10 Reasons Why Resource Management is Crucial for a Business

March 8, 2021

Each day the world market is becoming increasingly competitive and volatile for one reason or the other. These fluctuations have become the new normal of the 2020s. Consequently, survival for many businesses is at stake where even high performing companies are finding it hard to protect their profitability and achieve sustainable growth.

In such an environment, companies must prioritize managing resources most efficiently as they are the biggest investment of almost all businesses. This can be made possible only by having an efficient Resource Scheduling and Management System. Such a system can reduce resourcing costs significantly, improve profitability, and help you overcome market volatility.

Maximize Productive Utilization

1. What is a Resource Management System?

Resource Management is the process of utilizing various types of business resources effectively and efficiently across the enterprise. Enterprise resources include workforce, assets, facilities, equipment, etc.

The most important part of a resource management system is resource scheduling. It is the process of identifying and allocating resources to various types of activities. They are related to project work or non-project work like BAU, Support, admin, operation, etc.

When scheduling is focused only on the workforce is called workforce scheduling. In short, workforce scheduling is the process of identifying and allocating employees to projects at a high level.

Resource allocation is an alternate word for resource scheduling. Likewise, resource allocation is the process of identifying and allocating resources to projects at a high level.

Resource management centralizes information from various systems. They are human resources, skills, current projects, future pipeline projects, resource demand/ allocation, vacations, non-project activities, etc.

This establishes a single source of truth for resource demand across the enterprise. It facilitates real-time forecasting and early warning about resource shortage/ excesses, utilization, project vacancies, on the bench, revenue, margins, etc. So that the business can take corrective actions ahead of time.

The Fundamentals of Leadership in Project Management

2. Importance of Resource Management Solution

Over the last decade, Resource Scheduling Techniques has become a crucial part of high performing businesses around the world. Here are the top ten reasons why these businesses have adopted this solution

Reason #1: Eliminate Silos of Spreadsheet Based Schedules

Spreadsheets for resource allocations are cumbersome, very limiting and hard to maintain. So, effective resource scheduling solution will help establish a unified source of truth.

It can eliminate silos of resource allocation spreadsheets with a single enterprise-wide resource schedule. It will keep the concerned manager informed of all resource allocations and availability. This helps your business go much beyond the basic allocation of resources.

Reason #2: Build Enterprise-Wide Visibility

Reason #2: Build Enterprise-Wide Visibility

An efficient business must build a bird’s eye view of all enterprise resources capacity and resource competencies. It also must capture every type of work activity performed by these resources. Activities can be project-related or non-project related i.e. BAU, administrative, support, operational, vacations, etc.

Complete visibility of resources and work is the stepping stone towards efficient usage of enterprise resources.

Reason #3: Deploy a Competent Resource

Scheduling the right person with the right skills is crucial for a project to finish within budgeted time and cost. An efficient resource management methodology can help you identify and instantly allocate competent resources. It will be based on availability, skills, experience, qualifications, location, team, resource cost rate, and any other criteria your business requires.

https://www.saviom.com:444/blog/resources-capabilities-analysis-human-resource-perspective/

Reason # 4: Maximize Billable & Strategic Utilization

Nowadays most of the businesses are having their employees working more than the standard hours. It doesn’t necessarily translate into improved business performance due to the employees wasting their valuable time on non-billable activities. They also could be working on non-strategic projects or low priority projects

An effective resource capacity planning system can help you forecast billable and strategic utilization of resources ahead of time. You can mobilize your costly resources from non-billable or low priority work to billable or high priority projects.

Reason # 5: Forecast Shortfall and Excess of Resources

Forecasting overall resource demand related to the project/non-project work is a critical part of capacity planning in resource management. It provides foresight into future shortages or excesses of resources.

So that the business can adjust project timelines, retrain current employees, or hire a contingent workforce ahead of time.

https://www.saviom.com:444/blog/how-to-measure-resource-capacity-and-demand/

Reason # 6: Resolve challenges of matrix management

Most businesses around the world have adopted a matrix organization structure in order to utilize the resource pool efficiently. This structure brings its own set of logistic and management challenges with the potential to create business chaos.

An efficient resource management system provides the right visibility to the right stakeholders. It helps them manage resources efficiently based on the dimensions managed in a matrixed organization structure.

Reason #7: Reduce Resourcing Cost

Listed below are some of the ways an efficient resource management techniques can help you reduce resource costs significantly

  • Eliminate under/over skilled resources on projects
  • Utilize cost-effective global resources without compromising quality
  • Improve billable and strategic resource utilization
  • Avoid last-minute hiring cost with proper capacity planning
  • Minimize hiring/firing cycles by aligning project workload with workforce capacity
  • Minimize unplanned attrition.

https://www.saviom.com:444/blog/resource-management-a-comprehensive-handbook-for-project-managers/

Reason # 8: Improve Project Delivery Time & Cost

An effective resource management solution helps you forecast and track various key performance indicators (KPI) related to the resources and projects. This can help the business take corrective action proactively and control project delivery time and costs.

Reason #9: Build an Optimized Workforce

Effective capacity planning in resource planning helps you forecast the gap between resource capacity against volatile demand. Proactive resourcing treatment can be applied ahead of time to ensure that the workforce has the right capacity matching the demand.

https://www.saviom.com:444/blog/workforce-planning-how-to-master-it-for-business-efficiency/

Reason #10: Gain Real-Time Business Intelligence

Resource scheduling has fast-changing business dynamics. It is caused due to changing project priorities, and resourcing volatilities create the need for real-time reports.

An effective resource scheduling and management software can provide real-time business intelligence with reports, analytics, and dashboards. It helps the management to make effective decisions based on the current facts.

3.The SAVIOM Solution

SAVIOM is the market leader in providing a futuristic solution for the effective management of resources. It has more than 20 years of experience working with high valued global companies around the world. SAVIOM also provides tools for project portfolio management, professional service automation, and efficient workforce planning. So, SAVIOM can help your business to establish an efficient system geared towards your specific business challenges.

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