second, because people who work at their full capacity can increase a company’s revenue.
- Finally, efficient resource allocation and utilization is a sound basis for successful project delivery and customer satisfaction.
As we stated earlier, proper resource allocation can be rather challenging. Let’s explore the most significant hurdles in this process.
Resource Allocation Problems in a Multi-Project Environment
Challenges with allocating resources to multiple projects are caused by the complexity of a multi-project setting. In addition to employees’ capacity and availability, a resource manager should take into account such factors as dependencies between projects and their tasks, resource conflicts, and overlapping due dates. So, what are the main roadblocks on the way to optimum resource allocation?
Uncontrolled changes to a project’s scope negatively impact the whole project workflow, which in turn can affect other projects because of dependencies between them. If changes result in adding more tasks to the scope of a project, it can lead to overallocation of resources, i.e., a resource will be given more tasks than their actual capacity is. In turn, if an overwhelmed employee is engaged in several projects, all of them will suffer from his or her inefficiency as a result of overload.
In a multi-project setting, the number of tasks can be increasing, while the number of resources remains the same. As a result, one employee can be required for several projects at the same time, which becomes a significant roadblock for efficient resource allocation.
Sometimes, resource allocation decisions can be negatively affected by office politics: for example, when resources are assigned to projects that have lower priority, but serve the interests of some influential groups in a company. Consequently, more important projects become understaffed.
Uneven distribution of workload
During the resource allocation process, it may turn out that due to resource and task dependencies between projects, some employees are heavily overloaded at a certain period of time, while others remain idle waiting for further assignments. In both cases, the team members are inefficient.
Too large amount of data on employees’ skills, capacity, and availability
To make efficient resource allocation decisions, a resource manager has to keep the information on each employee’s skills, capacity, and availability at hand. In addition, this data must be regularly updated. When there are hundreds of resources working on numerous projects, finding the necessary employee quickly is next to impossible.
Every project is accompanied by uncertainty, which inevitably complicates the resource allocation process. For example, you cannot know beforehand whether a critical employee falls ill at the time he or she is mostly needed for a project, and how it will affect the other projects.
Efficient Resource Allocation: Key Drivers
Plan your resources’ capacity
Resource capacity planning aims to make sure that there are enough employees to complete current and upcoming projects. When you’re going to assign project tasks to people, the first thing you need is to find out if you have enough employees to staff projects, and if there’s a gap between available and required resources. And if so, you should decide how to bridge this gap: hire new employees, retrain the existing ones, apply resource management techniques, or even postpone this project for later. This will become the basis for the resource allocation process, which is especially relevant for a multi-project environment.
Encourage employees’ upskilling
If employees have multiple skills, they can be assigned a variety of tasks and become interchangeable in certain situations. In a multi-project environment with a limited number of resources, it’s a great virtue. Hiring new employees is costly and time-consuming, so in some cases, it’s much better to invest in people’s professional development, which will provide a project or resource manager with wider resource allocation opportunities.
Apply resource leveling when necessary
As stated in the PMBOK Guide, “resource leveling is a technique in which start and finish dates are adjusted based on resource constraints with the goal of balancing demand for resources with the available supply.” It means that if you have resource conflicts, you should adjust the project timeline in accordance with the availability of a critical employee. The project duration can be either extended or shortened depending on the situation. If it’s impossible to extend the project’s timeline, a resource manager can apply the Fast-Tracking method, according to which interdependent tasks can be performed partially simultaneously rather than consecutively (a team member can start work on the next task after two thirds of the previous task is completed). Therefore, resource leveling optimizes resource allocation and increases the efficiency of work on projects.
Harness the potential of resource management solutions
Modern project and resource management solutions make it much easier to juggle all company’s projects and necessary resources. To ensure seamless resource management process, an effective resource management solution should have the following functionalities:
- Automatic prioritization of projects and tasks and recalculating priorities in response to changes in the project environment;
- Giving insight into every employee’s skills, capacity, and availability;
- Facilitating team collaboration;
- Providing grounds for informed resource allocation decisions according to employees’ skills, capacity, and availability;
- Monitoring team members’ historical output;
- Forecasting resource bottlenecks based on historical and real-time data;
- Proving basis for employees’ workload optimization.
Let’s explore how they work for the resource allocation process in more detail.
Setting the right priorities across projects and tasks
Determining what projects/tasks are the most important for the moment is the first step towards effective resource distribution, their efficient utilization, and successful project completion. In a multi-project environment, the team members can very easily become overloaded or get stuck in bad multitasking, both of which result in reduced productivity. Furthermore, you cannot even allocate resources properly to multiple projects without setting priorities between them. An effective resource management solution can solve this problem thanks to automatic prioritization of tasks across all projects. It analyzes all the existing constraints and dependencies between projects and sets priorities accordingly. Therefore, it provides resource managers with great assistance in making efficient resource allocation decisions.
Running simulations for more informed resource allocation
To reduce uncertainty when allocating resources to project tasks, a resource manager can perform scenario analysis provided by predictive capabilities of an RM tool. You can change different parameters, e.g., try various resource allocation options, and see what it will lead to. The review of possible outcomes provides the basis for more efficient resource allocation decisions.
Integrations with human resource management systems
When allocating resources to project tasks, a resource manager also needs the information on employees’ absences (days off, sick leaves, training, etc.). Companies usually use centralized human resource management systems that keep all this information. If a resource management tool integrates with an HRM system, a resource manager doesn’t have to send requests to the HR department anymore, as it will always be at hand in an RM tool. It saves time and significantly simplifies the resource allocation process.
Quick access to all the data on employees’ skills, capacity, and availability
To make the right resource allocation decisions, a resource manager has to take into account team members’ skills, capacity, and availability. RM solutions keep all this information, so that a resource manager working in a multi-project setting can quickly and easily find a perfectly matching resource for completing a project task.
The aforementioned and other functionality is available in Epicflow, a multi-project resource management solution that has been designed specifically to address the challenges of a multi-project context. It facilitates maximum efficient resource utilization and smooth project flow, while its predictive capabilities make it possible to detect bottlenecks before they cause troubles to the workflow.
Want to know how to make your resource allocation process as efficient as possible with Epicflow? Book a call with our expert.