Why is resource planning important in project management?
A company’s most valuable resource is its workforce. When you are leading a team, one of the most important questions to ask yourself is: “How can I make sure that we deliver this project on time and within the budget?”
Tackling supply versus demand problems within businesses is undoubtedly difficult. So how do you ensure delivering projects without overworking your employees?
The answer to your question is resource planning and to help you do that, resource management software can be a handy tool!
A company’s efficient resource management includes
● Planning for the future,
● Appropriate scheduling of activities, and
● Ensuring employee engagement.
Without these three key components, organizations suffer from both resource ineffectiveness as well as resource inefficiency.
In addition, resource managers must be proactive and decisive when making decisions since it will affect the organization’s business objectives. If they take any shortcut, this could impact the company’s productivity, performance, or profitability.
That is why today’s article will highlight the basics of resource management software and its importance in effective project management.
First thing first, let us begin with:
What Is Resource Planning?
Resource planning is the process of forecasting, identifying, and allocating to multiple projects and programs aimed at delivering successful projects as well as manage the twin dimensions of resource utilization and productivity. .
Let’s try to understand with an example:
Say you have an IT company, and a global client has sent you a software development project to be executed in a year or so.
Project managers will collaborate with the client to determine requirements and scope for a project, plan resource demand based on these requirements, and request relevant resources from the organization.
The resource managers will now evaluate the new requirement, determine the gap between resources needed and available resources, and look for different ways to fill this gap. This could include either finding more workers from outside organizations or upskilling the existing workforce.
The ability to forecast requirements, plan for available or needed resources, and allocate the assets of a business to use them effectively and efficiently is known as resource planning.
Why Is Resource Planning Important?
There are several benefits of using resource management in a business to secure success and scalability. Here are some of the benefits of resource planning:
1. Allows project resource planning for pipeline projects
To avoid crippling project delays, companies are taking better control of their resources with intelligent resource planning. However, without sufficient workforce or on-demand hiring costs being so high, last minute decisions makes this difficult for most businesses with financial constraints..
So, to manage these issues more effectively, organizations must plan out future needs by using forecasting techniques and managing existing employees’ skills well enough. Doing so ensures that there is adequate l time to create backup resources in case an employee moves to another role or exits the organization.
2. Bridge the capacity gap proactively.
Demand forecasting provides valuable insights on the gap between supply and demand of resources by comparing them. Based on this data, managers can implement resourcing relevant strategies to bridge capacity and resource shortages.
Let’s understand it with the following two scenarios.
- Excess of resources
When demand is less than capacity, excess resources are created. These can be reduced by moving forward with future projects, adjusting timelines on others to create more time for this project to finish sooner, or redeploying the resource in other work that may have a higher priority.
- Shortfall of resources
If the demand for resources outstrips their supply, the result is — resource scarcity. There are two ways to resolve this problem: first, exploring skilled resources currently on the bench . In case this does not work, then the organization could source these resources externally. . They hire resources through recommendations and recruiting a freelance workforce from partner vendors.
3. Optimize project resource costs significantly
A resource plan is an effective way for managers to make data-driven decisions about resources. They can allocate a cost-effective global or local resource, they have enough lead time before the project begins, and if necessary, they can conduct planned hiring in place of last-minute activities. A good manager will also create the right mix of resources that suit budget needs.
4. Improved resource utilization
Resource capacity planning software allows managers to get a broad perspective of all their resources and where each one is allocated. They can also use these reports for forecast vs. actual comparisons, optimizing their utilization strategies accordingly.
In addition, resource schedulers enable managers to move professionals from non-billable projects to billable ones in line with their skill set so that employees will always remain productive when needed most.
5. Ensures Competent resource allocation across a matrix organization
A resource scheduler makes it easier for managers to select the most fitting resources and assign them to project work, given that they are working under a shared service model. This process is beneficial as projects can optimize a proficient workforce, and employees get opportunities across different departments or locations.
6. Deliver project on time and within budget
To be successful, project managers must meet deadlines and avoid budget overruns. To do this, they should use forecast vs. actual reports to monitor performance regularly.
A resource management tool can help them by providing heat maps tools to track their activity levels across projects. This will ultimately lead to certain metrics that are important in determining overall success or failure: client satisfaction rates, retention rate/loyalty from employees & clients, work completion speed, etc.
In The End
I am sure by now you will have a clear idea about resource planning and how resource management software can help you plan effectively and efficiently, which will help you and your company achieve new success every day.
