Effective resource management in projects: A practical guide

Effective planning and optimal use of project resources are key to strategic project management. Every global study shows that the number of projects carried out in organizations steadily increases. Thus, the resource demand is growing, expanding the organization’s cost base. A more extensive cost base negatively affects the company’s profitability, which is already a topic that management cannot trivialize. Especially in large organizations with many concurrent projects, effective management of resources in projects is the main task of the Resource Management Office. This is quite a difficult task, but at the same time, it is labor-intensive and challenging to perform without a good project management tool. So, how do we effectively manage resources in projects?

Lack of resources is a key barrier to effective strategy implementation. How can we deal with it?

One interesting global study on barriers to effective strategy implementation has identified a lack of adequate resources as a key barrier to achieving intended project goals. To effectively manage project resources, it is worthwhile to deeply understand the factors contributing to too many projects and too few resources to implement them properly. The most important of these factors are:

A non-methodical approach to selecting new projects from the many ideas identified. Scoring models are not used in this regard, and managers do not discuss insightfully which projects to pursue.
Lack of linking the company’s strategic goals to projects and KPI metrics. Every company is concerned with achieving its strategic goals and strengthening its market position. KPI metrics tell us whether strategic objectives are being achieved and to what extent. You can read more about project-based strategy management in the article: How to link a company’s strategic goals with KPIs and projects?
No defined approach (methodology) explains how the organization wants to manage resources effectively in projects.

It is worth understanding that it is better to implement fewer projects simultaneously to provide them with proper resource support.

How do you choose the best ideas for implementation?

Managers and company boards must be competent in selecting projects for implementation from among the many proposals available. Project managers or project team members quite rarely decide this. The illustration below shows that organizations often have far more ideas for potential projects than implementation opportunities. If an organization wanted to implement all the good ideas, the gap between available and required resources would be significant. So, the only way to implement a good process is to select and implement only the best projects objectively.

Sometimes, the organization does not fully understand how and why the decision to implement this or that project was made. Such situations are unacceptable in the context of professional project management. The organization must have a process to ensure objective project selection. A scoring model should be part of such a process. An example of a scoring model is shown in the figure below and concerns the selection of new products.

Building such a model involves defining criteria/questions and assigning them appropriate weights. Then, when we have, for example, 10 ideas for new products and analyze each of these ideas with a scoring model, we will get information on which ideas are the most attractive. Remember that such a model should support expert discussion rather than a clear decision. For more on building scoring models and their use in decision-making, see the article: How to evaluate project ideas effectively?

In addition to scoring models, it is still worth linking projects to the company’s strategic goals. Managers ask themselves: does this project support any goal in our strategy, and to what extent? Such a substantive discussion results in poor projects not being implemented. The following illustration shows a link between a specific strategic objective, projects, and KPIs.

How do you forecast and allocate project resources?

Forecasting and allocating specific resources to projects are two different organizational processes. Forecasting allows, at a high level, the need for resources for the following year to be estimated. We’re talking about estimation here, not precise planning, since such is virtually impossible in most cases. Let’s assume that the end of the year is approaching, and we want to estimate the demand for project resources for the following year. In such a situation, any number of projects that are currently underway will continue next year. More projects will also be launched next year. While we have relatively good and often detailed information on projects that are underway, we will have limited information on projects yet to start. We will not have detailed plans for these projects, but we will have an outline of them placed, for example, in Project Charters. Therefore, forecasting is done at the level of roles or competencies, not specific employees. For example, increasing forecasting accuracy can be done by making high-level project schedules, which will have specific significant phases and, potentially, milestones. As a result of forecasting, we will get relatively accurate information about what competencies we will need in the next year, in what quantities, and how this need will be distributed over time. Such information is very valuable, as it will allow us to plan project distribution over time better and give us time to recruit the needed resources. The figure below shows the resource demand for the first months of 2025.

We will allocate specific resources once we launch a particular project for implementation. Often, the process looks like this: the project manager requests a specific resource/competency from the resource manager, and the resource manager assigns such a resource to the project by name.

Optimization of work and resource availability

Resource management processes (forecasting and allocation) should be monitored for effectiveness and improvement. The Project Management Office should ensure the best possible use of project resources in the organization. Optimizing the use of resources requires good resource planning and monitoring the extent to which these plans are used. Allocating resources to a specific project involves assigning tasks to a particular employee and determining how many hours should be enough to complete the task. The figure below shows the employee’s commitment to projects and specific tasks over the horizon of the following month. The figure shows that the employee is committed to three projects in the coming month and lists all the tasks he will be involved in.

Monitoring the actual hours worked during the project is a good idea. This can be done by recording the working time for the entire project or precisely for each task performed. The figure below shows a comparison of planned and actual work time.

Regular scheduling of resources and recording actual working time provide invaluable information over time for better planning and, thus, better use of project resources. At the end of a project, it is also worthwhile to analyze and describe the conclusions on management effectiveness in the Project Closure Sheet. Such findings are invaluable when we launch another similar project in the organization. Optimizing the use of resources also involves the judicious allocation of tasks to individual employees. Ensuring that employees have the right competencies to perform the assigned functions is worth ensuring. Otherwise, we get low-quality work, which often manifests in employee frustration.

Resource conflicts: where do they come from, and how do we resolve them?

Resource conflicts are a fairly common phenomenon. They mainly involve a resource being required simultaneously on several projects or assigned simultaneously to too many tasks. In addition, in selected periods, its workload is much higher than its availability.

Such a situation occurs when the Project Manager or Resource Manager does not have comprehensive information about the employee’s involvement in project work when assigning a project or task to that employee. Most often, this is due to the lack of a good project management software to support project resource management. When the Project Manager or Resource Manager can access precise information about the tasks to which a particular employee is assigned, such situations can be largely avoided.

Is Excel enough to effectively manage project resources?

Many organizations, even large ones, do not forecast the use of project resources at all. Decisions are made to start more projects, and project managers and team members are assigned to projects without knowing their overall workload. This results in periods when selected employees are over- or under-loaded with work. When an organization realizes that the resource management process needs to be streamlined, it often develops some MS Excel solution. In smaller organizations, this approach may work well. However, large organizations that involve dozens or even hundreds of people in parallel projects cannot work effectively using Excel alone. It isn’t easy to design an effective resource management process in Excel. Such a process requires interaction between project managers, resource managers, and project team members. Excel cannot handle the simultaneous work of many users and is also not a tool for process modeling.

Of course, Excel can serve as a “transitional” tool. The organization begins to learn resource management with it and sees its limitations. After some time, the organization decides and implements a professional project and project resource management tool. In a professional program, all aspects of resource management are integrated with project schedules and tasks. When employees are assigned to the next task, the system immediately informs them of the availability of a particular employee. This greatly facilitates the work and adequately coordinates the entire resource management process. It is essential to realize that entering resource utilization data into the information system is, to some extent, labor-intensive. The benefits of professional resource management far outweigh the labor spent on data entry.

Effective project resource management in practice

All organizations that want to achieve increasing project maturity levels should implement a process for forecasting and allocating resources to projects. Effective resource management has an unequivocally positive impact on greater efficiency in project execution. With many resources involved in projects, implementing a good project and project resource management program is worth implementing. Such an integrated solution eliminates much of the manual work, automates many aspects, and provides precise information about the degree of resource utilization.