The strength of any organization lies in its human resources. They are, after all, the most significant investment for all businesses. Organizations spend significant time and effort in hiring high-quality resources. They must be used to their fullest capability for the best possible outcome.
The principles of resource management address the effective utilization of the entire workforce. An ideal Resource Management Software can reduce resourcing costs significantly, improve profitability, and help you overcome market volatility.
Unfortunately, most organizations overlook the importance of comprehensive resource management. They continue to use the following legacy systems for this purpose:
- Silos of spreadsheets built with macros
- Home-grown half-baked systems
- Windows-based systems of the 1990s
- Entry-level resource scheduling software
These legacy systems are incapable of handling the complexities of matrix organizations and provide multi-dimensional project forecasting. An organization can improve both the top line and bottom line by investing in a robust resource management solution. There are two types of benefits- tangible, which is measurable or quantifiable, and intangible, which can be realized.
In this article, we discuss some of the advantages of Resource Management.
1. Business benefits of resource management
A resource management plan enables organizations to manage resources effectively, anticipate and mitigate risks proactively, and ensure smooth project delivery. Therefore, its benefits in business operations are abundant and far-reaching. So, let’s understand these advantages in detail:
A. Reduce project resource cost
Resource management is the process of utilizing different types of business resources efficiently and effectively. These resources can be human resources, assets, facilities, and equipment. Using the right resource management strategy, companies can minimize costs and improve productivity. A few techniques used to control resource costs are: –
- Allocate the right resources to the right project at the right time with enterprise scheduling.
- Create 360-degree visibility even in a complex matrixed organization and enable allocation of cost-effective global resources from any geographical location.
- Minimize reactive planning and last-minute hiring using an advanced capacity planning facility.
- Avoid wasteful hiring/firing costs by forecasting project vacancies, people on the bench, and hot skills.
B. Centralize and create visibility of resource competency
The workforce planning system provides visibility of people’s information across the matrix organization structure and controls the rights to modify them. The system can achieve 360-degree visibility into all types of work demands. It could be a project, non-project, BAU/admin, and vacations across the verticals of geography, functions, domains, and business units.
C. Optimize resource utilization across the enterprise
Businesses can reap benefits by utilizing resources on a billable or strategic project. It is critical to ensure that the project resources are allocated and utilized in the most efficient ways. Good resource management solutions can forecast resource utilization and proactively take corrective actions ahead of time. It will also provide real-time information to improve profitable utilization.
D. Plan resource capacity for current and pipeline project demands
Resource capacity planning first forecasts the gap between resource capacity and demand. Then, it comes up with an action plan to bridge this gap.
It has the following advantages:
- Reduce project resourcing costs across the enterprise.
- Deploy competent employees at the right time and cost.
- Forecast skill shortage and bridge the gap proactively.
- Forecast and ensure that excess capacity is not wasted.
- Align sales and delivery by forecasting pipeline opportunities.
E. Leverage resource skills within matrix organization structure
Matrix organizational structure allows the sharing of highly skilled resources between functional units and projects. Communications are open, which helps knowledge circulate throughout the organization with fewer hindrances. The following steps help achieve this:
- Get the visibility of cost-effective local and global resources across the world by skills for resource allocation.
- Provide role-based access for viewing resource competencies and taking action.
- Control the project budget by utilizing generic resources from low-cost locations.
- Implement a multi-location policy if local resources are unavailable for a specific skill.
- Utilize highly skilled resources to provide training and mentoring.
F. Improve organization health index of resources
For a successful organization, assigning resources to the right projects as per their skill set and experiences is essential.
Self-development, learning new skills, and keeping up to date with current technology trends motivate them. If they don’t receive the right opportunities from their resource managers, they end up spending much time on the bench. Consequently, their billable utilization suffers, and they may end up leaving the organization.
In a comprehensive resource management system, individualized portals, dashboards, and reports with powerful business intelligence allow decision-makers to monitor the overall health index of resource ecosystems.
- Build tailored portals, dashboards, analytics, and reports using highly configurable and expandable architecture.
- Control data visibility with a combination of security rights, portal designs, and filters.
G. Future proof your workforce against market volatility
Market volatility in the last few years is continuously impacting the business outlook of every organization. With the sudden outburst of the Covid-19 pandemic, it is getting harder to predict an organization’s growth and profitability.
In such conditions, most firms resort to reactive measures such as abrupt layoffs and halting new initiatives. It works in the short term but affects business sustainability adversely.
A functional capacity planning process that consists of the following steps will prepare you for an adverse situation:
- Bridge resource shortage proactively.
- Forward plan and utilize excess organizational resources.
- Build on-demand or contingent workforce.
- Reduce project resourcing costs across the enterprise.
H. Simulate before adapting using what-if analysis
What-if analysis helps to get the best possible ROI within existing resource constraints. It allows you to juggle around the resources and adjust the project’s timelines. Before making any decision, a critical analysis of the impact on resource capacity and utilization can be made. Some of the steps followed in the simulation techniques are:
- Build different scenarios (ideally three) for the current situation involving multiple projects.
- Simulate each scenario at a time and apply the available resource from the pool for the specific case.
- Carefully analyze different parameters such as overall utilization, people on the bench, and project overdue, if any, caused by resource allocation.
- Select the best scenario and apply it to the project schedule.
I. Deliver projects and services within time and budget
There are two primary components for measuring project success. Timely delivery and no budget overrun.
Effectively managing resources helps companies more consistently meet these two objectives. Project managers estimate different tasks keeping the resource capabilities in mind with the help of a project resource management tool. They can work together with a resource manager to identify competent resources for project activities and ensure that projects are delivered on time and within budget.
If an under-skilled resource gets the responsibility, the person takes more time than needed, which affects the timeline. At the same time, if a high-cost project resource is assigned the task, it will blow up the budget. The following guidelines can serve as an indicator of successful project delivery:
- Minimize under/over skilled-resources
- Use cost-effective resources wherever applicable
- Invest in the self-development of resources
- Identify resource shortfalls/excesses in advance
J. Improve employee and customer satisfaction
An employee consistently working overtime can be at risk of being unproductive or can leave the organization. The resource management system displays resource loading in real-time, ensuring that the person is not overworked or underutilized. Resources also have their aspirations and development plans, which can be accommodated in project resource planning.
On the other hand, achieving customer satisfaction is possible if the organization meets its project delivery commitments. The project’s success very much depends on the resource quality.
An ideal resource management tool is an enabler to achieve these two objectives.
Whether it’s project resource tracking, optimizing workforce utilization, improving project outcomes, controlling resource costs, or driving strategic growth, resource management offers a wide range of business benefits. It empowers companies to make the most of their valuable organizational resources, adapt to change, and thrive in dynamic environments.
Incorporating robust resource management tools and best practices should be a priority for any business looking to future-proof its workforce and achieve long-term success. Therefore, by recognizing the importance of resource management in project management and harnessing its benefits, firms can pave the way for a prosperous future and secure their position in today’s competitive marketplace.
Are you ready to invest in the right resource management tools to manage resources profitability?
3. The Glossary
4. The SAVIOM Solution
SAVIOM is the market leader in offering the most powerful and configurable solution for managing your enterprise resources effectively and efficiently. With over 20 years of experience, this Australian-based MNC has created its global presence across 50 countries and helped more than 100 customers achieve their business goals. SAVIOM also has products for project portfolio management, professional service automation, and workforce planning software that is customizable as per business requirements.