Portfolio Resource Management: A Complete Guide

Project portfolio management is the core of any project-based organization that aims to reach its strategic objectives, and resource management plays a pivotal role in this process. Let’s consider portfolio resource management importance, its benefits and challenges, and tools to make it as effective as possible.

What Is Portfolio Resource Management?

Portfolio resource management is a process of allocating limited resources across a project portfolio to acquire a balanced resource workload, smooth workflow, and a bottleneck-free project environment to deliver the planned scope of work within the existing time and budget constraints.

What Is RPM in Project Management and Its Benefits for Project Management?

Project portfolio and resource management go hand-in-hand and can’t be considered apart. In one of our webinars, our researchers concluded that project portfolio management is resource management, which is an undeniable truth. Intelligent resource allocation is the basis of project management, not to speak of complex multi-project environments and project portfolios, where allocating resources to the right tasks and projects becomes a cornerstone of success. Project portfolio resource management involves both managing projects and their resources, with the main goal of delivering the portfolio within the established limits.

Effective project portfolio management, as well as efficient portfolio resource management, provides business leaders and their companies with the following benefits:

maximum productive teams as a result of intelligent resource allocation;
smooth project flow across the portfolio and timely delivery as a result of data-based decisions;
delivered strategic goals and increased ROI;
opportunities to grow and initiate additional projects.

Core Components of Portfolio Resource Management

Let’s now take a look at the main components of portfolio resource management to understand its nature and find ways to effectively deal with it:

Staff capacity planning

Portfolio resource planning helps understand how many resources a company has to compare the available capacity with the demand coming from the planned projects.

Resource demand forecasting

Analyzing new project and task requests is essential to understand the demand and compare it with the available resource capacity to successfully fill in the gap or take measures to increase the capacity.

Resource allocation

Resource allocation is the core component of portfolio resource management. Resources should be assigned to projects and tasks based on prioritization, task and resource requirements, and resource availability to ensure successful delivery.

Resource performance tracking

Besides traditional project progress monitoring, portfolio managers should constantly track real-time resource performance to make sure resources’ workload is balanced and nobody is overloaded.

Resource-related risk management

Efficient risk mitigation is a prerequisite for a strong resource portfolio. The main task here is to avoid overload and ensure a balanced workload in every resource team. Resource-related risks involve a sudden capacity drop, with further impossibility to match it with the existing demand. This is why it’s so important to manage risks and get prepared for uncertainty at all stages of a project life cycle.

The Portfolio Resource Management Process (Step-by-Step)

Now, as we’ve considered the components of portfolio resource management, let’s review the steps in portfolio resource management:

Assessing and measuring the capacity of project resources is the first step in project portfolio resource planning.
Evaluating the resource demand is an essential step of project portfolio and resource management as it helps build the bridge between available capacity and demand and understand if your resources will be able to cope with the required scope of work.
Prioritizing projects in a portfolio and tasks within them based on the critical path method (or another methodology) of the projects’ business values. This step is necessary for further intelligent resource assignment.
Allocating the right resources to the right tasks at the right time helps have the work done in the most efficient way possible.
Resource performance and project progress tracking allow you to keep an ear to the ground and timely react to any issues ruining the workflow.
Resource optimization based on scenario modelling lets you adjust the plan based on data-driven decisions.

As you can understand, a project portfolio is a set of multiple projects with a shared resource pool, which poses some resource management challenges that are relevant for complex multi-project environments, which we at Epicflow have been dealing with for years. Let’s review some of them.

Common Challenges in Portfolio Resource Management

1. Improper capacity planning

One of the biggest project resource management mistakes is making an inaccurate resource capacity plan. It may result in resource gaps between available resources and project demand for resources. In turn, this may lead to over-utilized resources, their overload, and further burnout. Missed due dates and high resource turnover are the frequent consequences. The solution? – The right capacity planning tool.

2. Bad resource allocation

One of the biggest resource management challenges is allocating resources improperly, for instance, assigning lower-priority tasks to them or allocating resources without regard to their competence and experience levels. This may result in a low quality of the work done, prolonged timelines, overload, and increased waiting times. The result is also missed due dates, budgets, and unsatisfied clients.

3. No access to real-time data

Effective resource management at the portfolio level requires real-time tracking of resource availability and workload to avoid resource management issues, such as bottleneck resources that hamper the workflow and lead to increased waiting times and significant delays. Unfortunately, many companies don’t have tools that allow resource managers to track the progress of the entire portfolio, which may result in the issues we mentioned above. Absence of real-time data also complicates making informed data-driven project decisions, which also affects portfolio resource management.

4. Unpreparedness for risks and uncertainty

Uncertainty is a companion of multi-project environments with a shared resource pool. This involves unexpected changes in a project plan or requirements, delays in task execution, unexpected changes in resource availability, and many more. Early detection of these changes, as well as effective mitigation of resource-related risks and dealing with uncertainty, are problematic for many companies due to the absence of the right tools to handle these challenges.

So, what’s the solution? Adopting portfolio resource management software can become a lifesaver for large companies running multiple projects with shared resources. Let’s see how exactly it can help.

Portfolio Resource Management Software as a Key to Effective Portfolio Management

Portfolio resource management software is a tool that helps companies reach their business goals by letting them deliver the planned scope of work and even initiate additional projects with their available resources, therefore, increasing ROI. These tools have everything a project manager needs to plan projects and resources, ensure efficient execution of project tasks, track project success and resource performance, and make informed project management decisions. Let’s have a closer look at the top features through the example of Epicflow.

Accurate capacity planning for future projects

Project resource planning becomes as simple as ABC: Epicflow resource capacity planning software automatically bridges the available capacity with the planned demand and gives an insight into the state of things at the resource level. As a result, a project/resource/portfolio manager knows if there are enough resources to meet the demand, or they need to apply some resource optimization techniques or hire extra people to cover the demand.

Automatic project and task prioritization

Epicflow prioritizes projects and tasks within them and adjusts the priorities immediately if changes happen. Management can see the priorities in the Pipeline, and project teams can check top-priority tasks in the Task List. Therefore, every project participant is focused on what matters at the moment, which increases the chances for project success, as the right parts of projects are done at the right time.

Human resource optimization in portfolio management

Epicflow improves resource utilization by giving resource allocation prompts based on capacity, competence, and task requirement analysis. What’s more, it keeps resource teams as effective as possible as it tracks resource workload in real time. With these resource management tools, managers can avoid resource overload and idleness and get the best results possible.

Access to real-time project and resource data

Portfolio resource management software like Epicflow becomes a single source of truth for everyone in the company, making stakeholders up-to-date and letting project/resource/portfolio managers track essential data in real time for effective decisions.

Risk detection and mitigation

Epicflow helps resolve resource-related risks with What-if scenario analysis, where users can check the consequences of any action in a simulation mode. They can share the environments, edit them, and finally accept the changes that are proven to bring the best results possible.

If a portfolio manager can see that the planned projects can’t be delivered within existing time and resource constraints, they can enable Project Staggering. This feature adjusts the project schedule in such a way that lower-priority projects are initiated later, as soon as the required resources cope with the higher-priority ones.

Conclusion

Portfolio resource management, as a process of planning and allocating resources across the project portfolio, maximizes team productivity and increases chances for successful delivery of all projects in the portfolio. Portfolio resource management software can resolve numerous challenges that companies frequently face: inaccurate capacity planning, bad resource allocation, lack of real-time project and resource data for informed decision-making, and risk mitigation.

FAQ

What is portfolio resource management?

Portfolio resource management is a process of planning and optimizing resources to successfully deliver all the planned projects in a portfolio within the known constraints.

What are the main challenges in portfolio resource management?

Improper capacity planning, bad resource allocation, lack of real-time data visibility, and unpreparedness for uncertainty and risks can affect the entire organization and ruin the success of the project portfolio and the whole organization.

What are the top portfolio resource management software features?

The top portfolio resource management software features are as follows:

Resource capacity planning
Competence management and resource allocation
Real-time project and task prioritization
Project progress and resource performance monitoring
What-if simulations for informed decision-making

How can Epicflow improve manufacturing workflows?

Epicflow helps manufacturers streamline the complex production process, reduce risks, utilize their resources most efficiently as well as deliver high-quality products on time and within budget.