Why is Managing Resources Important?
If you’ve been around the project management block before, you’ve probably heard the term “resource management.” While the phrase may seem a little ambiguous to outsiders, in most cases it means something very simple: using the right resources at the right times and in the right capacities to achieve a goal.
Every company has a natural symbiotic relationship when it comes to resource management: do stuff and we’ll pay you money. However, true resource management is more than just a simple input/output process.
With a more strategic approach to resource management, companies can improve outcomes, productivity, and profitability.
How Managing Resources Benefits Companies
A good resource management strategy includes knowing which resources are available, where their time may already be allocated, and how productive/profitable a resource is in certain scenarios. With the right resource management strategy, companies can reduce costs and improve productivity.
Below are some of the most significant ways resource management can improve company performance.
Deliver Projects & Services On Time
Effectively managing resources helps companies more consistently deliver projects and services on time. This is because better resource management helps improve insight into resource availability as well as improves timeline projections.
Using project management software to manage resources empowers project managers with a clearer view of which resources are available, what’s already on their plates, and how much time they have to work on a new project. Collective data also helps project managers have a clearer understanding of how much time is actually needed for projects. This helps to improve time projections and more strategically plan resources for successful delivery.
Improve Employee Satisfaction
A recent survey of employees on Glassdoor.com indicated that a common workplace complaint is having an unsustainably high workload. While every company wants to make sure that they are maximizing resources, better resource management can ensure production is predictable, realistic, and sustainable. After all, an employee consistently working overtime can be at risk for disengagement or turnover.
Strategically using resource management can help project managers see the current workloads of their team members, the time they have available, and the time it usually takes for them to complete similar tasks. Armed with this information, project managers can better assign tasks based on the current resource landscape.
Inform Personnel Decisions
It’s sometimes difficult to pinpoint the time when a new hire (or fire) needs to be made. However, improved resource management can help to better inform these important decisions.
Resource management allows a project manager or hiring manager to see detailed information about current resource load, upcoming projects, and resource needs. This gives insight into whether the company currently has enough resources to fulfill existing and upcoming needs, over capacity, or whether there’s an immediate or projected need for more resources based on project trends.
Most financial experts will tell you that the profitability of a project starts during the proposal stage before the project ever takes place. The bid for a project must consider estimated costs to determine anticipated gross profits.
More strategic management of resources helps improve the profitability of a company by better anticipating and optimizing project costs. In most companies, personnel costs can be as much as 70% (or more) of project costs. This means the profitability of a project is largely reliant on whether or not the project is completed within the projected timeline and allocated amount of resources.
Strategic resource management helps provide more detailed information about resource performance to inform job costing and budgeting. It can also provide more information to the project manager about which resources are performing well, which can be improved, and whether there are predictable project areas that require more, or fewer, resources in the future.
Improve Customer Satisfaction
The satisfaction of your customers comes down to how well they feel their needs and expectations were met by your company. This means delivering a project on time, consistent with project specifications, and on budget.
With strategic resource management, project managers are better able to anticipate how long a project will take according to their team members’ current availability, historical performance, and additional resources. This helps provide more accurate estimates and ensures a more consistent and predictable delivery on those estimates.
What Does Resource Management Look Like?
Resource management can sometimes feel like an ambiguous puzzle, but with the right tools, it can be simple to more strategically allocate resources for predictable, repeatable success.
A project manager should choose a resource management tool that allows them to:
- See availability and current allocation of resources at a glance (no emails, phone calls, or waiting for responses required).
- View timelines to see when resources have time available to avoid overscheduling or creating unrealistic deadlines.
- View resource comparisons to analyze effectiveness and profitability.
- Model scenarios to see which combination of resources will be most effective for a particular project.
- Anticipate project needs based on historical resource performance for more accurate planning and budgeting.
Start Improving Resource Management
Would you like to see resource management in action? Visit our Mavenlink resource management page to learn more about how optimizing your resource management strategy can help you improve your business performance.