What is Resource Allocation?
The process of wisely assigning your resources in a way that you can optimally utilize them for your projects is called resource allocation. By resource, we mean a production factor that is utilized to produce any goods or services. Resources could be labor, equipment or machinery, technology, real estate, finances, etc. Resource allocation is an activity that is performed by a project or resource manager, and it is related to strategic management. While doing resource allocation, it is important to meet the organizational objectives. The strategy used here determines what type and how many resources are needed. But the availability of these resources can also be a constraint to this strategy. Hence, the first step is finding the right people with the needed skills for a project. Then, you need to check if they are available as per your schedule.
Why is Resource Allocation Important?
If you do not allocate your resources properly, they will not work where they can do their best. However, when you do efficient resource allocation, you can utilize your team members in the best possible way. This further means that your projects will progress smoothly, and the deliveries will happen on time and within budget. But you need a sound allocation strategy to manage your resource allocation efficiently. Without that, you could face challenges such as:
- Lower resource productivity
- Lower utilization
- Lower project cost-effectiveness
- Lack of balance like overutilized or underutilized resources
Tips to Ensure Effective Resource Allocation
- Create a detailed project plan using a resource allocation software
If you don’t divide your projects into smaller tasks and sub-tasks, you cannot allocate them to your team. This process is termed as work breakdown structure (WBS), and this is the first step in making a project plan. You need to determine which tasks can be executed in parallel and which are dependent on each other. After you have made the critical path within each project, you’ll know the minimum time needed to complete it. Resource allocation is an indispensable part of this process as people are allocated to all the tasks or projects for their completion. Using the right resource allocation software makes this process a lot easier.
- Chart out your schedule or project timelines
Based on the project methodology you are using, you need to identify your project’s phases or key milestones. Then, calculate how much time each phase is expected to last, thus setting clear phases or milestones. The next step is to ascertain the key tasks for each phase and then map these phases, tasks, and milestones on a schedule or a project timeline. Though this may sound overwhelming, creating a schedule or project timeline using a resource allocation software like eResource Scheduler is very easy. In a few clicks, you can complete creating all tasks and timelines attached to it.
- Create a detailed central skills repository
Isn’t it difficult to find the right person with the right skill set when a new project comes? Imagine if you had a central place like a skills repository where you can see a list of all resources and details of their competencies, experience, core expertise area, etc. A skills repository is a list of the different skill sets required for any and all projects. A team resource management software and tool offers a centralized skills repository that helps you to identify and choose the right team members to assign to your project. But this becomes a herculean task in large organizations with distributed teams. Using resource allocation software can make this easy. It not only provides you a central online list of all resources but also their availability, skills, expertise, etc. So, you can pick the right person in just a few clicks.
- Identify resource requirements for all the tasks or projects
After dividing the project into tasks, you need to assign resources to each task or project. To complete a task, you may need both human and other types of resources like material, equipment, software and hardware, finances, etc. For human resources, you first need to identify the competencies, expertise, and interest area of that person. For other resources like machinery, you should determine what all is needed to execute the project. You will also need to determine the specifications of the equipment, material, facility, etc. you would need before assigning that to a task. Resource allocation software comes in handy in identifying resource requirements for your projects.
- Be aware of your resource challenges or dependencies
Planning for your resource allocation beforehand can help you avoid probable bottlenecks that could end up in project delays. Proper planning in resource allocation also enables you to avoid any resource shortage. Though this doesn’t mean that any bottleneck won’t appear, the chances are very less if you are aware of your resource dependencies. To plan for dependencies, you need to have a contingency plan in case have fewer resources than required. Plan in such a way that you are not over-dependent on some specific resource or team so that you can avoid any challenges in the near future.
- Find and allocate the best fit resources
A resource allocation software consolidates all-important resource data from different systems into a centralized online platform. This provides complete visibility to everyone, which helps the project managers to assign suitable resources to various projects. You can decide on the resources depending on their skills, experience, qualifications, costs, availability, or any other selection criteria. One of the best methods of resource allocation is to assign the best-visible-best-fit resources. As managers have visibility, they can do a balanced distribution of highly skilled resources across different areas rather than assigning them only to a high-priority project.
- Track time and progress
It isn’t easy to measure the success of any project without monitoring the progress that the team members are making. After allocating resources, the project manager needs to track the workload and manage any challenges on the way. If the resource allocation software you choose has the time-tracking feature, that can help track your team’s progress. You can also monitor how much time they are taking to do a task vis-à-vis the planned effort. Also, team management software gathers real-time data, which helps in planning for future resource requirements. Once a project is over, resource allocation software can help to identify the things that went right or didn’t go as planned. This enables you to prepare better for future projects.
- Avoid over-allocating
At times because of poor planning, lack of resources, or some scope creep, you end up over-allocating. This also leads to the team members being discouraged and burnout, reduces the team’s morale, and the quality of the work also suffers. Therefore, it is important to check and re-check your resource allocation plan. Ensure that you have allocated only that much work to each resource that they can manage properly. Also, while doing resource allocation, be careful that you utilize everyone in a balanced way, and some people are not under-utilized.
- Use real-time business intelligence to assess your resource allocation
Though you may have planned well, the stakeholders might change some project requirements or scope that needs immediate attention. A cloud-based AI-powered resource allocation software is armed with real-time business intelligence reports and dashboards. This feature helps to improve the organization’s overall profitability and health index. Customizable dashboards and visual reports help in making well-informed decisions and amend the resource allocation plan accordingly.
- Implement a resource allocation software
A team allocation tool like eResource Scheduler is a game-changer in managing your resource allocation more effectively. With such a cloud-based tool, you get all updated project data. You can monitor on which project each resource is allocated. The color-coding helps to identify is your resources are on- or off-task, on leave, or not available. Re-allocating or rescheduling can be done to help a resource that may be overburdened in just a couple of clicks. You can also find the utilization of your team and each member on a daily, weekly, or monthly basis.
Your Best Bet for Efficient Resource Allocation – eResource Scheduler
Try eResource Scheduler to manage your resource, project planning, scheduling, calculating utilization, and productivity management. Its features like the drag and drop functionality, time-tracking, an intuitive interface, detailed reports, etc., help you seamlessly manage multiple resources in different locations. eResource Scheduler’s advanced filters can be used to find which resource has the skill set you are looking for and is also available in the required time period. Book a free trial of this tool and check out all its features and advantages.