PPM Resource Management: Complete Guide to Optimizing Portfolio Resources

In large organizations with multiple diversified resources and multiple projects running in parallel, managing resources can be problematic. With no framework, resources can become overloaded and stop performing as expected, leading to longer lead times, missing deadlines, and ultimately, loss of revenue.

Implementing PPM resource management can help fix many of these problems. In this article, we’ll explore what it is, how it works, and how it can help your organization excel.

Key takeaways:

• PPM resource management is a strategic process aimed at planning, allocating, and optimizing resources across multiple projects.
• It allows portfolio managers to gain better visibility into their resource constraints and improve resource utilization across projects.
• Challenges of PPM resource management include data integration, project assessment, resource overload and conflicts, prioritization, and lack of a resource-centric culture.
• Best practices for managing resources at the PPM level are taking input from the team, accurate data integration, continuous monitoring, integration of resource management into the company fully, and regularly reassessing workflows.

What is Resource Management in PPM?    

Portfolio resource management is a subset of PPM practices that are focused on providing organizations with the ability to assign resources optimally with resource capacity and skills in mind [1]. It’s a branch of PPM that specifically focuses on managing shared  resources across the portfolio with the goal of optimizing their utilization and aligning available capacity with strategic objectives

The Difference Between PPM and Resource Management

The key differences between the two processes can help understand PPM resource management better.

	Project portfolio management	PPM resource management
Main focus	Ensuring that a company is doing the right projects	Coordination of shared resources across projects of the portfolio
Goals	Ensure that projects are executed on time, within budget, and in line with strategic objectives	Ensure that resources are utilized optimally across the portfolio
Processes	Project prioritization, resource management, risk management, financial management	Capacity management, workload management, resource scheduling, resource utilization tracking,
Hierarchy	Contains resource management	Is a part of portfolio management

Ultimately, both processes typically use the same set of tools and are a part of the same framework.

Key Components of PPM Resource Management

The key processes in portfolio resource management include:

• Capacity planning. Analyzing resource capacity to form a realistic understanding of how much work can be assigned.
• Capacity forecasting. Predicting capacity in the future for better long-term capacity planning.
• Skill management. Mapping resource skill levels to improve quality of resource assignment.
• Resource allocation. Distributing resources across projects in line with project priorities and resources’ capacity. 
• Workload management. Balancing tasks across teams and resources to ensure optimal load on a tactical level.
• Resource conflict resolution. Finding resource bottlenecks and rescheduling resources to resolve them.

Benefits of PPM resource management

A well-executed PPM resource management strategy can lead to multiple benefits across different areas of portfolio management.

• Centralized resource visibility and control. Resource management requires centralizing all of the data on diversified company resources into a single source of truth, which allows for improved visibility.
• Shared resource utilization optimization. Proper resource management practices allow for making optimal resource allocation decisions and avoiding overloading or underloading company resources.
• Aligning strategy with execution. Planning and execution are based on actual resource capacity rather than assumptions, which ensures that what is planned can realistically be delivered. 
• Reduced bottlenecks. Resource planning allows companies to find potential operational risks like bottlenecks or resource conflicts and fix them before they cause delays.
• Improved planning capabilities. PPM resource management allows for planning work more realistically, in line with resource constraints.
• Better financial forecasting. The ability to effectively plan projects with resource constraints considerations allows for improved understanding of project costs.
• Increased throughput. Resolving resource conflicts and keeping resource load at an optimal level makes it possible to deliver more with the same resources  and increase throughput.

Stephen Devaux, project management theorist and consultant says that “The best portfolio is not the one with the most projects — but the one with the highest value per resource.”

Resource management at PPM level allows organizations to create the maximum amount of business value with the resources available to them, and this makes it indispensable in multi-project environments.

PPM Resource Management Process in 6 Steps

Now that you have a better understanding of what PPM resource management is, let’s take a detour over the resource management process.

Gathering and integrating data

The first step is to centralize storage of all data related to resource management. This includes:

• Data on available work hours in your resource pool.
• Data on skill sets of resources and resource groups.
• Data on project resource estimates.
• Data on current resource distribution.
• Data on sick days and vacations.

Without all of this resource and project data, it’s impossible to analyze and predict resource capacity, which is essential for management of resources on the portfolio level.

Ensure that all of the essential data is centrally stored in your resource management solution and set up automatic integrations with related data sources to avoid manual work. If your organization currently has a siloed approach to data storage, with project and HR data stored by different departments instead of centrally, it might take some major reform in terms of data management.

Analyzing and planning capacity

The next step is to analyze current capacity: organizations need to understand the difference between total demand coming from projects and available resource capacity. For example, in Epicflow, it’s done with the help of a Future Load Graph, an instrument that compares the total available capacity, the sum of all available work hours, to the current load, the sum of assigned work hours across all projects.

From the initial analysis, three major options are possible.

• The load is around 80-90%. This is considered optimal, as performing under 100% load leaves no room for small delays and constantly stresses the resources.
• The load is significantly under 100%. This means your organization has room to take on new projects and is currently losing revenue due to underload.
• The load is over 100%. This means resources are overloaded and will perform less productively, leading to bottlenecks and project delays.

You can view the load analysis for the whole portfolio, and can narrow it down to specific programs, projects, resource groups or individual resources. This can help you find the underloaded or overloaded groups to fix the issues.

Analyze the capacity months in advance based on the projects already planned and gauge how much work hours are left to be assigned to other projects.

Read more: How to Make Project Decisions Faster with Epicflow

Priority-based resource allocation

Based on available capacity insights and projects’ business value, organizations can decide which projects to executive and which should be postponed. After that, they can allocate available resources to the highest priority projects. 

Workload balancing

If resources are overloaded, which is a symptom of low resource management maturity, they need to be investigated and resolved. To resolve a bottleneck, an overloaded resource group that blocks project execution:

• Find the resource group or resource that is overloaded.
• Find what projects or tasks are overloading it.
• Eliminate overload through reallocating resources or extending timelines of projects or tasks with less priority.

Performance tracking and analytics

After those decisions are made, track resource performance. For each project in the portfolio, constantly track how much budget is spent, how much budget is remaining according to initial estimations, and how close the project is to completing the milestones.

If a project is at risk of being delivered later than expected or with budget overreach, investigate the reasons and resolve them with workload balancing.

Also, analyze performance as a whole and assess whether you need to review the resource management process if performance does not meet desired KPIs.

Read more: 10 PMO KPIs: Essential Metrics to Drive Project Portfolio Performance

Common Challenges in PPM Resource Management

A process as complex as PPM resource management has some inherent challenges. Here are the main ones.

Poor data integration and quality

An issue that can prevent success in a lot of portfolio-level management processes is the quality of data you provide. A missing piece of data on resources or projects can lead to skewed analytics and poor decision making as a result.

For instance, not integrating the HR system with resource management tools results in leaving out the data on vacations and sick leaves. Not adding all projects a team is working to your calculations on results in a falsely optimistic assessment of available capacity.

How to address this challenge

To avoid issues caused by this, you need to ensure that all of the information relevant to the resources being analyzed is uploaded into your software solution. It’s best if there’s an option to integrate your tools for automatic uploads.

Lack of resource-centric culture

The core idea behind resource management is that resources are the main constraint in accepting and executing projects, not budget. The thing is, even if a company has the money to execute the project, the ability to do so comes down to whether it has enough work hours to dedicate to it.

Outdated thinking about this issue that focuses on the budget instead of resource capacity often leads companies to take on more projects than they can realistically expect to execute. This results in bottlenecks, overloaded groups of resources that can’t deliver projects assigned to them on time simply because their workload is too high.

If your company has leadership with that line of thinking, it’s going to interfere with resource management as within this framework, you will often be rejecting projects that the budget concerns alone can accommodate.

How to address this challenge

Changing a company culture is not an easy task. Your company will have to invest in training courses and potentially spend time showcasing the benefits for the resource-oriented approach with the help of performance data.

Underestimating project resource needs

The accuracy of measuring workload depends on the accurate estimations of how many resources a project requires. This process, however, is not an easy one. Far too many companies have issues with creating far too optimistic estimates.

This will lead to project delivery being constantly delayed because the planning doesn’t coincide with the real state of resource capacity.

How to address this challenge

Estimating project cost can be a tricky process. To make it more accurate, you should:

• Involve team members in the consideration process.
• Use historical performance data.
• Use a voting system.
• Use scenario planning.
• Consider adding a buffer to your estimates.

Review your assessment process regularly and implement necessary changes if you see that your planning doesn’t coincide with the results.

Resource overload

One of the core challenges in resource management is resource overload. It happens when resources or resource groups are assigned more tasks than their capacity permits. This can happen for a variety of reasons but in all cases leads to a decrease in throughput.

How to address this challenge

Addressing the reason behind the overload is the main way of dealing with this problem. The main types of issues that lead to this are as follows:

• Lack of resource-oriented thinking. In this case, implement resource management techniques and workflows.
• Data integration issues. In this case, review what resource-oriented data is integrated into your resource management tools.
• Too much work in progress. In this case, reassess prioritization and stagger projects to focus on the high-impact ones first.

Resource conflicts

In multi-project environments, there’s always going to be some level of competition over the resources as there will always be less available work hours than projects the company wants to execute. This can lead to resource overload or tensions between teams, resulting in bottlenecks and inability to deliver projects on time.

How to address this challenge

Fixing this issue mostly comes down to allocating resources according to priority. When there’s a data-based prioritization of projects and tasks implemented in a company, resource conflicts will arise less frequently as all departments are on the same page about what work takes priority.

Poor portfolio prioritization

Lastly, resource allocation is bound by portfolio prioritization. Typically, resources are allocated to projects with the highest priority to ensure they are delivered first and with the best possible quality. 

The effectiveness of resource allocation in terms of achieving strategic company goals also depends on the quality of prioritization. If a company prioritizes the wrong projects, effective resource management only serves to deliver projects that do not produce any long-term value.

How to address this challenge

Portfolio prioritization is a topic in and of its own. The key techniques that ensure proper prioritization include:

• Reduce subjectivity in priority assessments.
• Manage stakeholder expectations of this process.
• Develop a prioritization methodology and apply it consistently.
• Review the prioritization workflow regularly.

Read more: Project Portfolio Optimization: A Guide to Maximizing Business Value

Best Practices for Effective PPM Resource Management

Managing resources is not a straightforward process, and many small improvements only come with experience. Let’s review best practices of resource management at the portfolio level to shorten your learning curve.

Focus on resource constraints when planning work

Resource capacity is the key limiting factor in portfolio execution. Effective planning starts by aligning demand with finite organizational capacity. 

Integrate data fully

The successful PPM resource management  relies heavily on having a complete set of data, including capacity, demand, skills, and project estimates. Ensure that you automate the integration of all important pieces of data.

Track resource performance

Not all projects go according to plan. To make sure you can spot issues early on, track resource performance in real-time. If you see that some resource groups are performing poorly, you may need to rebalance workload to prevent bottlenecks and execution delays.  

Take expert input

Historical performance data is one part of the picture when it comes to resource and skillset planning. Another important part is experienced employees’ input. Make sure you take their views on project resource requirements and their skills into account. 

Integrate resource management with the company

If done on its own, resource management may not produce desired results because both its inputs and outputs may be disconnected from the rest of the company. Integrate resource management into portfolio management, and more broadly, in company-wide decision making processes to achieve better results.

Reassess your approach regularly

Creating a portfolio resource management framework takes some time, even if you’re following best practices. Reassess your workflows regularly on a schedule and in cases where you find a significant flaw in your approach. This will help you refine your approach and manage resources better.

How PPM Software Improves Resource Management  

Let’s look at a couple of examples of how PPM resource management done with the right tools can change a company’s performance.

Improved planning capabilities and fixed underload in a manufacturing company

Arnold AG, a German metal parts manufacturer used Epicflow resource management software to solve the problems that were plaguing their company:

• Uncertain lead times.
• Inability to correctly set due dates.
• Siloed planning workflows.
• Lack of understanding of whether new projects can be taken on.

By implementing Epicflow and centralizing data storage, they were able to improve their visibility into the resources at their disposal, and on top of being able to plan projects more accurately, realized that new projects can be taken on without increasing headcount if inefficiencies were resolved.

Read more: The Effect of the Epicflow methodology on a Project Department from a Metal Company

Lead times cut by 30% without new hires in Dutch MoD

Dutch Ministry of Defence faced issues too common in large government portfolios:

• Too many projects in progress.
• Lack of clear prioritization.
• Focus on financial, not resource constraints.
• Overworked staff.

By implementing Epicflow’s resource management software, the MoD was able to see the resource constraints clearly, prioritize projects in a way that fits available resources, and cut lead times by 30% as a result.

By postponing lower priority projects to accommodate for resource constraints, Dutch MoD was able to deliver the most important projects 424 days earlier than expected.

Read more: Why Smarter Delivery Beats Bigger Spend: Experiment at the Dutch Ministry of Defense



How Epicflow Helps Optimize PPM Resource Management    

Epicflow provides a comprehensive suite of resource management tools that can help your portfolio-level efforts. Here’s a brief overview of related features.

• Portfolio visualization. Access resource performance data at a glance through various options in the dashboard, along with project and task data.
• Capacity planning. Analyze current and historical resource capacity with historical load graph to detect overload or underutilization.
• Capacity forecasting. Forecast future resource load and capacity utilization based on planned projects with the future load graph and anticipate potential bottlenecks.
• Skill management. Use competence management software to match resources with projects.
• Predictive analytics. What-if analysis allows you to simulate scenarios of different resource allocation or project scheduling decisions to view their impact on the portfolio and choose the optimal one.
• AI-based automatic resource optimization. Epicflow AI portfolio optimizer can automatically sort your organization’s portfolio based on project priority and resource constraints.
• Financial analytics. Suite of financial metrics allows you to track project resource costs, project budgets, margin rates, and performance indicators.

Book a call with our experts to learn more about Epicflow’s potential role on your company’s resource management efforts.

References

1. Pennypacker, J. S. (ed.) (2005). PM Solutions’ project portfolio management maturity model. Havertown, PA: Center for Business Practices.

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