The 5-step guide to effective resource management

Managing project resources can be a complex task, especially in large companies or those working on several projects at the same time.

However, by following a series of steps and with the support of certain technological solutions, it is possible to achieve a truly effective resource management in an agile and organized way.

What is resource management?

Resource management is a process that includes inventorying, analyzing, planning, coordinating, using and tracking all tools and elements available to successfully complete a project.

The main objective of resource management is to obtain an overview of all the tools, equipments and employees in order to plan the execution of a project in the most cost-effective manner and in the shortest possible time.

How important is resource management?

Good resource management is essential to ensure the viability of a project.

It includes defining objectives, planning on the basis of the budget, checking the availability of resources and monitoring them.

It must be based on three key values: efficiency, sustainability and cost reduction.

• Efficiency: use as few resources as possible to achieve maximum performance through an optimized time management.

• Sustainability: a sustainable management avoids limiting resources and allows them to perform at their best without overloading or overworking the project.

• Cost reduction: maximize return on investment by reducing costs as far as possible without jeopardizing the project, while respecting deadlines and objectives.

What types of resources can be allocated to projects?

Numerous resources may be required to complete a project. The main types include :

• material and technical resources management: these are the tools, components, licenses, equipment, machines and premises that will have to be physically used to achieve the project's objectives.

• human resources (or HR): this concerns the employees you'll need. It also includes employees management in the broadest sense, such as training, availability, skills and competencies, as well as performance.

• financial resources : the budgets needed to carry out the project. This includes bank loans, cash flow, alternative sources of financing, investments and expected returns, etc.

Who is responsible for resource management?

Different professional profiles can be entrusted with resource management.

Usually, the project manager is the main person in charge. But at the same level, or higher - depending on the company's hierarchy- the CFO or HR Director may be in charge. 

Depending on the size of the project, the resource manager may also be the department head, a manager or a senior executive.

Managing and optimizing resources involves five key steps:

1. 1. Defining objectives
   2. Budget planning 
   3. Capacity planning
   4. Allocation of available manpower
   5. Project follow-up

Step 1: Define project objectives

The first step in resource management is to clearly define objectives, be they temporal, financial or otherwise.

Not knowing how much time you have to complete a project makes it difficult to determine how many resources you'll need to bring it to fruition.

Let's take the example of a consulting agency that needs to carry out market research on worker motivation in Spain. The first step is to answer the following questions:

• When should I submit the report?
• In what format? Online only or in physical format as well?
• Is the aim to present the results to the public, or to sell them privately to companies likely to be interested in such an analysis?

These answers will determine the objectives to which resources should be allocated.

Step 2: Plan and budget the project according to objectives

Once you've set the objectives, turn the details of the project into a roadmap to prepare its execution.

Now is the time for strategic planning, establishing the project tasks to be carried out and organizing them on the project schedule.

On the basis of this information, you will create a provisional budget which will take into account :

• technical resources costs (materials, services, software) that will be required;
• human resources costs such as salaries and expenses, depends on their professional profile and the key skills required to successfully complete the project;
• financial costs (provisions, loans, etc.).

Let's take the example of market research again.

Consider that the consulting firm intends to unveil its study publicly at a press conference on May 25. It decides to provide the survey results in both physical and digital form. 

This is the project definition. The planning associated with this project could be as follows.

• April 1 to 15: employee survey.
• April 15 to 30: preparation of a report based on the results obtained.
• May 1 to 15: design of online and printed reports.
• May 1 to 20: organization of press conference and presentation.

Each planning stage must be associated with costs that must be taken into account when planning and controlling the budget.

You'll need to estimate, for example, how many hours it will take to reserve a space for the press conference (calls, visits...), as well as the hourly cost of the person who will carry out this task.

Step 3: Identify the necessary resources

All the needs and tasks associated with the project require appropriate resources.

This process of identifying the requirements for the project (the demand) and aligning them with the resources needed to meet the project's objectives (the supply) is known as capacity planning.

Resources offer

The match is made on the basis of skills, availability and motivation.

Additional complexity arises when an organization manages multiple projects in parallel. In this case, it's a matter of planning the process and allocating human resources intelligently. 

Resources demand

On the demand side, i.e. the needs side, there are several levels of criteria to be taken into account.

In the short term, as close to the field as possible, pipe sales - in other words, the projects or assignments with the best chances of being won - will determine profile requirements.

In the medium and long term, the market and the company's strategy will determine profile requirements. What will customers need in the future? What skills will be in demand? What positioning and needs will the company seek to satisfy?

Step 4: Allocate resources to projects

Allocating human resources in project management means knowing exactly which staff you have and coordinating the actions to be carried out by each of them.

This involves a detailed assessment of available resources, based on three key points.

Resource availability

Make sure that the resources to be staffed are available, to avoid scheduling friction. This is particularly important for companies with several projects underway.

Find out more about resource availability

You may have a design team who can be responsible for the layout of the report. But do they really have the time to take on a new project, or will you have to outsource this function to keep on schedule?

Capacity planning

Before assigning a resource to a task, check that he or she has the necessary skills to carry it out.

Using the consulting firm as an example, it was decided that the design would be produced in both physical and paper formats. Do the designers have the skills required for production in both formats?

The mission's appeal to employees

It's important to assess your teams' motivation regarding the missions they are working on.

How will the employees who will be involved in the project feel? It's a good idea to carry out a previous performance review, which can be used to set new milestones in the employee's career plan.

It's also important to know whether the employee is actually ready and motivated to take on this new challenge.

With all this information, and once you've gone through the previous steps, you can start drawing up the workload plan and calculating it. To allocate tasks, use a resource management tool or a GANTT chart.

To maintain a balanced workload , track resources using dashboards. 

Step 5: Project follow-up

All that remains is for you to monitor the project's resources and progress in order to corroborate that it is running smoothly, both economically and in terms of HR.from both an economic and HR point of view.

These two factors are essential if, in practice, the project is to achieve its objectives.

Financial monitoring

The first thing to do for project accounting is to establish the project's invoicing method. The main methodologies are as follows:

1. Invoice the customer on completion of the project.
   
2. Establish time milestones or other types of schedule to bill the project based on expected accomplishments.
3. Bill by time spent.

The chosen methodology will guide your approach to financial monitoring.

In the first case, proactively monitor expenditure against work performed to determine whether the project is on track.

If you detect any inconsistencies, take corrective action such as optimizing resources, reducing costs or other measures that help you meet your profitability targets. 

In the case of billing by stages or by the hour, the methodology is the same. The only difference is that it will be mandatory to carry out this follow-up in order to receive payments .

Delaying this means delaying cash flow. In any case, project control software makes the task of financial monitoring and decision-making much easier, with useful features such as :

• rapid and agile financial readjustments and task reorganization;
• time recording and management;
• access to real-time information on project costs, cost sources and profitability.

The final step in correctly tracking financial resources is to correctly calculate the profitability or margin left by the project.

Employee monitoring and management

Particularly in projects billed by the hour, it is essential to know the real professionals' actual performance.

In other words, how much of the work they do on a day-to-day basis is actually billable to the customer.

To find out, we need to calculate utilization rate. This isthe percentage of time an employee spends on billable projects versus non-billable projects.

Now let's imagine that the report in the previous example is not public. It's a commissioned piece of work for another consulting firm, which will pay us for exclusive access to the information we provide. In this case, it's a billable project. 

If a designer in the marketing department spends 5 hours per day this week on the layout and design of this report, their workload rate is 71.42%. Five billable hours, compared to two non-billable hours, as part of their working day, or seven hours per day in total.