“If the resource allocation is not done properly, it will ultimately derail the project and adversely affect the business growth”– Dominic Barton
Resources being one of the most expensive investments for an organization, their skills and competencies must be leveraged to the maximum potential to improve return on investment. One of the essential steps to achieve that is ensuring the right resources are allocated to the right projects at the right time.
However, managers often face challenges such as scope changes, resource unavailability, mismatch in the skill set, etc., that hinder the allocation process. Therefore, it is necessary to mitigate these challenges ahead to prevent project delays and halts.
This article elaborates on the challenges involved during the resource allocation process and how SAVIOM’s resource management software can help overcome them.
Before delving deep, let us start with the basics,
- What is resource allocation in project management?
Resource allocation is the process of identifying and assigning various types of resources to projects for a certain period. It also involves tracking the resource’s workload throughout the project life cycle and reassigning them, if required. These resources can be human and non-human, including labor, equipment/tools, facilities, materials, budget, etc.
For example, architect positions are critical for IT project delivery and are often expensive and less in number since it is a niche-skilled resource. So, deciding whether to dedicate an architect to a particular project or book them on multiple projects is a part of the resource allocation strategy.
Now that the basic concept of resource allocation in project management is clear, let’s understand the challenges involved.
- Resource allocation challenges in project management
Allocating resources effectively across projects can become arduous due to some challenges. Below are some of the common allocation challenges in project management.
2.1 Frequent scope change
Stakeholders or clients may sometimes demand certain changes in the project scope during execution. These project changes can lead to fluctuating resource demands. As a result, managers find it challenging to determine the right resources to cater to these ever-changing or dynamic resource demands.
The last-minute firefighting to acquire these resources may cause incompetent resource allocation. It, in turn, can lead to sub-par deliverable quality, delays, budget overruns, and other repercussions. If the scope change requires resources to be released frequently, finding the right opportunities for them can become complicated and lead to increased bench size.
2.2 Lack of visibility into resource availability
Project managers fail to view and analyze resources’ current and future schedules due to the absence of centralized visibility into the talent pool. Moreover, the lack of business knowledge or communication gaps may cause inaccuracy in the estimation of the number of resources required for a project.
Additionally, some resources may fall sick or go on unplanned leave, which may cause further fluctuations in availability. All these factors cumulatively hinder the process of effective project resource allocation and cause issues like delays or budget overruns.
2.3 Mismatch in the skillset of resources
Due to the inability to forecast pipeline project requirements, project managers sometimes fail to assess the skill demands accurately. This results in the allocation of resources whose skills don’t match the project demands.
In case the resources allocated are overqualified, it increases the project costs. On the contrary, if underqualified or incompetent resources or those with partially matching skill sets are allocated, it can lead to subpar deliverable quality or delivery delays.
2.4 Project uncertainties forcing new resourcing strategies
Even after handling the scope and constraints, internal or external factors ranging from volatile market conditions, changes in the criteria for project prioritization, etc., can develop uncertainties during the project’s life cycle.
For instance, if a client requests the project manager to fast-track an ongoing project and complete it within 15 days, it becomes challenging to identify more resources at the eleventh hour. This can cause further delays or overutilization of already allocated resources.
2.5 Resource constraints in a multi-project environment
When an organization runs multiple projects at the same time, it needs to share resources across them. As resources, especially critically skilled ones, are often scarce in each department, it often leads to resource limitations.
Hence, when skill demands overlap among different projects, it often leads to negotiation with one or the other project manager for similar-skilled resources. Sometimes, it can lead to power conflicts between project managers regarding project prioritization, causing delivery delays.
2.6 Location and time-zone differences
Due to increased global competition, most organizations today have started implementing an onsite/offshore/nearshore delivery model. As resources in global projects are spread across different geographies with significant differences in time zones, a lack of coordination between key members is often noticed.
In addition, two or more countries with a huge difference in time zones result in a minimal number of overlapping business hours. As a result, it provides a small window to conduct important meetings, exchanges ideas, and convey updates and roadblocks on time. It further hampers the ability to decide which resources to deploy on which projects based on their working hours and availability.
Thus, resource allocation can be challenging without appropriate tools and techniques. However, an advanced resource management solution can help counter them effectively. The following section explains how.
How Can Resource Management Software Help?
SAVIOM’s resource management solution provides centralized visibility into resources and their profiles. It also provides advanced filters, including skills, competency levels, locations, and other resource-related attributes to identify and allocate the best-fit resources for the project.
In addition, capacity-vs-demand reports help managers get foresight into resource demands, determine skill gaps, and implement appropriate resourcing channels to fill them. It, therefore, helps make the workforce future-ready against market volatility.
Utilization reports facilitate real-time tracking of utilization levels and implement suitable optimization techniques like leveling or smoothing based on the project’s nature to ease the workload. In case a resource is underutilized, mobilizing resources from non-billable to billable work can help enhance billability.
Additionally, the tool provides the what-if analysis to build multiple resource allocation scenarios, assess and compare outcomes, and identify the best-fit resource plan to prioritize projects accordingly. This way, it helps ensure effective resource allocation and gain healthy profit margins.
“Strategy is simply resourcing allocation.” ~ Jack Welch, the former CEO of General Electric
An effective and competent resource allocation strategy forms one of the building blocks of project management. Though there can be several challenges involved, one can implement the right allocation strategy and leverage a robust resource management solution to ensure successful project delivery. It also helps reduce project costs and maximize resources’ productivity and business profitability.