Businesses need strategic planning to manage and execute projects efficiently. Project managers plan resources effectively and make decisions to manage obstacles in real-time. Utilizing available resources optimally is key to the success of a project and managers use resource allocation software to manage this critical function competently.
What is Resources Utilization?
Managers need resources to complete their projects. Once they have determined what skills are required for a particular project and its various tasks, they check the resources and skills available within the organization and acquire more resources to bridge any skill gaps that may be there. Project coordinators then allocate and schedule the right resources to the right task at the right time. They manage the available resources in the best way possible to meet the project’s demands through resource allocation.
But resource allocation by itself is not enough. Resources also need to be used to their optimum capacity for a project to be viable. They must be utilized to their maximum potential.
Resource utilization is a KPI that tells managers how efficiently the allocated resources are being used. It measures the performance and effort of each resource over a period of time and compares it to the actual capacity and skills of that resource. Resources are the most valuable asset of any business and managers need to use their resource pool optimally. The resource utilization rate tells managers about the productivity of the team as well and helps them monitor the team performance.
Why is it Important for Managers to Know how Resources are Being Utilized on a Project?
Employees undertake various activities during their working day; some are billable to the client while others are routine paperwork or those required for long-term resource management. The amount of time each employee spends on these activities against their total availability is the utilization of that resource.
Managers can see how many actual hours an employee worked compared to the planned number of hours. They can also know how much time a resource is spending on productive activities and get an overview of whether the resource is being utilized to its full capacity.
Smart resource allocation and optimal resource utilization allow the project manager to plan schedules effectively. A resource is optimally utilized when engaged in profitable activities matching his skills to the maximum capacity. Over-or underutilization of resources can lead to employee burnout and even attrition. Resource allocation software like eResource Scheduler assists managers with this and helps improve productivity and increase profits.
Resource utilization reports track the utilization of resources and give managers a bird’s eye view of how effectively the resources are being utilized. These help managers monitor the resource capacity and assign resources to more strategic and productive tasks to optimize resource utilization.
How Does Resource Utilization Affect a Project?
A project must be delivered on time and within budget to be profitable. By measuring resource utilization, managers can:
- track the progress of the project and avoid delays
- distribute the workload more evenly and ensure that no one is over-or underutilized
- plan better for future resource requirements
- allocate resources to more productive tasks
When resources are not utilized to their optimum capacity, it can affect the project’s success. Some resources may be overworked and working too many hours, while others might not be allocated enough tasks matching their skills and are underutilized. Poor utilization of resources will eventually lead to:
- Employee burnout and reduced productivity. Over-or underutilized resources will be stressed and burned-out or dissatisfied with their jobs and may leave the company. Poor mental health would lead to lower productivity.
- Delayed projects. When resources are shared across projects, they may have schedule conflicts. Unless tasks and projects are prioritized, they may not be able to meet project deadlines.
- Reduced profitability. If resources are not utilized effectively, managers may need to hire more resources to complete the project on time. This would hike up the costs and dip the profits. Project delays would do the same.
How Can Managers Ensure Optimum Resource Utilization Using Resources Allocation Software?
Efficient resource planning and effective resource allocation is the top priority for project resource managers. As we saw, optimal resource utilization is an integral part of resource management. Project managers increasingly use resource allocation software like eResource Scheduler to streamline and simplify this process.
- Real-time resource availability. Managers can allocate and utilize resources optimally only if they know the exact availability of resources at any given time. Resource allocation software gives all the relevant information in real-time and enables managers to make smart decisions. It also factors in employee vacations, holidays, etc.
- Efficient resource allocation and scheduling. With all relevant information available in one central pool, managers can match the right resources with the right tasks, and schedule effectively without schedule clashes, overbooking or benching or underutilizing any resources. Tasks can be scheduled and allocated easily with a single click on the resource allocation software.
- Optimize resource schedules. By studying each resource’s schedule on the dashboard in real-time managers can know when the resource will become available for future projects. This is especially crucial for shared resources. They can then decide if more resources need to be hired (resource levelling) or redistribution of tasks (resource smoothing) will be enough. Resources can be easily reallocated using the resource allocation software.
- Precise project planning. Resource allocation software gives a 360-degree view of the entire project and the resources required. Project managers can use this to plan resources accurately and ensure that they have a team with all the required skill sets.
- Up-to-date resource utilization reports. Project managers need to track the progress of the project continuously. The real-time utilization reports generated by the resource allocation software help them keep a tab on each resource’s utilization rate and billable hours and take measures to avoid over-or underutilization. They can maximize billable utilization by mobilizing resources for productive tasks. Managers can also monitor each employee’s productivity and performance using these reports.
- Enhanced productivity. Employees have access to relevant information on the project scope, their own assigned tasks and the progress of the project. They are aware of how their task affects the outcome of the project. Employees are motivated when the tasks assigned to them align with their skills and competencies and their productivity goes up. Projects can be delivered more efficiently and effectively.
- Identify skill gaps. Resource allocation software lists all resources and their individual skills and competencies. This view helps project managers identify any gaps that may exist in the skillsets of their talent pool. They can then take steps to bridge these gaps by upgrading the existing resources’ skills through training or by hiring new resources.
- Increased project profitability. Optimal utilization of resources has a direct impact on the bottom line of the organization. Projects can be delivered on time and within budget, costs are kept under control and the profitability of the project goes up. Clients are satisfied with the outcome of the project and are likely to offer more projects to the organization, which has a positive effect on the long-term business goals.