Project Resource Management – How to Master Priorities and Processes (Update 2020)

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+++ How to Optimize Your Strategic and Tactical Project Resource Management +++ Important Tips You Need to Know +++

By Johann Strasser                                                                                                          Read article in German

Resource Management is a huge challenge for project management. Projects must have sufficient staff available – even when things do not go quite according to plan. The staff’s team leaders or superiors complain about ever-changing requirements.

And the PMO is supposed to set things right.

The PMO will never fully resolve this resource conflict. All the same, it can defuse it by following a strategic and goal-oriented line of action.

What is resource planning in project management?

Definition: Resource planning is a key element of project management. It ensures that a project has access to the necessary resources (staff, facilities, etc.) at all times. This planning is very closely related to the development of schedules and cost plans.

Why is resource planning essential?

    • Resource planning and resource management help a company achieve this by focusing on optimization and efficiency.
    • The goal of every company is to reach its goals with as little effort as possible.
    • Knowing what you need for the project to be successful lets you plan effectively and make economic use of the available resources. Larger companies often have a resource manager for specifically this purpose. This person relieves project managers of tasks such as organizing the necessary resources for already planned projects for the team leaders involved.

 

When planning and implementing a project, you need resources. These resources encompass the people and materials required to carry it through. The act of assigning resources to your project is called resource planning or project resource management.

  • The resources you need tend to be needed for other competing projects as well – hopefully not at the same time. You draw on the same resource pool as other project managers.
  • The project may not go according to plan, and you may need to make adjustments. You may end up needing additional resources, or you need the resource for longer than originally planned.For this reason, resource planning is rarely a one-off activity but rather an ongoing process in project management.

Note: There is no such thing as a blueprint for dealing with this competition for resources, and human behavior can also be a factor. However, there are two magic terms for:

  • further resource planning in line with company goals
  • minimizing conflict

These are ‘prioritization’ and ‘coordination processes’.

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What projects are you trying to prioritize?

To design these two areas well, consider first of all what type of project you are dealing with.

Resource Management, projects trying to prioritize

How the project type influences the priorization – individual prioritization in different areas   

Development projects
Are you are responsible for a portfolio of development projects? If so, you are creating your own resource peaks and are in a comparatively good position. Your job is to handle the prioritization in a rational and comprehensible manner.

Contract projects
Contract projects are a different thing altogether. Requests, cancellations, and confirmations arrive unchecked. You are confronted with vague forecasts, and every client thinks their project should be your top priority. Are you responsible for a sales pipeline of this type? If so, you’ll have to deal with probabilities and continually adjust your plans to the order situation.

Corporate projects
Internal corporate projects must be treated like any other contract project. On the plus side, fewer parties are involved in the prioritization. On the minus side, the internal projects tend to be the first ones postponed when there are resource shortages.

Tip: Be clear about which of the aforementioned project types you are dealing with, and the resource management challenges typically associated with it.

Process Cycles and Controlling for Project Resource Management

You will not achieve planning reliability for anyone if the team leaders are:

  • confronted with new resource requirements from the projects on a daily basis
  • expected to react to these quickly

Team leaders cannot report on the availability of their team.

And project managers never know if:

  • promises will be kept
  • a project with a higher priority will take precedence overnight
Process Cycles and Controlling for Project Resource Management

Exemplary process cycle across the decision-making levels

How can we guarantee systematic, overriding project resource planning that aligns with company goals?

The following processes are imperative:

  • Status updates (preferably weekly) from team members (showing the time and results) for the respective project managers, informing them of who worked on what
  • Team status meetings (weekly) focusing on the members’ status updates, problems and escalations
  • If necessary, resource coordination (bi-weekly) between the project manager and team leader

Handpicked related content:
> Requirements of the Processes for Resource Planning. Read now.

Team leaders often have to reach agreements with several project managers. Any project requests submitted to them should therefore be clearly structured. Reliable, agreed-upon processes are indispensable for all involved.

  • Budget and strategy meeting: quarterly reviews of financial planning and possible reprioritization at the enterprise level
  • Portfolio review meeting: monthly meeting to discuss priorities in order to resolve any resource conflicts

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When decisions are needed, a regulated process of resource planning and coordination must be adhered to. Everyone involved should understand how to do resource planning and be familiar with the process and the rules.

Prerequisites for Strategic Resource Planning in Project Management

To avoid difficulties and ensure availability of the required resources for a project, you need to fufill the following prerequisites:

  • The first prerequisite for ensuring realistic results is to perform the calculations using the actual availability. Deduct the appropriate amount of time for daily operations, public holidays, vacation time, further training, etc.
  • The second prerequisite concerns portfolio planning: the capacity requirements for running and new projects must be complete.
  • The third prerequisite is consolidating the capacity requirements at the level of the skills or teams needed.

Handpicked related content:
> 4 Steps to Success in Strategic Resource Planning. Read now.

When planning the portfolio, approving the capacities for top priority projects has to take precedence.

Capacity bottlenecks can be mitigated or eliminated by postponing lower priority projects and/or by securing additional capacities.

Banner-Resource-Planning-eBook-E

In a dynamic environment, this will not be a one-off process. The following situation will occur time and again: resources are insufficient and need to be redistributed.

Companies with 10 or 20 projects can still handle this redistribution manually. From 30 projects upwards, this becomes increasingly difficult. With several hundred projects, strategic resource planning without the aid of a proper tool becomes impossible.

Project Resource Management in Practice

Project management resource planning always starts the same way, with individual project managers and team leaders attempting to plan as realistically as possible. During the planning, they already have one option to help them reduce, or even avoid, the risk of bottlenecks. They can position their projects strategically along the timeline. Not everything needs to start at once!

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MS Project Tip:  Using Resource Engagements in MS Project! Read now.  

Operational Resource Planning in Line and Matrix Organizations

The organizational structure affects the resource planning for projects. It makes a difference whether you are in a line organization or a matrix organization.

Planning in Line Organizations

Resource Management, line organizations characteristics

Characteristics of project resource planning in line organizations

In line organizations, the departments or teams deliver results to the project manager. Essentially all that usually happens in the project is the rough planning needed to answer questions such as: What is needed and when?

Detailed planning takes place in the line. This answers questions such as: Who is working when? With what effort? And what result is expected?

The resource owner is also the resource planner, and the person in this role sets the target dates and specifies the efforts. The data are entered into the project-planning tool.

Coordination process line organization (exemplary solution with Microsoft Project), resource management

Coordination process in the line organization at work package level (exemplary solution with Microsoft Project)

Handpicked related content:
> Impact of the Form of Organization on Resource Planning in this article

From the project manager’s perspective, this alternative is easier. However, it is not exactly agile. Interference or new requirements can cause a project’s priorities to change. If this happens, the line organization has little leeway for reallocating the resources.

Planning in Matrix Organizations

Resource Management, line organizations characteristics

Characteristics of project resource planning in matrix organizations

In Matrix Organizations project managers reserve resources from the teams.

In the teams, there is only rough planning. Who is working on what project? And when?

The detailed planning happens in the project. Who is doing what exactly? And when? The challenge for the team leader: They often receive many requests and have to decide.

Especially when something changes in the project, it is necessary to weigh the needs.

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Case Study: International Resource Management for Product Development 
Case Study: Project and Resource Management at an Electricity Supplier

Resource Planning in Matrix Organizations: The Dilemma and its Solution

Initial situation

  • In matrix organizations, project managers have access to a pool of resources. They assign members from different teams to their projects.
  • Team leaders assign operations, but also further training, vacation, etc., to their team members.
  • Taken together, these plans comprise the overall resource utilization.

Problem

  • Project managers are not aware of the resources’ actual availability.
  • Team leaders have not been completely informed of their team members’ resource utilization. They cannot see whether or not these team members have been assigned to projects.
  • If a project’s plans change, this results in direct conflicts. These conflicts affect not only the team leader’s plans but also that of other projects.

Proposed Solution

  • Project managers register their resource requirements with the teams at the project level.
  • The team leaders align the requirements or rather bring about decisions. They commit resources to the projects for agreed periods of time (i.e. per month).
  • Differences resulting from changed requirements are analyzed and coordinated in regular iterations.
Coordination process in the line organization at work package level (Microsoft Project) for Resource Management

Coordination process in the line organization at work package level (exemplary solution with Microsoft Project)

With this solution, a large amount of data on resource utilization in project management must be documented, shared, and updated. This can only be managed efficiently with truly suitable tools.

Many companies actually use efficient solutions for project and resource management. But the team leaders responsible for the resources often work with self-created Excel tables. There is no data exchange between these two worlds, although such an exchange could remedy the communication problem. This is the challenge that needs to be overcome.

Conclusion – Project Resource Management Optimization

This article has shown that defining priorities and processes is vital. You have learned how the project type influences the prioritization. You have found out about sensible process cycles for planning and controlling a project. The three prerequisites for strategic resource planning are:

  • Calculate using actual availability
  • In portfolio planning, work with complete capacity requirements for current and new projects
  • Consolidate the capacity requirements at the level of required skills or teams

You now understand the differences between line and matrix organizations, at least as it pertains to operational resource planning for projects. We have presented you with a proposed solution for project resource planning in matrix organizations.

This leaves you with an ultimate challenge:  automating the exchange of data between the team leaders’ plans and the project managers’ plans.

Is there anything you would like to add on this topic? What are your greatest concerns? We’ll gladly respond to the comments you leave below.

Final tip: Subscribe to the TPG Blog Newsletter now and never miss another blog post.

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