Project management is no walk in the park. It takes a very skilled person to do it successfully — resources are often limited, while the amount of things that can go wrong is not.
However, good planning and allocating resources properly can come to the rescue. If you do it right, you’ll likely manage to bring the project to an end successfully, without major chaos occurring.
In this article, we’ll learn how to track resource allocation and why it’s important.
Table of contents
- What is resource allocation?
- Importance of resource allocation
- How to track resource allocation
What is resource allocation?
According to the PMI’s survey, only 26% of companies always use resource management to estimate and allocate resources, while 36% use it often. What is that and why should it be used more frequently?
Resource allocation, or resource scheduling, is a process of identifying and assigning resources in a way that will bring the most success in completing your tasks. Scheduling resources in advance and tracking your team’s progress have a role in resource allocation as well. It’s a short-term plan that will help you in pursuit of a bigger goal.
Resources are key players in project management and allocating them gives you a clear overview of what has to be done.
There are different types of resources:
- People: Each team member has a unique skillset and brings something different to the table. The more diverse a team is, the better. According to Harvard Business Review, teams that consist of people of different ages, cultural backgrounds, sexes, and races tend to be more objective and innovative.
- Equipment and machinery: Depending on the project, it could be a computer program, a hammer, a set of brushes, or a bulldozer. Part of resource allocation is deciding which exact equipment and tools will be used, who will use it, and for how long.
- Materials: Consumables used in a project, such as stationery, paint, or gas used for travel.
- Facilities: Buildings and work areas — a place where you work.
These are the three resource allocation decisions you should keep in mind. And, here are the three questions that lead to them:
- What? (Which goods are produced?);
- How? (How are they produced?);
- For whom? (Who gets them?).
Resource allocation example
Let’s say your project is painting a mural. Resource allocation would be:
- Finding the painters whose art style fit the project requirements and the idea;
- Deciding what part of the budget will go to buying materials and supplies and what part is going towards directly paying the artists;
- Deciding what type of paint to buy and in which colors;
- Determining the deadline, and so on.
After you’ve finished all of that, your job is not done yet. You ended up with two painters with different skillsets, 10 cans of acrylic paint, 6 cans of spray paint, a ladder, 3 sets of brushes, and a certain amount of time to finish it. Those are your resources. How will the two painters divide the brushes? Will both of them get to use the ladder, and if yes, for how long? What would be an ideal daily workload? Who will paint which part of the mural?
Assigning the right team member(s) to a specific task is one of the most important aspects of resource allocation. The task complexity must match their skill level — if you give a simple, entry-level task to an experienced employee or a complicated task to a new hire, you won’t get the best results. In the first case, the project cost would be unnecessarily high. The latter would cause a lot of stress and the results probably won’t be satisfactory.
Importance of resource allocation
Resource allocation is more than just delegating tasks — having the right resources at the right moment can make a difference between success and failure. Not doing resource allocation properly can result in missed deadlines, delayed or unfinished tasks, blown-up costs, and overall chaos.
A way to avoid that is making sure you’re going to have all the resources available when you need them. Allocating resources in advance helps identify if any source is unavailable and plan further steps around that.
Benefits of good resource allocation also include:
- Significantly reduced costs;
- Achieving the best possible outcome with existing resources and constraints;
- Easier juggling between multiple projects;
- Maximized productivity as it helps finish tasks as fast as possible without compromising quality;
- Eliminating a lot of risk, as you would go over potential risks beforehand.
How to track resource allocation
These are the steps of tracking resource allocation.
Identify resources’ availability
You should first determine who and what are your available resources and, in the case of human resources:
- What skills do they possess;
- How many of them have skills that fit the project requirements;
- How long are they available to work on the project.
After you have a clear idea of who and what you’re working with, you can start allocating those resources. Also, be aware of the factors such as: are your team members going on vacation and when, are they sick, what’s the condition of the equipment you’re working with, what’s the duration of the office space lease, etc.
💡 You may find this useful: What is full-time equivalent and how to calculate it (+ free FTE calculators).
Know the scope of the project
Before you start working, you and your team have to have a deep understanding of your project as a whole, as well as all of its aspects. That includes, but is not limited to:
- Defining the goal of the project itself, as well as every milestone;
- Determining everyone’s role, responsibilities, and expected workload;
- Defining the project’s duration;
- Managing expectations;
- Identifying constraints that limit the project and possible ways to overcome them;
- Going over potential risks.
Making the project scope as clear as possible will help you avoid potential misunderstandings and make everything go smoother.
Divide the project into tasks and match them with resources
After you all get to know the project, divide it into tasks and assign them to the necessary resources. Along with tasks, list their duration, deadline, team members who’ll do them, required skills, and location. It’s crucial to be realistic while doing this step and estimate correctly — especially when it comes to time and budget.
With all of this information in mind, you can forecast needed resources for each task as efficiently as possible.
PMI’s survey revealed that, of the projects started that were deemed failures, in 26% of cases the inaccurate time estimate was the primary cause.
To have a better idea of time spent and to be able to control it better, track your time. That way, you’ll also be able to:
- Create a realistic timeframe for the project;
- Ensure your project is profitable;
- Track the progress and overall performance of your team;
- Calculate billable and non-billable hours;
- Make sure tasks are done on schedule and anticipate possible delays.
Track resource utilization
When you’re managing a project, you have to determine if you’re using the most of what you have. Or maybe there are resources that are over or underutilized? Both can bring their own set of issues, so it’s a good idea to track resource utilization, just as you would track projects and tasks or time.
Resource utilization goes hand in hand with resource allocation. It entails measuring how effectively the available resources are utilized and helps you maximize productivity.
There are a few easy formulas to calculate (human) resource utilization, or how much your team spends working:
- Resource utilization = Busy time / Available time
- Resource utilization = Planned working hours (bookings) / Available hours
- Resource utilization = Recorded working hours / Available hours
Benefits of this practice include better ROI as a result of maximum utilization, better visibility, reduced risk of oversights, and avoiding burnout (as it’s a way to prevent overworking).
Re-allocate if necessary
It’s not unusual for a project to go through a couple of changes until it’s finished, whether it’s the change of budget, duration, or scope. With each change, you’ll probably need to re-allocate resources to fit the new circumstances.
Also, it would be a good idea to review and analyze how each task and/or project went in regards to resource allocation. Have you done it effectively? Did you go over the budget or extend the deadline? Is there something you could have done differently? Doing this and implementing necessary changes is detrimental to future improvement.
Over-allocation means either 1) taking allocation resources to excessive measures or 2) allocating too many tasks. Just as a computer would bug if it has to process too many things at once, your team members won’t be able to do their best if they’re overworked. It can cause high stress levels and burnout — and they don’t result in anything good.
Resource allocation is an important aspect of project management. If you manage to do it correctly, your life would become much easier as you would avoid a lot of potential issues. Some of the best resource allocation practices are: identifying resources’ availability, getting familiar with the project’s scope, tracking time and resource utilization, and making sure you’re not over-allocating.
✉️ Do you track resource allocation? What are the tips that help you the most with that? Write us at email@example.com for a chance to include your answer in one of the future posts.