Resource management software is capable of providing visibility into company resources, balancing the resource load, and improving the overall company performance. But using them requires knowledge of all areas of their application.
In this article, we’ll take a look at the major ways you can use resource management software, explore how the tools work in each area, and share some tips and limitations of the software.
What is resource management software
A company has multiple resources:
- Human resources.
- Financial resources.
- Material resources.
- Intellectual property.
Resource management software can sometimes help with managing material resources, but those functions are typically taken on by enterprise resource planning (ERP) tools. Resource management tools traditionally focus on managing human resources in multi-project environments.
Capacity planning
Capacity planning is a core feature of most resource management tools. Capacity is the amount of work possible to be done by a company, typically measured in billable hours available. What capacity planning does is measure the total capacity of the company, compare that to the amount of work already assigned, and use that information for planning future activities.
The most basic feature you’ll find in resource management software related to capacity planning is the load graph that can be made for past, present, and future projects. It’s a simple graph that visualizes the company capacity against current load. The current load numbers are based on the aggregate of project estimates that are currently being executed.
Ideally, you want the load to be slightly lower than the capacity. If it’s lower than 80-90% capacity, your company is underutilizing resources and losing potential profits from taking on new projects. If it’s over 100%, the resources are overloaded and won’t be able to deliver the projects in the pipeline on time or to the right quality standards.
In many tools, you can view load not only for the company as a whole but also for each project, group of resources, or an individual resource.
Load graphs for current projects can be used to eliminate bottlenecks and predictive capacity planning is useful for assessing how many projects your organization can accept without sabotaging productivity.
Capacity planning tips
Capacity planning relies on correct estimates of how much time a project will take to complete. Underestimating that will lead to skewed analytics, so you want to be as accurate as possible when making such assessments.
Use a voting system to determine project requirements and take the opinions of key team members into account. If you find that you consistently underestimate the amount of time a project requires, add a time buffer ranging between 10% and 25% to each estimate.
Resource allocation
Resource allocation is the process of assigning resources to projects and tasks. It’s a more tactical endeavour than capacity planning and often involves project-level activities like analyzing load for bottlenecks and making decisions on assigning resources to projects based on their team and individual availability.
Load graphs also play a major role in this process. It lets you spot a bottleneck in the projects that are being executed and make decisions on resource reallocation that would eliminate it.
Another feature of resource management tools useful in this regard is scenario planning capabilities. These let you change portfolio composition and resource allocation in a simulated environment to view what set of project can be delivered under the existing resource constraints.
Resource allocation tips
With resource management tools, you can spot an overload and find the bottleneck that needs to be solved. To do this, once you find a portfolio-level overload, run load graph analysis for projects and groups of resources to narrow down the culprit. You will arrive at the specific set of projects or tasks that overload your resources and will be able to eliminate the bottleneck through rescheduling some of them.
Competence management
Competence management is an important part of the resource allocation process. It refers to analyzing the skillsets of resources and resource groups when making allocation decisions.
Poor understanding of the skills your resource base has leads to ineffective resource allocation. Assigning work with high skill requirements to employees with lower skill levels results in longer execution times and lower quality. Assigning entry-level tasks to skilled resources results in loss of engagement.
Resource management tools solve this problem by providing tools for viewing skill requirements of projects, tasks, and employees. This lets managers quickly align appropriately skilled resources with the right projects. In some cases, resource allocation tools provide a list of employees fit for each task directly in the task window, making the process even more efficient.
Competence management tips
Competence management features rely on accuracy of the inputs. To make the process as effective as possible, you’ll need to create a set of internal criteria you can use to judge skill requirements of projects and skill levels of employees.
Workload management
Workload management is a tactical activity that involves tracking and managing workload of individual resources on the project level. Here the load graph and scenario planning feature make up the bulk of the tools you’ll be using as a manager.
You’ll need to take a closer look at individual resource workload and balance it with the other employees. The goal here is to arrive at optimal utilization of all resources in the group, without either underload or overload.
Workload management tips
Project-level analytics relies heavily on accessing all the relevant data on resource capacity. For instance, if a group of projects are missing from the resource management software, the load analysis will show that resources included in those projects are underloaded, which is not the case. If it misses information on meetings the resources take part in, it will show a couple of hours of underload due to those meeting hours not being logged.
Ensure that all the relevant data is integrated with the tools to receive accurate analytics.
Performance monitoring
In terms of performance monitoring, resource management tools offer the following features:
- Load graph analysis.
- Budget burnup chart.
- Project progress tracking.
- Project statuses overview.
- Highlights of at-risk projects.
Most of these statistics can be viewed for the portfolio as a whole as well as for any combination of projects, tasks, and groups of resources.
Performance monitoring tips
As a high-level manager, it’s best to set up notifications for key metrics instead of reading full reports every time.
How can resource managent improve performance
Resource management software can improve your company’s performance across:
- Capacity planning.
- Resource allocation.
- Competence management.
- Workload management.
- Performance monitoring.
Keep in mind that the quality of analytics relies on correct data inputs and build a system that can integrate all the relevant data into your resource management solution.
