Every business is under constant pressure to do more with a smaller budget. One of the fundamental lessons for any business owner is how to allocate business resources so they can reach their maximum potential. An ineffective or nonexistent project resource management plan could have regular negative effects on your business, such as low productivity, quality or morale. With a solid process in place, though, your business can do more with fewer resources.
Put simply, resource management is the process businesses take to allocate their resources effectively.
The process has several stages, such as planning, scheduling and managing resources to reach their maximum efficiency. While resources vary greatly between businesses, they can generally be categorized as tangible assets, such as inventory, equipment and money, or intangible assets, such as people and time.
Resource management is often used in the context of project management. In this instance, “resource management” usually refers to resource leveling or resource smoothing, which are techniques to avoid a shortage or excess in a business’ resources or time. In other words, project resource management is about doing more things with fewer resources.
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Companies all over the world are so invested in optimizing what they have, they hire people whose entire job is resource management. Resource managers are responsible for allocating the appropriate resources to ensure a project is completed on time and within budget. They often work in conjunction with project managers, who are responsible for creating and assigning specific tasks.
Ultimately, an effective business owner or resource manager knows the minimal amount of resources necessary to achieve the best results.
The principles of effective resource management can be applied to various business structures. A small business can apply these principles in many different ways. For example, a local restaurant could use resource management as follows:
Finances: Restaurant managers must weigh their finances constantly to determine where money would be best spent. They may have to decide between hiring a new employee and investing in new kitchen equipment, considering what will make the entire business more efficient and profitable.
Resource management is the process of ensuring businesses are using their resources as effectively as possible. They can use this process for specific projects or for resources like staffing, equipment and technology.
You can implement several different resource management techniques in your business to become more efficient, but they all begin with identifying the resources available to you. A deep understanding of your various business processes and projects is key.
Once you’ve identified all your resources and business processes, you can start allocating, leveling and/or forecasting your resources. The goal is to continually improve your process by adjusting your staff, equipment and finances as needed to meet your objectives.
Regardless of how you incorporate resource management principles into your business, don’t overcomplicate the process.
“Keep it simple and compartmentalize,” said Strato Doumanis, chief technical officer and creative director of MediaCutlet. “Get all the major parts on paper in their most raw format.”
Doumanis reminds business owners that it’s best to establish the bookends of a project first, outlining where you are starting and where you need to go.
“Look at the biggest chunks of the project from the top down and, one at a time, begin carving out the more granular pieces needed to execute,” he added. “Then, get it on a timeline. This will help identify missing pieces while providing the skeleton for a project calendar and an incremental management approach.”
To manage your resources effectively, you must first identify all of your resources, your starting point and your end goal.
There are three primary resource management methods: resource allocation, resource leveling and resource forecasting.
Resource allocation is perhaps the most prevalent resource management method as every successful business does it on some level, even if it is not a formalized process. This is the process of utilizing the resources you have available and distributing them across different aspects of the business to run efficiently. A common example of resource allocation is staffing your business to run at maximum efficiency without going over budget.
This is the process of identifying any project that requires more resources than you have available and adjusting deadlines accordingly to ensure the project is ultimately successful. An example of resource leveling is when a construction company extends the project deadline to account for a limited supply of lumber, a critical material to complete the project.
Resource forecasting is the process of identifying all your available resources, such as time, people, finances and equipment, and predicting any resource requirements, bottlenecks or problems before a project begins. To forecast accurately, a resource manager must understand the entire scope of the project as well as any specific goals or objectives that must be met along the way.
There are many different approaches to resource management, some of which include the use of sophisticated software. However, many small businesses don’t have the budget for advanced project management software and instead adopt a workflow process to use their resources more efficiently.
“Agile is definitely the methodology that is being widely used now,” said Wade Millward, founder of Rikor. “It’s a great step forward from the traditional Waterfall method that was so prevalent for decades.”
However, he said Agile can have its own issues and is still evolving. “I think Agile can become better with quicker iterations and more autonomy. The question becomes how to effectively manage it, almost to a point where you can identify issues before they arise.” [Related article: Pros and Cons of 7 Project Management Styles]
There are three main types of resource management: resource allocation, resource leveling and resource forecasting.
Your business can benefit from an effective resource management plan in numerous ways. These are some of the things it can help you do:
Adapt to change quickly: One of the most beneficial elements of resource management in projects is the ability to change gears quickly when the unexpected happens. This can be a localized change, such as a key player exiting the company or an entire industry adjustment, such as how restaurants adapted to social distancing mandates due to COVID-19.
A resource management plan can help you identify and avoid problems, prevent organizational conflict, avoid over-reliance on any one resource and adapt to change quickly.
Millward said that a company culture of innovation and autonomy is key to a resource management plan. He recognizes that business owners, company leaders, project managers and resource managers are not always right.
“Rely on your team to come up with the best solutions to the problems you’re working on,” Millward said. “The collective is often smarter than an individual. If you empower your teams to make decisions, they can rapidly execute new initiatives without seeking upper-management approval, which is wasted time. By implementing smaller iterations faster, you can get it to market quicker to get the feedback you so critically need.”
Zoriy Birenboym, president of eAutoLease.com, also believes that the best resource management principles begin with the team. “My approach to all my business projects, to keep my team organized and on point, is to keep it very motivational and rewarding,” he said. “Motivation is key to getting a great end result. If I manage to keep everybody on top of their game with motivation and an end result that will bring something to the table for them, it usually is a great outcome.”
A successful resource management plan requires you to get your whole team involved. Don’t solely rely on upper management to drive this process.
Make sure you involve employees from all levels of the business when rolling out project resource management. Employees in hands-on roles may have a deeper or different understanding of processes and potential pitfalls. Plus, engaging your workforce tends to elicit their buy-in to any changes. You may need to try a few methodologies before you find the best approach for your business.
Be prepared to make adjustments and keep an open mind about what works for your team and your business. Before long you may find there are underutilized resources that you can tap into or that spending a little on a new or improved tool or increased headcount may ultimately bring in more money than it costs.
Jessica Pooree contributed to this article. Source interviews were conducted for a previous version of this article.