The effective allocation and utilization of resources are crucial for business operations. Successfully managing them allows companies to generate consistent profits, experience growth, and, eventually, scale up. That’s what resource management is all about.
In this article, we’ll talk about the main ideas behind resource management to give you a better idea of what it is and why it’s important. We’ll also share the types of tools you can use to improve resource management in your company.
Resource management is a process of organizing and distributing various types of resources, such as people, funds, and equipment, to a particular project.
At its core, resource management is about ensuring that all the right resources are accessible at the exact time they’re needed and for a specific type of work. It allows businesses to take maximum advantage of the available company resources to successfully complete projects.
Resource management, as one of the aspects of project management, aims to provide more goods or services with the least amount of resources while taking into account and maintaining the expected quality levels of those goods or services.
If implemented correctly, resource management can decrease waste and improve efficiency and the overall business optimization of various processes. It also enables companies to cut back on idle time and prevent resource overutilization.
The most common benefits of resource management are:
A big part of proper resource management revolves around scheduling and prioritizing tasks or projects. This essentially means that time management is an important part of resource management as it allows companies to reduce bottlenecks, project delays, keep deadlines, etc.
The two practices are deeply intertwined. Good time management makes resource management easier and vice versa: good resource management inevitably leads to good time management, as it revolves around scheduling and prioritization.
With good resource management, companies can ensure that all of the resources at their disposal are efficiently allocated to various projects or tasks. This not only prevents the over or under utilization of specific resources, but it also leads to improved business productivity and waste reduction.
Effective resource management can aid in cost control. It allows companies to cut back on redundant expenditures they would otherwise make on surplus resources or ineffective procedures.
Every company’s goal is to utilize its resources to their fullest potential. Resource management is the strategy that can make that happen and that can help businesses optimize work procedures, performances, and ROI ratio.
Every project is bound by different resource constraints, such as time, project budget, personnel or available equipment. With good resource management, companies can ensure that these and other types of resource limitations are managed more effectively. This can in turn increase the project success rate and ensure that every project you take on ends up being profitable.
Resource scheduling is the process of identifying, planning, and allocating resources for a specific period of time and for the purpose of successfully completing a particular set of tasks within a given project. The goal of resource scheduling is to prevent the over- or under-utilization of resources and allow companies to deploy a specific type of resource at exactly the right time.
Resource scheduling includes creating a project timeline that outlines when and where each type of resource will be used. It takes into account various factors, such as resource availability, project deadlines, workforce capacity, numerous task dependencies, etc.
Some components of resource scheduling are:
Resource utilization focuses on calculating the time specific resources are used for different tasks and then comparing that time to the availability of said resources. For example, it can be used to measure the amount of time various employees spend on different tasks and compare that time to their availability. Additionally, this metric is considered one the most common key performance indicators (or KPIs) as it can impact a company's or a project’s profitability.
There are numerous ways to measure resource utilization. Most commonly, it’s done by taking into account:
By tracking the utilization of different types of resources, companies can shift them around when required to further boost billable utilization and ultimately, increase profits.
Resource estimation allows companies to forecast the utilization of various resources. This allows them to predict which resources might end up overused and which ones could be underutilized. It also allows for better capacity and workforce management.
In software development, resource estimation will involve assessing the need for human resources. For example, a manager could estimate that a specific project will need 4 software engineers for 8 months, with an approximate cost of $500,000. The resource estimation will consider skill sets, various phases, amount of tasks, historical data, etc. After it’s completed, the project manager can hire adequate personnel, plan a budget, and keep the project on track and within deadlines.
Resource planning encompasses the entire process of organizing, estimating, allocating, and deploying resources in the most efficient and productive manner. The most common types of resources are:
The objective of resource planning is to ensure that all resources are used effectively, with minimum waste, while also allowing companies to meet their business goals.
Resource leveling is all about managing workloads and ensuring that tasks are evenly distributed across all company resources.
Let's imagine a project in which a team of developers is working on different parts of an app. Now, let’s say that the project manager identifies two major tasks that can only be performed by a senior developer. But, the team only has one senior programmer.
If resource leveling is not used, the sole senior developer might end up overworked, which can lead to burnout and project delays. To avoid negative outcomes, the project manager should make adjustments to the schedule and allocate additional time for those tasks.
Resource smoothing ensures that resources don’t end up overused.
Let’s say that a specific hotel has increased occupancy during the summer season and the current workforce is not able to appropriately handle the surge in demand. To reduce the impact and overall workload, managers can employ resource smoothing to hire seasonal workers to help with the newfound demand and distribute the workload equally.
Poorly managing resources and adopting inadequate strategies can negatively affect various business operations and ultimately harm a company's bottom line.
Here are just some of its negative ramifications:
Using modern digital tools for resource management can help companies deal with various issues, especially when it comes to project management and business operations. These tools can help companies:
Some of the most common types of tools that can be used for resource management include:
Although not specifically designed for resource management, time-tracking software can be used to collect valuable information that can later be leveraged for resource management purposes.
Time-tracking apps can be used to gather data about:
Additionally, a lot of time-tracking apps, such as My Hours, can be easily integrated with various resource management tools allowing companies to take full advantage of modern technology.
Project management software refers to any tool that can help companies plan, control, and carry out various types of projects, in a more efficient manner. They can be used for things such as task and project planning, time and progress tracking, generation reports, and so much more.
And, they can also be used for resource management. Although not every tool of this type will provide users with the full scope of resource management features, most of them will come equipped with at least one or two useful features. Here are some examples of project management tools that can be used for managing resources:
Resource management software refers to the type of digital tools specifically designed to help with managing resources.
They aim to solve and streamline various issues modern companies face, ranging anywhere from work overutilization and missing deadlines to full-on project failure.
Resource management tools can be extremely helpful for:
Some of the most popular resource management software includes:
