Chapter 4: Resource Management

Introduction

Resource management is the pre-planning, scheduling and resource allocation method for maximizing the effectiveness. Resource management needs a thorough knowledge of your goals and ability, and it needs transparency. By setting up a healthy resource management process, you can maximize effectiveness and monitor the use of those resources easily.

Resource Management Concepts

In resource management, the first thing is to consider which resources are important enough to control and manage for our company. While this looks quite easy at first glance, it can be very time consuming when all necessary resources are taken into account. In general, a resource can be defined as all the required things to finish a project on time. Therefore, depending on the type of the project, it can be a person or a worker, a machine, financial resources (funds), material, or anything.

Definition of Resource and Resource Management

In literature, resources are often described in units such as two welders or three computers. However, it is also possible to specify them in terms of the time they require, such as 16 welderhours or 24 computer-hours. In literature, another classification of resources can be made depending on their consumability. Another classification can be made depending on the importance of the resources. There are mainly three categories in this classification: key resources, secondary resources, and general resources. As it can be easily understood, key resources are the most important resources for our project. They are mostly expensive and scarce. The skilled workers or equipment can be named as the key resources for a project. Hence, we must pay more attention to these types of resources in the resource management process. However, we must keep in mind that a key resource for a project can be a secondary or a general resource for another project. Another category is the secondary resources which need less attention than key resources. One example of secondary resource is workers with regular skills. The last category is general resources which are mostly available all the time during the project, inexpensive, and easy to obtain. This type of resources is not the subject of the resource management process.

The resource management is ‘the acquisition and deployment of internal and external resources required to deliver the project, programme or portfolio’. In another study, it is defined as “the management capacity and resources of service that are organized effectively and operated efficiently at optimal level”. project activities, durations and the predecessors of each activity are the main inputs of the project scheduling. In project scheduling, start and finish time of each activity are determined by two different approaches: the forward-pass and the backward-pass. Both approaches utilize the durations of the activities, which means they assume that all the resources (for CPM, the durations of the activities) are available in hand before we start the project.

For a successful resource management process, firstly we start with determining the necessary sources for our project. In the second step, we classify them with respect to the given classes above such as consumable, secondary resources, etc. In the third step, according to the project scheduling, we must estimate the required quantity of each source determined in the previous step for all the activities. Finally, resource aggregation, leveling, and smoothing techniques can be applied, if necessary.

Benefits of the Successful Resource Management Applications

The resource management aims to maximize the value resulting from the company’s limited resources throughout the entire project for all departments and teams. The benefits of successful resource management for a company are summarized as:

• Avoids unexpected delays: By developing resource management plans, necessary resources can be predicted, and the unexpected delays may be avoided.
• Prevents overloads and fatigue: Effective resource management allows us to prevent overloads of resources (fatigue for humans) and bottlenecks or roadblocks by using resource allocation, aggregation and leveling techniques.
• Builds transparency: Resource management provides transparent information about the status and workloads of resources and builds transparency for all the shareholders of the project.
• Measures efficiency: It allows us to measure the efficiency of resources and enable us to work on multi-project environment. It also helps us to calculate return on investment (ROI) ratio easily.
• Provides a safety net and projection: Resource management lets us know that we did the best with the available resources in hand and it offers the future projection for the upcoming projects.

Suggestions for Resource Management for the Project Success

It is essential to have a good resource management system to complete a project on time and on the limited budget. Suggestions for a good resource management system can be summarized as follows:

• In order to get optimal performance from the resources, schedule the most valuable resources (i.e. key resources) which are the most critical and problematic resources first.
• It is very important to have an intelligent resource management software that let you to analyze the “what-if” scenarios such as reallocating some resources to other activities.
• Gaining visibility on resources and tracking the project allow project managers to monitor the process, to inform the stakeholders, and to control the resources.
• Reporting is an important part of the resource management process.
• Remember, humans are also resources, and as it is always said, human resource is the most important resource of the companies.
• Finally, be prepared for the worst case. Predicting the possible problem areas about resources and having alternative scenarios to fix the potential disasters are very important.

Resource Management Steps And Techniques

There are three major constraints of a project: duration limitations, performance requirements, and the resource constraints. Insufficient resource results in a longer project schedule and an ineffective resource management can easily affect the quality and the performance requirement of the project. Therefore, better strategies must be developed to manage the resources in a company.

Estimating Resources

The first step of resource management is the estimating of resources. In this step, the project managers estimate the type and amount of human resources, materials, machines, or any resources needed to accomplish each activity. There are five techniques and tools to estimate the resources for each activity in the project schedule:

• Expert judgment
• Published estimating data
• Project management software
• Bottom-up estimating
• Alternative analysis

Resource Allocating

In this step, resources are assigned to the specific activities in the project schedule. At that step, we also determine the required number resources. However, multiple sources may be assigned to a specific activity, in addition to that, even the requirement for a specific resource may be different for each activity. For instance, some activities in the initial steps may need fewer workers, while the demand for workers may increase in the later stages. Moreover, a multi project environment can increase the complexity of resource allocation process since projects compete for scarce resources. Therefore, in this step of resource management, we try to optimize the utilization of these resources while we assign them to various project activities. Even though it has several advantages, the resource allocation has several challenges which are summarized as:

• Client changes
• Availability of resources
• Activity predecessors
• Changes in priorities

Resource Aggregation

The third step of resource management is the resource aggregation. In this step, we sum the resources that are required to complete all the activities with respect to the resource allocation step outputs. Histograms are very practical to show the results of that aggregation process. For each resource estimated and scheduled in the previous stages, a separate histogram is required. In the resource aggregation step, using the same time unit with the allocation step also facilitates the summation process. This step is very vital when the same resources are shared among different projects in a multi-project environment. In these kinds of projects, the aggregated amount of a resource cannot be simply determined without using resource aggregation procedure.

Resource Leveling

In resource leveling, the aim is to solve the resource conflicts by shifting (mostly delaying) the dates of the tasks. By doing so, we try to get a smoother distribution of resource allocation. To identify the resource conflicts, we examine the network diagram in terms of slacks and floats, and determine the tasks that can be delayed to overcome the overallocations. At that point, it is preferable to check the noncritical tasks first, which does not change the overall schedule. Otherwise, resolving overallocation can result in delays in project completion date. Even though overallocation is a serious problem for a company, underallocation is also a case which must be examined carefully to improve the usage of specific resources. Therefore, in resource leveling, we are interested in both situations, and we aim to minimize the variations in resource usages along the project life cycle.

On a project where we have three activities, it may be straightforward to determine a possible solution for leveling the resources, however, it is not that much easy to find even a feasible solution for projects where we have thousands of activities. Consequently, we need more common ways (heuristics, simplified rule of thumbs) of solving resource leveling problems in real life. Some basic heuristics are provided below:

• with the smallest slack time.
• with smallest duration.
• with lowest activity identification number (i.e. earlier activities first).
• with most successor activities.
• which require moreresources has significant effect on resource leveling along the project life cycle.

After calculating the total resource hours needed for each activity, following steps can be applied to level the resources: with the smallest slack time.

• Step 1: Creating resource loading table
• Step 2: Determining activity late finish dates
• Step 3: Identifying resource overallocation
• Step 4: Leveling the resource loading table

Finally, we have to check the new table for all periods to find out if the latest reconfiguration disrupts the balance at any point on the project life cycle. Since each modification can cause a ripple effect, we have to check the entire table at each iteration. Note that, activities on the critical path may also change with this modification.

Resource Forecasting

Resource forecasting is the process of estimating the resource requirements of a company in a large timescale. Even though it is recommended to be done before a project starts, it can also be beneficial to do it after a project finishes to investigate the future projection of resources for upcoming projects besides predicting the resource constraints, unexpected costs, and possible risk areas. Different from the resource estimation process, in resource forecasting, instead of identifying the types, amount and characteristics of the resources needed to accomplish the activities in detail, we only draw the big picture about the resource requirements of the company in a large time base. In order to predict the resource requirements correctly, project lifecycle, expectations and the availability of resources within the company should be known and be accessible by the project manager. At that point, a project management software, which will be explained in detail in the following part, can help the project manager a lot. Top-five tips for resource forecasting in project management are as follows:

• Skills needed for the project must be thoroughly understood.
• Strengths and weaknesses of the project team members must be clarified.
• Investigate the recent projects to determine the usage (over or underutilized) of the resources and use these data to predict the future resource requirements.
• Assign the right resources to right activity in the project plan.
• Statistics about the resources such as employee turnover rate, recruitment trends, and return on investment must be kept under control.

Project Human Resources Management

Success or failure of projects is highly related with the performance of the workers. The human resources management aims to set up an environment in a company that enables project managers to use workers more efficiently. Project human resources management gives the project manager the ability of leading and managing the project teams. In project human resources management, the main purpose is to guarantee that there are enough human resources, with the right skills, knowledge, and experience to complete the project successfully. The human resources management consists of four main parts: organization chart for the project, responsibility assignment matrix, histogram for resources, and staffing management plan.

The first step of developing a project human resources management plan is to identify the skills and types of necessary people for the project. After determining the skills and types of the people, the project manager can create an organization chart with the help of other top stakeholders of the project. A project organization chart graphically shows the distribution of authority and responsibility within the project. However, level, size, and complexity of the project organization charts differ depending on the project. There are mainly four types of organization charts: functional organization, projectized organization, matrix organization, and composite organization.

A responsibility assignment matrix is a matrix that assigns the activities of the project to the team members who are responsible for performing the corresponding activity. Depending on the preferences of the project managers and the complexity of the project, responsibility assignment matrix can assign the activities to individuals, teams, or organizations. Even though there are different models to describe the responsibilities, RACI model is the most widely used model in the literature, which is derived from the key responsibilities: Responsible, Accountable, Consulted, and Informed. In RACI model;

• Responsible (R) refers to the person who does the activity,
• Accountable (A) is the person who is ultimately answerable for the activity.
• Consulted (C) is the adviser for the given activity or the entire project.
• Informed (I) is the person who needs to be notified about the activity or the project.

The third component of the human resources management is the resource histogram. It is a bar chart that illustrates the number of required resources for a project throughout the project life cycle. Depending on the preference of the project manager, bars can also show the amount of time that a specific resource is scheduled. Since they are straightforward charts to examine, they can provide fast and easy view of resource allocations at any time on the schedule. They also provide information about how long a resource will be involved in the project.

The last component of the human resources management is the staffing management plan. It is a document that explains when and how people will be part of and dismissed from a project. It also provides the necessary information about training, reward mechanism, and reassigning process for the resources. A good staffing management plan consists of introduction, staffing requirements, staff assignments, and training, rewards and reassignment parts; and it may include the following information:

• Description of human resources,
• How the human resources will be obtained,
• Criteria to use for human resources recruitment,
• Internal and external sources for human resources,
• When the resources will be part of the project,
• When the resources will be dismissed from the project,
• Necessary trainings and training programs for the project teams and individuals,
• Strategic employee rewards and recognition systems,
• Methods to track the performance of the team members and different ways of motivating them.

Resource Management Software

Resource management software is the best assistant of the project manager. In literature, it is sometimes referred as resource capacity planning software. Resource management software makes it easy to plan, schedule and reschedule (if necessary) the resource needed especially for big projects. It can assign your resources to the tasks and define the cost for man, material, and machine resources.

Benefits of Resource Management Software for the Company

Resource management software makes it easy to plan, schedule and reschedule (if necessary) the resource needed especially for big projects. It can provide a clear view of resource usage and prevent resource allocation conflicts. It also allows us to follow who is working on which project, when the activity started, and how long it will take. Incorporating an effective resource management software into the company can realize the following functions and enable the company to:

• determine the actual demand and capacity,
• prioritize project requests for both project manager and clients,
• obtain actual resource availability,
• assign the necessary resources on the correct work and at the right time,
• find out which skills and roles are needed and provide labor hiring plans,
• establish more effective communication between team members, project manager, and other stakeholders,
• predict possible problem areas and provide valuable information for risk management plans,
• implement different objective methods for prioritizing the activities and analyze the output of what-if scenarios,
• prepare customizable, summarized and automated reports to give each stakeholder the insight they require.

Criteria for Selecting Resource Forecasting Software

Although everyone agrees upon the necessity of software, there is great uncertainty about which software to use for resource management. In order to evaluate the resource management software, the following criteria can be used:

• User Interface (UI): Does the design of the software maximize the usability and the user experience? Is the user’s interaction simpler and efficient enough to accomplish the user’s goals?
• Usability: Is it easy to use and learn? Are there comprehensive tutorials and training about the software? Do they provide necessary technical support?
• Features & Functionality: Do the functions and features of the software meet the demand of the company? How powerful are they?
• Integrations: Does it work in an integrated and compatible way with other software recently used in the company? Does the data transmission options fit with the available management systems in the company?
• Price-performance ratio: Are there any buying options for different requirements? When compared with the similar software, how appropriate is the price? Does the price cover possible system upgrades? Is there a time-based usage fee, such as an annual usage fee or annual licensing fee?