Resource Management in Project Management: Basics and Areas for Beginners

The issue of resource management in project management (aka resource planning) is increasingly gaining importance – and becoming ever more complex. Why is this so? For one thing, it is because the demand for suitable staff is greater than the supply currently available. Additionally, the list of required qualifications for these people is evolving ever more rapidly. This makes the topics of resource management, project resources and resource allocation so important. In this article for beginners, you will read about basics, benefits, challenges and articles with further tips on resource management in project management.

In the following sections, you will learn about:

• Definition: What is resource management?
• Why is resource management in project management important?
• What are the tasks of resource management?
• What are the benefits of resource management?
• Responsibilities of a resource manager / resource planner
• Areas of resource management in project management
• Challenges of resource management in project management
• Results for resource planning from the PMO Survey 2020
• Further relevant articles with tips

Let us now take a look at the basics of resource management in project management.

Note: We are using the terms resource management and resource planning interchangeably.

Definition: What Is Resource Management?

Resource management, aka resource planning, is a key element of project management. It ensures that projects and portfolios have access to the necessary resources (staff, facilities, etc.) at all times and are used as effectively as possible. It is very closely related to the development of schedules and cost plans.

Why Is Resource Management in Project Management Important?

The goal of every company is to reach its objectives with as little effort as possible. “Resource management in project management”, or simply “resource planning”, helps companies achieve this goal.

Knowing what resources are required for current and future projects helps you plan more effectively. In this way, you will use the available resources more economically. They will not be overloaded, and you can procure resources needed for the future in good time (keyword: skills management).

What Are the Tasks of Resource Management?

If you are seeking a resource planning implementation, you probably have some or all of the below resource management tasks in mind:

• Planning and resource allocation: Strategic planning and allocation of capital, staff, time and other resources with the aim of deploying resources where you most urgently need them
• Optimizing resource utilization: Maximizing efficiency and productivity of the existing resources as well as minimizing bottlenecks and idle time
• Risk management: Monitoring and analyzing resource allocation to identify potential risks, evaluate and minimize them
• Revising resource allocation: Revising resource allocations for projects in accordance with changing circumstances in the project environment as a reaction to new requirements and opportunities
• Strategic capacity planning: Assessing the current and future resource capacity to ensure there are sufficient resources to meet the needs of the project portfolio
• Supporting corporate objectives: Supporting the long-term objectives and success of the company by ensuring that the right resources are available in the right place at the right time

What Are the Benefits of Resource Management?

Here are some of the key benefits of resource management in project management:

• More reliable planning: You can avoid bottlenecks more easily if you identify your resource needs early on. You can also calculate and plan the availability of people with the necessary skills. Doing so provides greater reliability at all levels.
• Less overload: Individuals and teams that are in high demand often suffer from an excessive workload, and having a clear overview of your resource utilization helps avoid this problem. Thus, you create greater job satisfaction and employee retention.
• Well-documented: If your project fails due to missing resources, having good documentation can help you prove that your resource planning made the best possible use of the available resources. It provides a valuable lesson for future projects.

Responsibilities of a Resource Manager / Resource Planner

Resource managers or resource planners are key players in the project environment. They are in charge of identifying, coordinating and optimizing the various resources of a project. Typically, this includes staff, financial resources, materials and time.

Resource planners develop strategies and implement systems to use resources efficiently and thus achieve project goals. This requires extensive knowledge of the project goals as well as internal processes and external market conditions.

In a matrix organization, it is usually the team leader who is responsible for resource management in their own team. Good tactical resource planning at team level fully covering all activities in the team makes it possible to predict resource bottlenecks, avoid overload and minimize risks. This also improves the validity of commitments in response to requests from the projects.

In addition, modern and powerful resource management software can make this task considerably easier. It helps resource managers plan, monitor and control resources.

Areas of Resource Management in Project Management

Gartner divides project resource planning into five distinct areas as shown in the following graphic.

TPG The Project Group, on the other hand, identifies only three levels in project resource management:

• Strategic capacity planning in the project portfolio
• Tactical resource planning between team and project
• Operational work planning at task level

The following graphic shows these tasks and their interdependencies with regard to roles:

Challenges of Resource Management in Project Management

In this chapter, we focus on the challenges of resource management in its three areas.

Challenges of Strategic Resource Planning / Capacity Planning

The goal of strategic resource planning in project management or capacity planning is to ensure optimum resource utilization based on the company’s goals and the product portfolio. It should also identify:

• What resources, and how many of these resources, are needed for upcoming projects and general operations?
• What skills must be procured or trained?
• Which prioritization in the project portfolio must be made in the event of lack of resources?

With insufficient strategic resource planning, you run the following risks:

• Due to inadequate resource allocation, projects may not be finished on time
• Project costs will rise, as there are too few appropriate resources
• Some business opportunities you cannot exploit, as you are unable to obtain the required skills in good time
• Your coordination efforts for resolving resource conflicts are strikingly increased

It depends on the project types at your company how flexible you can be in your resource planning. Prioritizing these projects as part of project portfolio management is a key objective.

Three Project Types and the Differences between Them

A distinction is made between three project types:

• In-house developments
• Commissioned projects
• Organizational projects

How do these three project types differ in priority and what effect does this have on the required resources?

• Prioritization of in-house developments
  With a portfolio of in-house development projects, you have a good starting point. The decision-makers themselves can decide when to launch a particular project. They can generally shape their own resource peaks. So, it is their responsibility to make rational, comprehensible decisions when prioritizing the projects.
• Prioritization of commissioned projects
  Clients can request, cancel, or approve a commissioned project at any time without prior warning. You have to deal with vague forecasts. Each client thinks they are king. If you are responsible for a sales pipeline like that, you will need to learn how to deal with uncertainty. You will need to keep an eye on the order levels when scheduling your resources.
• Prioritization of company projects
  Internal company projects should be treated the same as any client project. One advantage here is that fewer people are involved in prioritization. On the other hand, these internal projects tend to be the first ones to be postponed when resources are scarce.

Our tip: Determine early which of these three project types you are dealing with. Doing so will help you understand which of the typical challenges of resource management you will face in managing your project. Develop appropriate processes in response. A project management office is exactly the right body for this task.

Challenges of Tactical Resource Planning

Team leaders generally have the final word when it comes to allocation of the necessary project resources. Project managers expect team leaders to approve their resource requests as quickly as possible. This enables you to schedule these people for your projects.

However, you also need reassurance that these approved resources will actually be available when you need them. This helps minimize any changes to the plans later.

Suggested related article: Best Practices for the Resource Planning Process

However, this can cause problems for the team leaders.

• The same team leader can be repeatedly confronted with requests from various project managers at different times.
• This makes it difficult for team leaders to have a sound basis on which to base their decisions.
• A new request today can negate an agreement made yesterday.
• Team members often have tasks (such as operational tasks) in addition to their project work – which, in turn, affects productivity in the project.

Team leaders often deal with several project managers simultaneously. Project-related requests submitted to the team leaders must always be well-organized. You should set up a resource planning process for this. Agreed upon, reliable processes and a fixed cadence for resource approval are essential for everyone involved.

Our tip: Get everyone involved to agree on a fixed schedule for resource planning. However, this schedule should be modified only in cases of emergency. This provides reliability and a better overview of the capacity utilization for the next 1-2 cycles. This is another case in which a PMO as a central body can ensure resource planning processes are implemented.

Challenges of Operational Resource Planning / Work Management

Project managers usually need the respective team leaders to approve their requests for qualified employees. We discussed this in the previous chapter. The next issue is work management – who does what, and when?

In matrix organizations, the project managers have access to the allocated resources for the specified time period. The next step is for them to plan the required tasks or – more sensibly and even better – have the team members plan these tasks themselves.

In this case, the challenge is to regularly document the status. This enables project managers to clearly see what progress has been made and what still needs to be done. You need the right tools to do this. Ideally, you would connect the tools in such a way as to make it possible to exchange current data in both directions.

Our tip: Create an IT environment in which the project manager’s scheduling tools and the team leader’s work management tools are integrated. This gives you the ability to compare the plan and actual values at the push of a button before any upcoming status meeting. For instance, powerful integration middleware will provide the option to exchange data between different systems.

Results for Resource Planning from the PMO Survey 2020

The extensive PMO Survey 2020 investigated the most important areas of responsibility in 330 companies with PMO. In the participating companies, resource management is the least established area of responsibility compared to the other PMO functions.

According to the results of the survey, PMOs with fewer than 3 members are in a decidedly worse position for resource management than PMOs with more members. The number of responses stating “Improvements are planned” is only slightly higher for PMOs with more members. However, the share of responses stating resource planning was “Well-established” are at least three to four times as high.

Resource Management in Projects

13% have operational resource planning (task planning in the projects) in place and respond that this is well-established without need for changes. 28% have it in place but are planning further improvements. 14% are planning to start in the following 12 months, and almost half the respondents are not going to establish operational project resource planning at all.

The support of resource planning in projects clearly has a huge impact on project success which the top performing PMOs deliver best.

Further Relevant Articles with Tips

Here are some brief descriptions of further articles about resource management in project management on the TPG Blog.

Article 1:
Resource Planning Implementation – How to Be Quick and Successful with 6 Steps
Achieve improved resource planning in order to quickly optimize scheduling, identify conflicts in good time and resolve them quickly.

Article 2:
Solutions for the Resource Planning Process in Line and Matrix Organizations
Establish the right processes for the smoothest possible coordination of resources between project and team management.

Article 3:
Agile Resource Planning – Can Agile Planning Reduce Resource Conflicts in Projects?
You can indeed avoid resource conflicts with agile methods. The prerequisite is that you can handle the necessary constraints.

Article 4:
Capacity Planning in Project Management – 4 Important Success Factors
Get to know four key steps to introducing successful strategic capacity planning in the project portfolio.

Article 5:
Skills Management – Definition, Benefits and Prerequisites
Competency management and skills management are an advanced form of resource planning. Learn about the primary advantages from a strategic and tactical-operational viewpoint.

Article 6:
Requirements for Resource Planning Tools for the Roles in the Project Environment
The tasks assigned to stakeholders in the context of resource planning are very different. Project management tools alone will not be sufficient for their requirements. What are the right tools for the roles and what must they be able to do?

Article 7:
Resource Engagements in MS Project – What They Are, How to Use Them and a Better Alternative
Learn step by step how to use the Resource Engagements feature in MS Project 2016 and higher, what it can do and where its limitations lie.

Our final tips

Get to know the individually adaptable “PPM Paradise” – the optimal environment for your enterprise-wide project, program, portfolio and resource management. Download the eBook now (just click, no form).

And sign up for our bi-weekly blog newsletter to make sure you receive all our updates.

What has been your experience with resource management in project management? Is there a critical aspect that you feel we have missed? We look forward to receiving your comment!

print this article