Managing Resource Constraints in Project Management: Insights from Industry Leaders

Mar 3, 2023 | Resource Management

Have you ever found yourself in a situation where you had a great idea for a project but had to shelve it because of limited resources? If so, you’re not alone. Resource constraints are a common challenge in project management, and they can be frustrating for project managers who want to deliver high-quality projects on time and within budget.

Resource constraints refer to the limitations of time, money, people, equipment, and materials that affect a project’s ability to be successful. Managing these constraints is an essential part of project management, and it requires careful planning, communication, and problem-solving skills. In this article, we’ll explore some examples of resource constraints in project management and provide insights into how to overcome them.

Types of Resource Constraints in Project Management

Before we dive into the examples, it’s essential to understand the different types of resource constraints that project managers face. Regarding project management, resource constraints are a common challenge that project managers must navigate. Resource constraints refer to the limitations of time, money, people, equipment, and materials that affect a project’s ability to be successful. Understanding the different types of resource constraints is essential for project managers to effectively manage resources, optimize resource utilization, and achieve project goals.

In this article, we’ll explore the various resource constraints in project management and provide insights into how to overcome them. Whether you’re a seasoned project manager or just starting, this article will provide the knowledge and tools needed to navigate resource constraints and deliver high-quality projects on time and within budget.

Time Constraints in Project Management

Time constraints refer to the limited time available to complete a project. This could be due to a strict deadline, a lack of flexibility in scheduling, or unforeseen delays that reduce the time to complete the project. In project management, time is one of the most critical resources.

Time constraints can impact a project’s success, and project managers must navigate various time-related challenges to ensure that projects are completed on time and within budget.

Understanding time constraints and implementing effective time management strategies is essential for project managers to optimize resource utilization, maintain productivity, and deliver successful projects.

Here are some examples of time constraints in project management:

1. Deadline-driven projects: Some projects are driven by strict deadlines, such as events or product launches, leaving little room for delays or extensions. For example, a software development project for an upcoming major sports event must be completed before the start of the event.
2. Seasonal projects: Projects that are tied to specific seasons or weather conditions may have limited windows of opportunity to be completed. For example, a construction project that involves exterior work may be restricted to the summer months due to weather conditions.
3. Regulatory compliance: Projects that must comply with specific regulations or legal requirements may be subject to strict timelines. For example, a healthcare provider must comply with new regulations related to data privacy, and must complete the necessary upgrades before a specified deadline.
4. Resource availability: Projects that require the availability of specific resources, such as people, equipment, or materials, may be subject to time constraints if those resources are not available within the desired timeframe. For example, a construction project may need to be completed before a specific piece of equipment is scheduled to be relocated to another project site.
5. Scope creep: Scope creep refers to the uncontrolled growth of a project’s scope, which can lead to delays and missed deadlines. For example, a marketing campaign may be expanded to include additional platforms or channels, leading to a longer timeframe for completion than originally anticipated.

In each of these examples, time constraints play a significant role in the project’s success. Project managers must identify potential time constraints and plan accordingly to ensure that the project is completed within the desired timeframe. Failure to do so can lead to delays, missed deadlines, and budget overruns, all of which can impact the project’s overall success.

Real-world examples of time constraints in project management:

To better understand the impact of time constraints in project management, let’s take a look at some real-world examples. In this section, we’ll explore different types of projects and the time constraints that were faced by their project managers.

By examining these examples, we can gain insight into the challenges that time constraints can present and the strategies that project managers used to overcome them.

• A construction project must be completed before the start of the rainy season, limiting the available time for completion.
• A software development project must be launched before the holiday season, limiting the available time for testing and bug fixes.

Tips for Managing Time Constraints in project management

Managing time constraints is an essential aspect of successful project management. To ensure that projects are completed on time and within budget, project managers must employ effective time management strategies.

In this section, we’ll provide tips for managing time constraints in project management. From prioritizing tasks to using project management tools, these tips can help project managers optimize resource utilization, maintain productivity, and deliver successful projects.

By implementing these strategies, project managers can effectively manage time constraints and achieve their project goals.

• Prioritize tasks and activities to focus on the most critical aspects of the project.
• Set realistic timelines and adjust them as needed to account for unexpected delays or obstacles.
• Use project management tools such as Gantt charts or Agile methodologies to track progress and ensure on-time delivery.

Budget Constraints in Project Management

Budget constraints refer to the limited amount of money to complete a project. This could be due to a restricted budget or unexpected expenses that increase the cost of the project. Managing budgets is a critical aspect of project management. Budget constraints can significantly impact a project’s success, and project managers must navigate various financial challenges to ensure that projects are completed within the available budget.

In this section, we’ll explore different types of budget constraints in project management and provide examples of how project managers have managed these constraints. We’ll also provide strategies for dealing with budget constraints, such as identifying areas for cost reduction, exploring alternative funding sources, and communicating openly with stakeholders.

By understanding budget constraints and implementing effective budget management strategies, project managers can optimize resource utilization, maintain financial stability, and deliver successful projects.

Here are some examples of budget constraints in project management:

1. Limited funding: Projects may be subject to budget constraints if funding is limited. This may be due to the availability of funds, restrictions on funding sources, or other financial factors. For example, a non-profit organization may have limited funds available for a specific project due to a decrease in donations.
2. Unexpected expenses: Projects may encounter unexpected expenses that increase the overall cost of the project, leading to budget constraints. For example, a construction project may encounter unforeseen soil or foundation issues that require additional work and materials.
3. Competitive pricing: Projects that are subject to competitive pricing may be subject to budget constraints if the project must be completed within a specific price range. For example, a marketing campaign may be subject to a limited budget due to the client’s financial constraints.
4. Cost of resources: Projects may be subject to budget constraints if the cost of resources, such as people, equipment, or materials, exceeds the available budget. For example, a software development project may require expensive software licenses that exceed the available budget.
5. Economic factors: Projects may be subject to budget constraints if they are impacted by economic factors, such as inflation or changes in the financial markets. For example, a construction project may face cost increases due to rising material prices.

In each of these examples, budget constraints play a significant role in the project’s success. Project managers must identify potential budget constraints and plan accordingly to ensure that the project is completed within the available budget. Failure to do so can lead to overspending, delays, or a failure to meet project goals. Therefore, careful budget planning and management are essential for project success.

Examples of budget constraints in project management:

To better understand the impact of budget constraints in project management, let’s take a look at some real-world examples. In this section, we’ll explore different types of projects and the budget constraints that were faced by their project managers.

By examining these examples, we can gain insight into the challenges that budget constraints can present and the strategies that project managers used to overcome them. Understanding these examples can help project managers identify potential budget constraints and plan accordingly to ensure that their projects are completed within the available budget.

• A non-profit organization must reduce its project budget due to a decrease in funding, limiting the available funds for staffing and resources.
• A manufacturing company must cut costs due to an economic downturn, limiting the available funds for research and development.

Strategies for Dealing with Budget Constraints

Dealing with budget constraints is an essential aspect of project management. Project managers must navigate various financial challenges to ensure that their projects are completed within the available budget. In this section, we’ll provide strategies for dealing with budget constraints in project management.

From identifying areas for cost reduction to exploring alternative funding sources, these strategies can help project managers optimize resource utilization, maintain financial stability, and deliver successful projects.

By implementing these strategies, project managers can effectively manage budget constraints and achieve their project goals.

• Identify areas where costs can be reduced without compromising the project’s quality or scope.
• Explore alternative funding sources, such as grants or partnerships, to supplement the available budget.
• Communicate openly with stakeholders and team members about the budget constraints and work collaboratively to find solutions.

Human Resources Constraints in Project Management

Human resources constraints refer to the limited availability of people with the right skills and experience to complete a project. This could be due to a lack of available staff or difficulty in attracting and retaining skilled personnel. Effective management of human resources is crucial for the success of any project. Human resources constraints, such as a shortage of staff or skills, can significantly impact a project’s success. In this section, we’ll explore different types of human resources constraints in project management and provide examples of how project managers have managed these constraints. We’ll also provide strategies for dealing with human resources constraints, such as identifying potential staffing gaps and leveraging technology to improve productivity.

By understanding human resources constraints and implementing effective management strategies, project managers can optimize resource utilization, maintain productivity, and deliver successful projects.

Here are some examples of human resources constraints in project management:

1. Limited staffing: Projects may be subject to human resources constraints if there are not enough staff available to complete the project. For example, a manufacturing company may not have enough employees with the necessary skills to complete a specific project.
2. Skillset gaps: Projects may be subject to human resources constraints if there are gaps in the required skillset of the available staff. For example, a software development project may require specialized programming skills that are not available within the organization.
3. Staff turnover: Projects may be subject to human resources constraints if there is a high rate of staff turnover within the organization. This can lead to a lack of continuity and difficulty in maintaining project momentum. For example, a startup may struggle to maintain staffing levels due to a high rate of employee turnover.
4. Competing demands: Projects may be subject to human resources constraints if staff members are already committed to other projects or responsibilities. This can lead to conflicts in scheduling and difficulties in prioritizing tasks. For example, a marketing campaign may be delayed due to competing demands on the creative team’s time.
5. Recruitment challenges: Projects may be subject to human resources constraints if there are challenges in recruiting and retaining skilled personnel. This can be due to factors such as location, competition from other employers, or a shortage of qualified candidates. For example, a rural healthcare provider may struggle to attract and retain specialized medical professionals due to the remote location.

In each of these examples, human resources constraints play a significant role in the project’s success. Project managers must identify potential human resources constraints and plan accordingly to ensure that the project is adequately staffed and that the necessary skills are available. Failure to do so can lead to delays, decreased productivity, and an inability to meet project goals. Therefore, effective human resources management is essential for project success.

Insights into human resource constraints in project management:

To better understand the impact of human resource constraints in project management, let’s take a look at some real-world examples. In this section, we’ll explore different types of projects and the human resources constraints that were faced by their project managers.

By examining these examples, we can gain insight into the challenges that human resource constraints can present and the strategies that project managers used to overcome them. Understanding these examples can help project managers identify potential human resource constraints and plan accordingly to ensure that their projects are adequately staffed and the necessary skills are available.

• A software development company struggles to attract and retain skilled programmers due to competition from larger companies, limiting the available human resources for development projects.
• A small business owner must juggle multiple responsibilities and cannot devote enough time to managing a project, limiting the available human resources for the project.

Techniques for Handling Human Resource Constraints

Managing human resources constraints is an essential aspect of project management. Human resources constraints, such as a shortage of staff or skills, can significantly impact a project’s success. In this section, we’ll provide techniques for handling human resource constraints in project management.

From leveraging technology to improve productivity to developing a contingency plan for staffing gaps, these techniques can help project managers optimize resource utilization, maintain productivity, and deliver successful projects. By implementing these techniques, project managers can effectively manage human resource constraints and achieve their project goals.

• Identify the skills and experience needed for the project and assess the available resources to identify gaps.
• Consider outsourcing or partnering with other companies to access additional talent or expertise.
• Prioritize tasks and delegate responsibilities to optimize the available human resources.

Equipment and Technology Constraints in Project Management

Equipment and technology constraints refer to the limited availability of machinery, software, or other tools needed to complete a project. This could be due to a lack of resources or outdated technology that hinders productivity. In today’s business world, equipment and technology play a vital role in project management. Equipment and technology constraints can significantly impact a project’s success, and project managers must navigate various challenges to ensure that projects are completed on time and within budget. In this section, we’ll explore different types of equipment and technology constraints in project management and provide examples of how project managers have managed these constraints.

We’ll also provide strategies for dealing with equipment and technology constraints, such as identifying potential compatibility issues and exploring alternative equipment and technology solutions. By understanding equipment and technology constraints and implementing effective management strategies, project managers can optimize resource utilization, maintain productivity, and deliver successful projects.

Here are some examples of equipment and technology constraints in project management:

1. Outdated equipment: Projects may be subject to equipment and technology constraints if the available equipment is outdated or not up to the task required. This can lead to decreased productivity and an inability to meet project goals. For example, a manufacturing company may be using outdated machinery that hinders production.
2. Limited access: Projects may be subject to equipment and technology constraints if there is limited access to the necessary equipment or technology. This can be due to factors such as location, availability, or ownership. For example, a construction project in a remote area may have limited access to the necessary equipment due to the difficulty of transporting it.
3. Compatibility issues: Projects may be subject to equipment and technology constraints if there are compatibility issues between different pieces of equipment or technology. This can lead to delays and difficulties in integrating different aspects of the project. For example, a software development project may require different pieces of software that are not compatible with each other.
4. Cost considerations: Projects may be subject to equipment and technology constraints if the cost of the necessary equipment or technology exceeds the available budget. This can lead to difficulty in acquiring the necessary resources and an inability to meet project goals. For example, a startup may be unable to afford the necessary technology infrastructure for a software development project.
5. Technical expertise: Projects may be subject to equipment and technology constraints if there is a lack of technical expertise to effectively utilize the available equipment or technology. This can lead to decreased productivity and an inability to meet project goals. For example, a marketing campaign may require specialized software that the team is not familiar with.

In each of these examples, equipment and technology constraints play a significant role in the project’s success. Project managers must identify potential equipment and technology constraints and plan accordingly to ensure that the necessary resources are available and that they are being effectively utilized. Failure to do so can lead to delays, decreased productivity, and an inability to meet project goals. Therefore, effective equipment and technology management is essential for project success.

Examples of equipment and technology constraints in project management:

To better understand the impact of equipment and technology constraints in project management, let’s take a look at some real-world examples. In this section, we’ll explore different types of projects and the equipment and technology constraints that were faced by their project managers. B

y examining these examples, we can gain insight into the challenges that equipment and technology constraints can present and the strategies that project managers used to overcome them. Understanding these examples can help project managers identify potential equipment and technology constraints and plan accordingly to ensure that their projects have the necessary resources and tools to succeed.

• A construction company must use outdated equipment due to budget constraints, limiting productivity and efficiency.
• A marketing agency must use outdated software that hinders productivity and reduces the quality of the final product.

Solutions for Overcoming Equipment and Technology Constraints

Dealing with equipment and technology constraints is an essential aspect of project management. Equipment and technology constraints, such as compatibility issues or limited availability, can significantly impact a project’s success. In this section, we’ll provide solutions for overcoming equipment and technology constraints in project management.

From exploring alternative equipment and technology solutions to developing contingency plans for unexpected issues, these solutions can help project managers optimize resource utilization, maintain productivity, and deliver successful projects. By implementing these solutions, project managers can effectively manage equipment and technology constraints and achieve their project goals.

• Explore alternative technologies or tools that can achieve the same or similar results with less equipment.
• Consider leasing or renting equipment to reduce upfront costs and allow for flexibility in usage.
• Invest in training and development to optimize the use of existing equipment and technology.

Material and Supply Constraints in Project Management

Material and supply constraints refer to the limited availability of necessary materials and supplies needed to complete a project. This could be due to supply chain disruptions or increased demand for specific materials.

Managing material and supply constraints is a critical aspect of project management. Material and supply constraints, such as a shortage of necessary materials or limited availability, can significantly impact a project’s success.

In this section, we’ll explore different types of material and supply constraints in project management and provide examples of how project managers have managed these constraints. We’ll also provide strategies for dealing with material and supply constraints, such as identifying potential cost reduction opportunities and exploring alternative sourcing options.

By understanding material and supply constraints and implementing effective management strategies, project managers can optimize resource utilization, maintain productivity, and deliver successful projects.

Here are some examples of material and supply constraints in project management:

1. Shortage of materials: Projects may be subject to material and supply constraints if there is a shortage of necessary materials. This can be due to factors such as supply chain disruptions, unexpected demand, or limited availability. For example, a manufacturing company may not have access to the necessary raw materials for production due to a supply chain disruption.
2. Limited availability: Projects may be subject to material and supply constraints if the necessary materials are not readily available. This can be due to factors such as location, availability, or ownership. For example, a construction project may require specific types of building materials that are not available in the local area.
3. Cost considerations: Projects may be subject to material and supply constraints if the cost of the necessary materials exceeds the available budget. This can lead to difficulty in acquiring the necessary resources and an inability to meet project goals. For example, a research project may require expensive laboratory equipment that is outside the project budget.
4. Quality issues: Projects may be subject to material and supply constraints if the quality of the available materials is not up to the required standard. This can lead to delays and an inability to meet project goals. For example, a construction project may require high-quality concrete, but the available concrete is not strong enough.
5. Regulatory compliance: Projects may be subject to material and supply constraints if the necessary materials must comply with specific regulations or legal requirements. This can lead to difficulties in sourcing the necessary materials and an inability to meet project goals. For example, a food manufacturing project may require specific ingredients that comply with food safety regulations.

In each of these examples, material and supply constraints play a significant role in the project’s success. Project managers must identify potential material and supply constraints and plan accordingly to ensure that the necessary resources are available and that they are being effectively utilized. Failure to do so can lead to delays, decreased productivity, and an inability to meet project goals. Therefore, effective material and supply management is essential for project success.

Real-life examples of material and supply constraints in project management:

To better understand the impact of material and supply constraints in project management, let’s take a look at some real-world examples. In this section, we’ll explore different types of projects and the material and supply constraints that were faced by their project managers. By examining these examples, we can gain insight into the challenges that material and supply constraints can present and the strategies that project managers used to overcome them.

Understanding these examples can help project managers identify potential material and supply constraints and plan accordingly to ensure that their projects have the necessary resources to succeed.

• A manufacturer of electronic devices cannot source the necessary components due to a supply chain disruption, limiting the available materials for production.
• A restaurant owner must adjust the menu due to a shortage of specific ingredients, limiting the available supplies for menu items

Approaches to Managing Material and Supply Constraints

Managing material and supply constraints is a crucial aspect of project management. Material and supply constraints, such as a shortage of necessary materials or limited availability, can significantly impact a project’s success. In this section, we’ll provide approaches to managing material and supply constraints in project management.

From implementing effective inventory management techniques to exploring alternative sourcing options, these approaches can help project managers optimize resource utilization, maintain productivity, and deliver successful projects. By implementing these approaches, project managers can effectively manage material and supply constraints and achieve their project goals.

• Work with suppliers and vendors to identify alternative sources or substitute materials.
• Develop contingency plans to account for supply chain disruptions or unexpected material shortages.
• Consider alternative approaches to production or design that can reduce the need for specific materials or supplies.

Best Practices for Resource Management in Project Management

Effective resource management is essential for project success. In this section, we’ll explore best practices for resource management in project management.

From identifying and prioritizing project resources to implementing effective communication and monitoring strategies, these best practices can help project managers optimize resource utilization, maintain productivity, and deliver successful projects.

By implementing these best practices, project managers can effectively manage project resources and achieve their project goals.

To optimize resource management, project managers should consider the following best practices:

• Develop a comprehensive project plan that considers all types of resource constraints and outlines strategies for managing them.
• Use data and analytics to forecast resource needs and plan accordingly.
• Monitor progress regularly and adjust plans as needed to account for changing circumstances or unexpected obstacles.

Resource constraints are a common challenge in project management, but they can be overcome with careful planning, communication, and problem-solving skills. By understanding the different types of resource constraints and applying best practices for managing them, project managers can optimize resource utilization, achieve project goals, and deliver high-quality projects on time and within budget. So, keep calm and carry on managing your resources effectively.

Maximizing Productivity and Profitability with Professional Services Resource Management

Feb 24, 2023 | Resource Management

I. Introduction

Professional services resource management is critical for businesses that offer professional services, such as consulting, engineering, and legal services. 

Proper resource management ensures that the right people are assigned to the right projects at the right time, completing projects on time, on budget, and to clients’ satisfaction. 

In this article, we’ll explore the challenges of professional services resource management and discuss best practices, technology, and tools businesses can use to maximize productivity and profitability.

II. Challenges of Professional Services Resource Management

Forecasting and planning are among the biggest challenges of professional services resource management. Businesses must clearly understand their project pipeline and the resources needed to complete those projects. This can be difficult, as project timelines can change, and new projects can arise unexpectedly.

Another challenge is resource allocation and scheduling. Businesses must ensure that their resources are optimally utilized without overburdening staff or leading to burnout. Project managers must clearly understand their team’s capacity and the workloads of individual team members.

Tracking and utilization is another key challenge. Businesses must be able to track the time spent on projects, monitor resource utilization, and analyze key metrics to identify areas for improvement.

here are some common challenges for resources management as a professional services firm:

1. Resource forecasting and planning: Professional services firms must accurately forecast and plan their resource needs to ensure that they have enough staff with the right skills to meet demand. This can be challenging, as demand can be unpredictable, and staff availability can be limited.
2. Resource allocation and scheduling: Professional services firms must allocate resources effectively and schedule workloads efficiently to ensure that staff members are not overburdened or underutilized. This can be challenging, as different projects may require different levels of resources, and staff members may have different skill sets and availability.
3. Time and expense tracking: Professional services firms must track employee time and expenses accurately to bill clients appropriately and ensure that they are not over or undercharging clients. This can be challenging, as employees may work on multiple projects simultaneously, and tracking their time and expenses can be time-consuming and prone to error.
4. Project management: Professional services firms must manage projects effectively, ensuring that they are delivered on time, within budget, and to the satisfaction of clients. This can be challenging, as projects may involve multiple stakeholders, varying requirements, and unforeseen obstacles.
5. Communication and collaboration: Professional services firms must communicate effectively and collaborate closely to ensure that all stakeholders are aligned, and projects are completed smoothly. This can be challenging, as different teams may have different priorities, goals, and communication styles.
6. Recruitment and retention: Professional services firms must recruit and retain talented staff members to maintain high-quality services and meet client demand. This can be challenging, as the competition for top talent can be intense, and staff turnover can be costly and disruptive.
7. Technology and data management: Professional services firms must leverage technology effectively to manage resources, track time and expenses, and analyze data. This can be challenging, as different teams may use different tools and systems, and integrating these tools can be difficult.
8. Regulatory and compliance requirements: Professional services firms must comply with various regulations and requirements, such as data privacy and security regulations, which can be complex and time-consuming to manage.

By addressing these challenges effectively, professional services firms can optimize their resource management and deliver high-quality services to clients while maximizing productivity and profitability.

III. Best Practices for Professional Services Resource Management

To address these challenges, businesses can adopt several best practices for professional services resource management. First, resource planning and forecasting should be a collaborative effort between project managers, HR, and finance teams. By working together, businesses can ensure that resources are allocated effectively and efficiently.

Second, resource allocation and scheduling should be optimized through the use of project management tools and software. These tools can help project managers manage their teams’ workloads, track time, and monitor resource utilization.

Third, tracking and utilization can be improved through the use of business intelligence and analytics platforms. These platforms can provide detailed insights into resource utilization, project profitability, and client satisfaction, enabling businesses to identify areas for improvement and make data-driven decisions.

Here are some best practices and advice for professional services resource management:

1. Forecast and plan: Businesses must have a clear understanding of their project pipeline and resource requirements to allocate resources effectively. Project managers should collaborate with HR and finance teams to forecast resource needs accurately and plan for them in advance.
2. Optimize resource allocation and scheduling: Use project management tools and software to allocate resources optimally and schedule workloads effectively. Project managers must understand their team’s capacity and monitor their workloads to avoid burnout.
3. Track and analyze key metrics: Utilize business intelligence and analytics platforms to monitor resource utilization, track time spent on projects, and analyze key metrics to identify areas for improvement. This will help identify potential issues and make data-driven decisions to optimize resource management.
4. Consider hiring and onboarding practices: Proper onboarding and training can help new resources become productive more quickly and avoid overburdening existing team members. Businesses must ensure that they have adequate resources to meet demand and consider hiring additional resources during peak periods.
5. Establish communication and collaboration: Communication is essential for effective resource management. Establish regular check-ins and encourage open communication channels between team members and managers. Project management tools and software can help centralize communication and improve collaboration.
6. Monitor project budgets and timelines: Projects should be monitored closely to ensure that they stay on budget and are completed within the set timelines. Track progress regularly and identify potential issues early to address them proactively.
7. Conduct regular performance reviews: Conduct performance reviews regularly to identify high-performing team members and areas for improvement. Feedback can help optimize resource utilization and encourage employee development.
8. Continuously evaluate and adapt: Professional services resource management is an ongoing process. Continuously evaluate processes and tools and adapt to changing circumstances. Be open to feedback and continuously seek ways to improve resource management.

By implementing these best practices, businesses can optimize professional services resource management and improve productivity, profitability, and client satisfaction.

Metrics and KPIs That Effective Resource Management Can Impact in Professional Services Firms

Effective resource management can have a significant impact on a range of metrics and KPIs in professional services firms, including:

1. Resource utilization rate: This metric measures the percentage of time that staff members are working on billable projects compared to their total available time. Effective resource management can help increase the utilization rate, leading to higher productivity and profitability.
2. Project profitability: This metric measures the profitability of individual projects, taking into account the resources allocated to the project and the revenue generated. Effective resource management can help optimize resource allocation, leading to higher project profitability.
3. Client satisfaction: This metric measures the level of satisfaction that clients have with the services provided by the firm. Effective resource management can help ensure that projects are delivered on time, within budget, and to the satisfaction of clients.
4. Time-to-market: This metric measures the time it takes to complete a project and bring a product or service to market. Effective resource management can help optimize project timelines and reduce time-to-market, leading to a competitive advantage.
5. Employee productivity: This metric measures the productivity of individual staff members, taking into account the time spent on billable projects and non-billable tasks. Effective resource management can help optimize workloads and improve employee productivity.
6. Revenue per employee: This metric measures the amount of revenue generated per employee, taking into account the revenue generated and the number of staff members. Effective resource management can help increase revenue per employee, leading to higher profitability.
7. Project completion rate: This metric measures the percentage of projects completed within the set timeline and budget. Effective resource management can help ensure that projects are completed on time and within budget.
8. Capacity utilization: This metric measures the percentage of the firm’s overall capacity that is being utilized. Effective resource management can help optimize capacity utilization, leading to higher productivity and profitability.

By tracking these metrics and KPIs, professional services firms can gain insights into the effectiveness of their resource management and make data-driven decisions to optimize their operations, improve productivity and profitability, and deliver high-quality services to clients.

IV. Technology and Tools for Professional Services Resource Management

Several technologies and tools can help businesses optimize professional services resource management. Resource management software, for example, can streamline resource planning and forecasting, automate resource allocation and scheduling, and enable real-time monitoring of resource utilization.

Project management tools can help businesses manage project timelines, budgets, and resources, while also providing a centralized location for communication and collaboration. Additionally, business intelligence and analytics platforms can help businesses gain insights into key metrics, such as project profitability, utilization rates, and client satisfaction.

Why use PSA Software for Professional Services Resource Management?

A PSA software is a professional services automation software that helps businesses in professional services industries manage and optimize their operations, including resource management, project management, time and expense tracking, billing and invoicing, and analytics. 

PSA software is typically used by businesses that offer services such as consulting, engineering, and IT services, as well as by project-based businesses.

PSA software can automate many of the routine administrative tasks involved in running a professional services business, such as project planning, time tracking, and billing, which allows businesses to focus on delivering high-quality services and growing their business. 

PSA software typically includes modules for project management, resource management, time and expense tracking, billing and invoicing, and analytics, which can help businesses gain visibility into their operations and make data-driven decisions.

Some of the key features of PSA software include:

1. Resource management: PSA software can help businesses allocate resources optimally, monitor their workload, and track their utilization.
2. Project management: PSA software can help businesses manage projects from start to finish, from planning and resource allocation to tracking progress and monitoring budgets.
3. Time and expense tracking: PSA software can automate time and expense tracking, making it easier for employees to log their time and expenses and for managers to review and approve them.
4. Billing and invoicing: PSA software can automate billing and invoicing processes, making it easier for businesses to bill clients accurately and on time.
5. Analytics: PSA software can provide insights into key metrics, such as project profitability, resource utilization, and client satisfaction, enabling businesses to identify areas for improvement and make data-driven decisions.

Overall, PSA software can help professional services businesses improve their efficiency, productivity, and profitability, making it a valuable tool for businesses in these industries.

V. Examples of Effective Professional Services Resource Management

Several companies have successfully implemented professional services resource management best practices and tools to improve productivity and profitability. For example, a consulting firm implemented resource planning and forecasting best practices, enabling them to anticipate resource needs and allocate resources more effectively. As a result, they were able to increase their project profitability by 20%.

Another company implemented resource allocation and scheduling best practices, including the use of project management tools. This enabled them to optimize their teams’ workloads and increase their resource utilization rate by 15%, resulting in increased productivity and profitability.

The 2022 Professional Services Maturity™ Benchmark by Service Performance Insight, LLC provides valuable insights into the impact of effective resource management on key performance indicators (KPIs) in professional services firms. The following metrics and impacts highlight the benefits of effective resource management:

Unlocking the Power of PSA Software: KPIs of Professional Services Firms with Integrated Solutions

• YoY Change in PS Revenue 11.8% (+36%)
• Deal Pipeline / Quarterly Bookings forecast 192% (+15%)
• Employee Billable Utilization 75.3% (+11%)
• Annual Revenue per billable consultant 208 000$ (+6%)
• Annual Revenue per Employee: 168 000$ (+13%)
• Project Margin: 37.6% (+13%)
• Profit (EBITDA): 16.5% (+22%)
• Win to bid Ratio: 5.55 (+16%)
• Revenue Growth: 12.8% (+26%)
• Headcount Growth: 12.1% (+55%)
• New clients acquisition: 27.1% (+33%)
• Billable Utilization: 76.4% (+6.5%)
• Project Margin: 39% (+17%)

Key Performance Indicators of High-Performing Professional Services Firms with Effective Resource Management

• Deal pipeline relative to qtr. bookings forecast 228% (+36%)
• Win-to-bid-ratio 62.9% (+32%)
• Percentage of referenceable clients 80.2% (+10%)
• Annual services sales revenue quota / person 1 920 000$ (+46%)
• Average project staffing Time: 9.37 Days (+3%)
• Average revenue per project: 260 000$ (+72%)
• Average project staff: 4.22 resources (+2%)
• Average project duration: 6.36 Months (+3%)
• Projects delivered on-time: 86.9% (+12%)
• Average project overrun: 6.3% (-29%)
• Use a standardized delivery methodology: 75% (+12%)
• Project margin for time & materials projects: 46.3% (+46%)
• Project margin for fixed-price projects: 47.4% (+50%)
• Annual revenue per billable consultant (k): 246,000$ (+32%)
• Quarterly revenue target in backlog: 56.89% (+41%)
• Percent of annual revenue target achieved: 101.8% (+9%)

By monitoring these metrics and continuously improving resource management practices, professional services firms can optimize their operations, improve productivity and profitability, and deliver high-quality services to clients.

Conclusion

Professional services resource management is critical for maximizing productivity and profitability in businesses that offer professional services. By adopting best practices and leveraging technology and tools, businesses can address the challenges of resource planning, allocation, and tracking, and improve project outcomes, client satisfaction, and profitability.

Mastering Resource Balancing: Key Strategies for Successful Project Management

Feb 21, 2023 | Resource Management

I. Introduction to Resource Balancing:

I. Introduction

• Definition of resource balancing in project management
• Importance of resource balancing in project success

II. Identifying Project Resource Requirements

• Assessing the project scope and objectives
• Identifying required resources (human, financial, and material)
• Creating a project resource plan

III. Assessing Resource Availability

• Determining the availability of resources
• Identifying resource constraints and conflicts
• Evaluating the impact of resource limitations

IV. Developing Resource Allocation Strategies

• Balancing resource supply and demand
• Prioritizing resource allocation
• Dealing with resource shortages and overages

V. Monitoring and Controlling Resource Usage

• Tracking resource usage and expenditures
• Monitoring resource performance
• Managing resource changes and conflicts

VI. Mitigating Resource Risks

• Identifying potential risks to project resources
• Developing risk mitigation plans
• Implementing contingency plans for resource failures

VII. Conclusion

• Importance of effective resource balancing in project management
• Key takeaways and best practices for successful resource management.

Definition of resource balancing in project management

Resource balancing is a critical aspect of project management that involves effectively allocating and managing project resources to achieve project goals and objectives. It ensures that the right resources are available at the right time, in the right quantities, and at the cost to support project activities and deliverables. Resource balancing helps project managers optimize resource utilization, minimize waste, and maintain project quality and schedule.

Effective resource balancing requires a deep understanding of project requirements, resource availability, and resource utilization patterns. Project managers must identify the resources needed for project activities, assess the availability of these resources, and develop strategies to allocate and manage them efficiently. They must also be able to monitor resource usage and adjust resource allocation as needed to ensure that the project stays on track and within budget.

This article will explore key strategies and best practices for mastering resource balancing in project management. We will discuss identifying project resource requirements, assessing resource availability, developing resource allocation strategies, monitoring and controlling resource usage, and mitigating resource risks. Project managers can achieve better resource utilization and project success by following these strategies.

Importance of resource balancing in project success

Resource balancing is a critical component of successful project management. It ensures that project activities are completed within the available resources, timeframes, and budgets. Here are some of the key reasons why resource balancing is essential for project success:

Optimize resource utilization

• Resource balancing helps project managers optimize resource utilization by allocating resources effectively.
• By balancing the availability and demand of resources, project managers can avoid over- or under-utilization of resources, which can affect project quality and schedule.

Meet project goals and objectives

• Proper resource balancing ensures that the necessary resources are available to achieve project goals and objectives.
• By having the right resources available at the right time, project managers can ensure project deliverables are completed on schedule and within budget.

Minimize resource waste

• Effective resource balancing reduces resource waste, which is important for maintaining project profitability.
• By avoiding over-allocation of resources or unnecessary purchases of resources, project managers can reduce project costs and maximize the value of the resources available.

Manage project risks

• Resource balancing helps to manage project risks by anticipating and mitigating potential resource shortages or conflicts.
• By developing contingency plans for resource failures, project managers can reduce the impact of resource risks on the project and avoid delays or additional costs.

Overall, effective resource balancing helps project managers to deliver projects that meet expectations, are completed within budget and timeframes, and are of high quality. Without resource balancing, projects can face resource shortages, scheduling conflicts, cost overruns, and project failures.

II. Resource Balancing: Identifying Project Resource Requirements

Before effective resource balancing can be achieved, project managers must first identify the resources required for the project. This involves assessing the project scope and objectives, identifying the types of resources needed (human, financial, and material), and creating a comprehensive resource plan.

A. Assessing the project scope and objectives

• Project scope defines the work that must be completed to achieve project objectives.
• Project objectives specify the desired outcome or results of the project.
• A thorough understanding of the scope and objectives of the project is essential to determine the types and quantities of resources required.

B. Identifying required resources (human, financial, and material)

• Human resources include project team members, vendors, contractors, and consultants.
• Financial resources include project budget, funding, and investments.
• Material resources include equipment, supplies, and technology required to complete the project.
• Project managers must consider all required resources to ensure successful project completion.

C. Creating a project resource plan

• A project resource plan outlines the resources required for the project, including human, financial, and material resources.
• The plan should include a detailed breakdown of each resource, its estimated cost, and the timeframes during which the resource is required.
• The project resource plan serves as a foundation for effective resource balancing throughout the project lifecycle.

By identifying project resource requirements in a comprehensive resource plan, project managers can ensure that resources are allocated efficiently, and potential resource shortages are anticipated and avoided.

IV. Resource Balancing: Assessing Resource Availability

Once the project resource requirements have been identified, the next step in resource balancing is to assess the availability of the required resources. This involves determining the availability of resources, identifying resource constraints and conflicts, and evaluating the impact of resource limitations on the project.

A. Determining the availability of resources

• Project managers must assess the availability of resources by reviewing resource schedules, contracts, and availability.
• They should also evaluate resource utilization patterns to determine if resources are being over- or under-utilized.

B. Identifying resource constraints and conflicts

• Resource constraints occur when resources are not available in sufficient quantities to meet project demands.
• Resource conflicts occur when multiple project activities require the same resource at the same time.

C. Evaluating the impact of resource limitations

• Resource limitations can cause delays, cost overruns, or reduced project quality.
• Project managers must evaluate the potential impact of resource limitations and develop strategies to mitigate the impact.

By assessing the availability of resources, project managers can determine if the required resources are available when needed and can develop contingency plans to mitigate any potential risks or limitations. This helps to ensure that the project is completed on schedule and within budget while maintaining high-quality standards.

IV. Resource Balancing: Developing Resource Allocation Strategies

Effective resource allocation is key to successful project management. It involves balancing resource supply and demand, prioritizing resource allocation, and dealing with resource shortages and overages.

Here are some strategies project managers can use to optimize resource allocation:

A. Balancing resource supply and demand

• Project managers must balance resource supply and demand by allocating resources effectively.
• They must also anticipate potential resource shortages or surpluses and plan accordingly.

B. Prioritizing resource allocation

• Project managers must prioritize resource allocation based on project goals, objectives, and critical success factors.
• They must also consider the availability of resources and any potential conflicts or constraints.

C. Dealing with resource shortages and overages

• In cases of resource shortages, project managers must develop strategies to manage the impact of the shortage, such as re-allocating resources, rescheduling tasks, or outsourcing.
• In cases of resource overages, project managers must determine if the overage is necessary, and if not, reduce resource allocation or re-allocate the resources to other tasks.

By developing effective resource allocation strategies, project managers can optimize resource utilization, minimize waste, and ensure project success. They must also remain flexible and able to adapt to changing project requirements and resource availability throughout the project lifecycle.

VI. Resource Balancing: Mitigating Resource Risks

Resource risks are an inherent part of project management. They can cause delays, cost overruns, and reduced project quality. It is essential for project managers to identify potential risks to project resources, develop risk mitigation plans, and implement contingency plans for resource failures. Here are some strategies project managers can use to mitigate resource risks:

A. Identifying potential risks to project resources

• Project managers must identify potential risks to project resources by reviewing resource availability, utilization patterns, and conflicts.
• They should also consider external factors such as supplier reliability, natural disasters, or geopolitical risks.

B. Developing risk mitigation plans

• Project managers must develop risk mitigation plans for identified resource risks by assessing the probability and potential impact of the risks.
• They should also consider the cost-benefit of implementing the mitigation plan.

C. Implementing contingency plans for resource failures

• Project managers must develop contingency plans for resource failures to reduce the impact of the failure on the project.
• Contingency plans may involve re-allocating resources, rescheduling tasks, or outsourcing.

By mitigating resource risks, project managers can reduce the likelihood and impact of resource failures. This helps to ensure project success by minimizing delays, cost overruns, and reduced project quality. Project managers should continuously monitor the project and adjust the risk mitigation and contingency plans as needed to ensure that the project remains on track.

VII. Conclusion to Resource Balancing

Effective resource balancing is a critical component of successful project management. It involves identifying resource requirements, assessing resource availability, and developing effective resource allocation strategies to ensure that project goals are met within budget and on schedule. In addition, project managers must also mitigate resource risks by identifying potential risks, developing risk mitigation plans, and implementing contingency plans for resource failures.

In conclusion, the importance of effective resource balancing in project management cannot be overstated. It is essential for project managers to develop a thorough understanding of the project’s resource requirements, availability, and utilization patterns to ensure that resources are allocated effectively. Project managers should also remain flexible and adaptable to changing project requirements and resource availability.

Key takeaways and best practices for successful resource management include prioritizing resource allocation based on project goals, objectives, and critical success factors, identifying potential resource risks, developing risk mitigation plans, and implementing contingency plans for resource failures.

By implementing these best practices, project managers can optimize resource utilization, minimize waste, and ensure project success. This will enable them to deliver projects on time, within budget, and to the satisfaction of all stakeholders involved.

VIII. Optimizing Resource Balancing: How a PSA Software Can Help Professional Services Organizations

Managing resources in a project is a challenging task that requires careful planning and execution. It involves identifying resource requirements, assessing resource availability, and developing effective resource allocation strategies to ensure that project goals are met within budget and on schedule. In today’s business world, professional services organizations (PSOs) face a variety of challenges when it comes to resource balancing. These include changing customer demands, increasing competition, and the need to optimize resource utilization. One way PSOs can overcome these challenges is by using a professional services automation (PSA) software. In this article, we will explore how a PSA software can help with resource balancing.

What is a PSA Software?

A PSA software is a tool that helps PSOs manage their projects, resources, and finances. It is a centralized platform that provides end-to-end project management capabilities, from project initiation to project closure. 

PSA software enables PSOs to automate key business processes, such as project planning, resource allocation, time tracking, and invoicing. It also helps organizations optimize resource utilization and improve project profitability.

How a PSA Software Can Help with Resource Balancing

PSA software can help PSOs manage resource balancing in a variety of ways. Here are some of the key benefits of using PSA software for resource balancing:

Real-time Resource Visibility

PSA software provides real-time resource visibility, enabling project managers to see resource availability and utilization patterns at a glance. This helps project managers make informed decisions about resource allocation, ensuring that resources are allocated effectively. Real-time resource visibility also helps project managers identify potential resource conflicts and shortages, allowing them to take proactive measures to mitigate these risks.

Optimized Resource Utilization

PSA software enables PSOs to optimize resource utilization by identifying and allocating resources to projects based on their skills, availability, and utilization patterns. This helps organizations maximize their resource utilization and improve project profitability. PSA software also enables PSOs to forecast future resource requirements, allowing them to plan for resource needs in advance.

Resource Planning and Forecasting

PSA software enables PSOs to plan and forecast resource needs based on project demands. Project managers can use PSA software to identify potential resource shortages or surpluses and plan accordingly. This helps organizations avoid the risks of under- or over-utilization of resources. PSA software also enables PSOs to manage resource demand and capacity, ensuring that resources are allocated effectively.

Klient Truthful_Forecast

Time and Expense Management

PSA software helps PSOs manage time and expense tracking, enabling project managers to monitor resource utilization in real-time. This helps project managers identify potential over or underutilization of resources, and take proactive measures to optimize resource allocation. PSA software also provides an accurate record of time and expenses, allowing organizations to accurately bill clients and monitor project profitability.

Resource Allocation and Scheduling

PSA software enables PSOs to allocate and schedule resources to projects based on their skills, availability, and utilization patterns. This helps organizations optimize resource utilization and ensure that resources are allocated effectively. PSA software also enables project managers to adjust resource allocation and scheduling as project requirements change.

Collaboration and Communication

PSA software enables project teams to collaborate and communicate in real-time, improving project efficiency and effectiveness. Project managers can use PSA software to assign tasks and monitor progress, ensuring that resources are allocated effectively. PSA software also enables project teams to share information and collaborate on project tasks, improving communication and reducing the risk of errors or misunderstandings.

Conclusion

Resource balancing is a critical component of successful project management. It involves identifying resource requirements, assessing resource availability, and developing effective resource allocation strategies to ensure that project goals are met within budget and on schedule. PSA software can help PSOs manage resource balancing by providing real-time resource visibility, optimizing resource utilization, planning

Complete Guide to Resource Leveling vs. Resource Smoothing In Project Management

Sep 23, 2022 | Resource Management

Without a project resource management system, it is difficult for any project (or team) to succeed. It’s all too common to have resources from different projects overlap or for certain tasks to suddenly need additional people or equipment. When this happens, the project manager (PM) should be able to re-allocate or re-adjust as required. This flexibility is crucial as the average employee is severely overworked and burnt out due to unrealistic deadlines. In a 2021 global survey conducted by the consulting firm ADP Research Institute, they discovered that 67 percent of respondents experienced stress at work, up from 62 percent pre-pandemic.

While the primary goal of PMs is to ensure each project is executed as efficiently as possible to save costs, they also have to consider proper management of company assets and work-life balance for employees. Human workers are the company’s greatest resource, and their well-being should be a priority. This is where resource leveling and resource smoothing become handy. These two strategies enable PMs to look at their project plans and pinpoint problematic areas, like days when people are overworking or unrealistic deadlines given the available resources.

In this article, we’ll walk you through resource smoothing vs. resource leveling, their advantages/disadvantages, and the situations where these methods work best.

The resource management process

First, it’s important to understand the process of resource management, which involves planning, scheduling, and allocating people, technology, and money to a project. Resource management is crucial because it helps PMs prepare an inventory of existing resources, pinpoint gaps or missing information, and prioritize allocation based on the needs of different projects.

This process has three main components: resource allocation, resource leveling, and resource smoothing. The first step is resource allocation, where team members are assigned specific tasks based on their strengths and expertise. This is the planning stage, where resources are strategically placed to optimize the timeline. 

However, projects might encounter resource and time constraints for various reasons. Resource leveling or smoothing is a method for anticipating these challenges and applying the right solutions and adjustments.

Here is a quick video on how resource management can work in a Professional Services Automation or Project Management Software.

What is Resource Leveling?

Based on the Project Management Body of Knowledge (PMBOK) Guide, resource leveling helps PMs evenly allocate resources by adjusting a project’s start and completion dates. This strategy ensures that no one is overworking, the equipment is available, and requirements are made clear so that there are no additional costs to the project. 

Leveling works best when there are limited resources and the PMs want resource usage at a constant level. That’s why this technique is sometimes referred to as resource constrained scheduling (RCS). 

There are several factors that will help PMs apply resource leveling effectively. First is knowing the dependencies or the relationships between tasks. For example, which activities must be completed before the team can move on to the next? Another factor to consider is the resource conflict. What is the main issue that needs to be solved? Is it human resources, equipment, or technology? 

Finally, it is also important to look at the different types of constraints. Is it mandatory (physical limitations like lack of equipment), discretionary (team members’ preferences or actions), or external (third-party challenges)? Only after figuring out these factors can PMs create a resource leveling plan that adequately addresses the pressing concerns of the project.

According to Online PM Courses, here are some of the things PMs can do during resource leveling:

• Delay start times
• Extend planned duration
• Remove some tasks
• Allocate additional resources
• Split tasks up
• Bring tasks forward
• Assign alternative resources

In addition, there are also specific instances where resource leveling can be used:

• There is no fixed deadline (e.g., the project can be finished within the first quarter of the year).
• A resource has to be shared with another project (e.g., some teams have to work on another website for a few weeks).
• A resource is highly in-demand (e.g., laboratory equipment has to be used for three projects simultaneously).
• A resource is unavailable for a certain time (e.g., a subject matter expert won’t be available to consult until they return from their holiday).

Basically, resource leveling answers this question: Given the resources you have, when will you be able to complete the project?

Watch the complete video about What is Resource Leveling from OnlinePMCourses here:

Advantages and disadvantages of resource leveling.

Aside from re-balancing resources, leveling can offer several advantages:

• Identifying under-allocated or unused resources 
• Maximizing downtimes
• Reducing project delays
• Team members can have one centralized reference that they can use to adequately prepare for their next tasks.
• Team members are working on areas/tasks that best suit their expertise

However, there might also be disadvantages to this technique, mainly because something has to be sacrificed, whether cost, scope, or time.

Other disadvantages:

• Risks of tasks delays and budget overruns
• Can be tricky to re-shuffle some tasks, especially if they’re all critical
• There might have to be additional resources (whether labor, time, or budget)

Example scenario of resource leveling:

Suppose a project is planned to be completed in two days. It has three activities (A, B, and C), and each activity takes 8 hours to complete. 

Activities A and B can be done by one employee (Alex) and C by another (Jane). 

At first, it would seem like A and B could be performed at the same time by Alex. However, it would take Alex 16 hours to complete both activities. This situation would lead to him being overworked on the first day.

To address this, the PM decides to extend the project to three days instead of two. Activity B is then moved to Day 2 to give Alex enough time to finish each task and evenly allocate working hours.

Resource leveling methods

Now that we’ve discussed the basics of resource leveling, let’s look at the different methods or techniques that PMs can use, depending on the urgency of the situation. There are three main methods: critical path analysis, fast tracking, and crashing.

Critical path analysis (CPA). This most common technique comprises mapping out every critical task needed to finish a project. This process includes identifying how long it would take to complete each task and the other tasks dependent on each other. CPA is a good tool to ensure that deadlines are realistic.

The first step in CPA is to define all project tasks (both critical and non-critical), and the maximum and minimum times it would take to complete these tasks. It’s also important to include slack time (or float) in the calculation to come up with a reasonable deadline.

A timeline is then created to track each task using Gantt and bar charts. CPA is often used in industries that have complicated processes. However, most CPAs are now automated using resource management software.  

Fast-tracking. This resource leveling technique compresses schedules so that some tasks are completed simultaneously instead of sequentially. For example, if certain activities are not dependent on each other, they can be done on the same day. This method is particularly helpful if there is simply not enough time.

One example of this technique is creating different prototypes before a design has been approved. However, while this can save some time in the beginning, it does have the risk of being reworked if there are mistakes or massive changes to the design.

Crashing. This method is often considered the last resort, particularly if fast tracking is still insufficient. The idea behind crashing is to shorten the project duration by adding more resources (e.g., labor and equipment) with the least possible cost, including hiring extra staff or paying a premium to acquire a service faster.

This technique can become expensive real quick, so it’s best to use it when there are no other options available or when a project can no longer afford to miss its deadline.

The chart below summarizes the main differences between resource leveling vs. resource smoothing in project management.

What is resource smoothing?

We’ve discussed resource leveling and when to use it, let’s now look at the other resource optimization technique: resource smoothing. Some people might be confused about when to use resource leveling versus smoothing because they have very subtle differences. 

Resource smoothing is used to balance the peaks and troughs of individual tasks after they have been leveled or re-allocated. Whereas resource leveling deals with the question of resource constraints, smoothing deals with time constraints (which is why it is also known as time constrained scheduling (TCS)).

Here are some instances where resource smoothing works best:

• There is a fixed deadline (e.g., the tasks have to be completed within their allotted timeline).
• The resources have been properly re-allocated, and the critical tasks can no longer be re-shuffled.
• Only minor tweaks are needed to smooth out the timeline (e.g., slight changes in working hours).

Advantages and disadvantages of resource smoothing

While often done at the last stages of the project, resource smoothing is a good tool to keep everyone on track. This method is particularly crucial since the project can no longer afford any delays at this point, particularly for critical activities.

Advantages:

• Project sticks to its assigned timelines
• Tasks are monitored well 
• Fewer ambiguities and unexpected factors that can affect the overall schedule

Disadvantages 

• No more room for flexibility
• Increased pressure to stick to the timeline
• People have to commit to their work schedules as best as they can

Example scenario of resource smoothing:

A project must be completed within three days and is once again assigned to Alex and Jane. They can both work on the project simultaneously, without any activity dependencies. The PM notices that on Day 1 and Day 2, Jane is working 10 hours while Alex is working for only 6 hours.

The PM then re-arranges the tasks on Days 1 and 2 so that they’re evenly distributed (as much as possible) between Alex and Jane. This strategy would ensure that both employees are not overburdened and can maintain the quality of their output to finish the project on time (Day 3).

The important thing to remember on resource optimization is to understand the main challenge the project is facing. Sometimes, these two techniques are done simultaneously to ensure that issues are being addressed in a timely manner. Like everything around project management, there is a time for flexibility and a time to stick to the plan.

Find out how Resource Leveling & Resource Smoothing can be done in resource management tool.

If you want a resource management tool that’s automated, flexible, and highly customizable, Klient can build one to tailor it to the needs of your business. We can help you take control and manage staffing, and allocate tasks appropriately and intuitively.

Resource Management in a PSA Software for a specific project

Resource Management in a PSA Software for all your project.

We’d love to help you out. Schedule a demo with us.

Everything you need to know about Resource Histogram for Project Management

Sep 23, 2022 | Resource Management

• What is a Resource Histogram?
• Why Use a Resource Histogram?
• What Can You Do With a Resource Histogram? An Introduction to Resource Leveling and Smoothing
• How to Build a Resource Histogram on Excel/Google Sheets?

Project management is a complicated beast, mainly because it requires monitoring resources. And resources – whether people, time, or money – can rapidly disappear. However, with a resource histogram, project managers (PMs) don’t have to panic. That’s because they know exactly where the budget is going daily and where they might tweak things to get the project back on track. 

Resource histograms are just one way PMs streamline processes and protect themselves from unexpected situations. Fortunately, companies seem to be catching up to the importance of being prepared. According to the Project Management Institute (PMI), wasted funding due to poor project management (e.g., budget overshoots, scope creep, and missed deadlines) has declined to 9.4 percent in 2021 compared with 11.4 percent in 2020. 

In this overview, we’ll walk you through your burning questions about resource histograms, how to build and implement one, and how you can take advantage of these tools to get the best results possible.

What Is a Resource Histogram?

A resource histogram is a visualization and statistical tool used to manage resources. Typically, a simple table might give you an idea of how your resources are monitored daily, but it’s hard to visualize information that way. (Also, let’s face it, tables can be boring). By turning your tables into resource histograms, you can easily see at a glance how well you’re keeping everything on track and if daily costs are exceeding the budget.

You might have guessed it, but the first step is establishing the resource cutoff per day. Without this clarity, it can be very easy to overshoot spending or over-allocate. Next is creating a “table of dependencies,” where details like types of activities, how long these activities will take, and how much they will cost per day are recorded. From this information, you can create a Gantt chart to visualize the data. 

Most people stop at this part. But if you take a step further and create a histogram, then you can have a better guide on when to move resources around or when to delay the due dates. We highly recommend two great videos from Engineer4Free that explain this concept really well. But, don’t worry, we will explain everything in this blog.

Video #1: Resource histogram explained for project management

Video 2: Resource constraining example with resource histogram

However, to give you a better context, we will explain the concept further with some nuance.

Why Use a Resource Histogram?

Aside from getting a cool visualization tool, resource histograms give you detailed information on the progress of your projects. In particular, some tasks are too complex and have many components; without a resource histogram, it’s like getting lost in a maze. The Gantt chart below demonstrates how you can have multiple activities/resources that overlap on a project. 

In this video, you can watch how a Professional Services Automation/Project Management Software replace a Resource Histogram with no effort.

When to Use a Resource Histogram?

The PM can use a resource histogram throughout the project. It can be a handy tool, even if it takes time and effort to create one in Excel. (It can even be manually created on paper, but it would be time-consuming and error-prone).

The resource histogram can help PMs figure out how profitable a particular activity is and which activities are interdependent. They can also monitor different processes and make data-based decisions. For example, they can determine which part of the project might benefit from added resources or have been over-allocated for quite some time.

Below are other examples of when a resource histogram is most beneficial.

• You have a limited budget and must stick to it to the last dollar. Sometimes, budgets are incredibly tight, and overspending even for a few hundred dollars can lead to the dreaded scope creep (when unplanned tasks keep adding up, most of which were not initially included in the budget allocation).
• You want to limit the number of daily resources assign for a project. For example, you have a specific role that executes a particular task and want to monitor that these tasks/roles don’t excessively overlap or get unnecessarily duplicated.

To demonstrate this, let’s say we have five parent tasks for the whole project.

In the table of dependencies below, you can see that each task/role is clearly specified per day, along with their corresponding budgets. Being detailed as much as possible helps to create relevant and accurate histograms.

This is the kind of table that is simple to do like this, but it’s a nightmare for a 6 months project. This is the kind of report that a PSA Software can generate quickly.

Pros and Cons of a Resource Histogram

While resource histograms are very useful, they also have certain limitations. For one, it feels outdated and should have been automated long ago. But resource histograms do serve a purpose, and PMs continue to benefit from this simple but informational tool. 

Pros:

• They allow users to compare and contrast data easily.
• The data can cover a long period range (e.g., monthly or annually).
• They have commonly used tools, and references are easy to find.

Cons:

• It can be difficult to compare different categories because histograms work best with one dataset over a long period.
• They can require a lot of file space just to display basic information.
• They can present misleading or incomplete data if the parameters are not clarified in the first place. 

What can you do with a Resource Histogram?

Resource histograms enable PMs to do two main strategies: resource leveling and resource smoothing. 

Introduction to Resource leveling

Let’s say you discovered through your resource histogram that there are three days where the project exceeds the daily budget or time limit. PMs can then re-shuffle major activities to move some tasks to the days below the resource limits, leveling the playing field and avoiding strains on teams.

When to use resource leveling

Resource leveling basically ensures that resources are spread evenly throughout all the client’s projects. Here are some examples of when to apply this technique. 

• To maximize resources. As we described earlier, projects can have multiple tasks, and companies can have various projects simultaneously. With resource leveling, PMs can ensure that resources are re-allocated as needed. 
• To give teams work-life balance. For groups overworking or exceeding time limits, PMs can either bring in other employees to help or push back the timeline to accommodate incontrollable delays (e.g., experiments and test results). 
• To manage client expectations and output quality. PMs can efficiently update their clients on how resources are allocated while maintaining the quality of every deliverable. 

Resource leveling examples

Here are more concrete situations where resource leveling works best:

Moving a project completion date.

Let’s say a user interface (UI) developer team is refreshing an e-commerce website for re-launch within the week. However, a bug fix has been delayed for a couple of days. Since it is very critical to ensure that all bugs have been fixed beforehand, the PM can choose to extend the deadline to the following week. To make up for the lost time, the PM can maybe tweak the due dates of some minor tasks.

Moving a project start date.

A large project is due to start by next week, but the requirements/specifications from the client are still not complete. The PM communicates to the client that since they don’t have all the needed information yet, they will have to start a few days later. The PM then gives the client choices on how they want to re-allocate resources to compensate for the lost time caused by the client’s delay. 

Short on staffing.

A team of software engineers got sick at the same time, and a project needs to be delivered to the client by next week. The PM can then re-allocate some of the engineers from the other projects that are not due yet to help out in the meantime.

Introduction to Resource smoothing

Resource smoothing is usually done after resource leveling. In leveling, the primary constraint is resources; in smoothing, it’s time or schedule. After everything has been re-allocated, PMs saw that there were still some workdays that exceeded the limit within the new plan. The PM can then re-allocate tasks and teams without major re-shuffles, particularly in critical activities. 

Want to learn more about Resource smoothing and leveling? 

When to use resource smoothing

Smoothing ensures that things are going according to plan and that the project won’t have any more significant shifts or scope creep. Here are some examples of when to use resource smoothing.

• The project deadline is set in stone. PMs can look at their histograms and ensure that work hours and labor are evenly allocated across the remaining days/months.
• The critical paths/activities are not going to be affected. As long as the main tasks are going along as scheduled, then some small re-shuffles (a day or two) will be fine.
• Some minor activities can be paused within their timeframe. To make room for other more crucial tasks, some activities can be slightly delayed without much impact on the overall project timeline.

Resource smoothing examples

To better visualize how this technique works, here are some sample situations where resource smoothing works best.

1. The project is due within the week, and the PM sees that everyone seems to be working overtime on Wednesday. The PM can re-allocate the excess work hours to the other weekdays to smooth out the schedule.
2. A website banner is due for review on Monday, but the Design Manager is on leave and will return on Wednesday. The PM can pause the review until the manager returns. Fortunately, the manager will still be able to finish the task before the banner’s scheduled to release on Friday.

How to Build a Resource Histogram on Excel/Google Sheets?

First of all, it’s much more simple to use a project management software or a PSA software to manage those. But I know that some of you are still using excel for those report. Now that we’ve gone through the background and essential characteristics of resource histograms, let’s look at how we can build them. We’ll start with a relatively simple example. First, we need to create a table of dependencies on Microsoft Excel. For example, the table below shows the number of employees required per month.

Next, select the entire table, including the titles and headings, and click the Insert tab. Under Column, select the Stacked Column in 3-D (under 3-D Column). (You can also choose the 2-D version, but in general, stacked columns work best).

Our table of dependencies should be transformed into this:

Source: Watch the complete video from Eugene O’Loughlin on how to Create a Resource Histogram in Excel.

As we can see from this basic resource histogram, additional information can be included, like extending the months or adding more roles/employees. This way, PMs can immediately see the months where employees would be needed more (e.g., July-September on the sample histogram). The team can then prepare in advance for these periods, including hiring additional staff if required.

Another way to read this histogram is if there’s an employee limit. For example, the client only wants to pay for 10 employees max for this project. By referring to the histogram, PMs can choose to shuffle specific tasks so that they are performed in the first quarter or last quarter of the year, where resource allocation is much lower.

For more information on how to build resource histograms in Excel, you can check this video out.

Resource histograms can be simple to create but can give valuable detail. It all depends on how PMs want to use and adjust them to the project’s needs.

Are you interested in a resource management tool for your business?

You don’t need to be an excel wiz to do this kind of report. This is why a solution like Klient can help you out. If you want a resource management tool that’s automated, flexible, and highly customizable, Klient can build one to tailor it to the needs of your business. We can help you take control and manage staffing, and allocate tasks appropriately and intuitively.

We’d love to help you out. Schedule a demo with us.