Project Resource Management: Definition, Process and Template

Project management is important for leading a business, as a function of which, we need to ensure that projects are completed within set timelines, planned budgets, and required quality standards of delivery. Effective project resource management is a highly essential ingredient of project management which involves identifying, acquiring, and effectively utilizing resources required to complete a required project successfully. It encompasses several processes, which include planning resource deployment, estimating activities and resources, acquiring resources, developing team members, managing the team, and controlling resources by set timelines.

Budding project managers often enroll themselves in some of the best Project Management courses for developing the skills necessary for effective project resource management. In this article, we will delve deeper into project resource management, types of resources, the processes related, best practices, and top resource management tools.

What is Project Resource Management?

Project resource management is one of the primary aspects of project management and involves managing resources required towards completion of a project. The resources can be of several types which include human resources, materials, and costs. Effective project resource management is crucial for ensuring that projects are completed on time, within budget, and meeting the desired quality standards, i.e., the topics among the several offerings of PMP exam training online.

The process of project resource management involves -

• Identifying the resources required for a project
• Planning how these resources at various stages of the project
• How resources should be acquired and utilized
• Effective management of resources are effectively managed throughout the project's lifecycle

Effective project resource management ensures that project teams have the resources they need to complete the project and that resources are utilized opt optimally. With proper resource management techniques, project managers would be able to ensure that their projects are completed as per the requirements.

Why is Project Resource Management Important?

Managing resources systematically helps project managers and organizations in multiple ways. It helps reduce the overall project costs, ensures the availability of required resources, and helps improve resource utilization. Let's see some of the benefits in detail. PRINCE2 training reviews suggest such a course or learn Project Management programs can help you understand the value of managing resources concerning other areas of project management.

1. Minimizes Project Resource Costs Significantly

Sudden, unplanned resource requirements are costly to fulfill. A planned resource acquisition strategy ensures you have the right resources at the right cost.

• Resource management helps you make make-or-buy decisions, allowing you the flexibility to reduce costs through alternative sourcing strategies.
• Enables you to proactively manage the risks of failures or unavailability, thus ensuring you are always within the budget.
• Mitigate the risks of delays by proactively planning for acquisition and replenishment as needed.
• Allows you to make just-in-time resource acquisition, thus increasing resource utilization.

2. Bridges the Capacity vs. Demand Gap

An effective resource management strategy helps you identify the correct quantity of resources required and the skills or capabilities of manpower, machines, or technology. Through Resource Forecasting, you can predict the resource demands and devise strategies to fulfill those demands at the right time with the right resources.

3. Improves Effective Resource Utilization

A clear picture of demand and supply enables you to identify better resource utilization strategies. You can balance available and required resources and decide on the strategy to ensure the most effective utilization. You can also ensure that the right resources are utilized for the right activities, thus increasing the chances of efficient execution and project success. A Software system like Human Resource Information System (HRIS) can be beneficial in this area.

4. Uses Scarce Resources Effectively in a Matrixed Organization

Certain project activities may require unique expertise or machinery. Since such resources are typically costly, organizations might have those in limited quantity, requiring them to be shared between projects and functions.

An effective resource plan and management strategy provides visibility of requirements and engagement of such resources. As a result, project managers can ensure that they plan the activities in a way that allows them to use scarce resources effectively.

5. Monitors and Improves Organization Health Index

A good resource management activity ensures the timely acquisition and allocation of resources. Through proactive planning and communication with stakeholders, various functions of the organizations, and external entities that may impact resource availability, organizations can ensure that they utilize the resource effectively.

Such effective utilization also results in better employee morale. These combined factors improve organizational efficiency and lead organizations toward success, thus improving the Organization Health Index (OHI).

Types of Resources in Project Management

Project resource management involves managing three main types of resources, namely work, materials, and costs.

1. Work

Work resources refer to human resources, including the project team members, project managers, and other stakeholders involved in the project. Managing work resources involves identifying the necessary skills and competencies required to complete the project and ensuring that the right people are assigned to the project. Effective work resource management involves ensuring that team members have the necessary tools and resources required to complete their tasks within the set timelines and to the desired quality standards.

2. Materials

Materials resources refer to the physical resources required to complete the project, including equipment, supplies, and infrastructure. Managing materials resources involves identifying the materials required to complete the project, ensuring that they are available when needed, and managing their usage to ensure that they are used efficiently.

3. Costs

Cost resources refer to the financial resources required to complete the project, including salaries, materials, equipment, and other expenses. Managing cost resources involves developing a budget for the project and managing costs to ensure that the project is completed within the set budget.

Areas Included in Managing Resources in Project

Each project will need multiple types of resources depending on the nature of the project. However, it is essential to consider all possible areas while you are approaching resource management. Let us see some key areas you should consider while planning your resource management efforts effectively.

1. Finance Management

Money is a critical resource for any project and will be required for almost every project activity, directly or indirectly. Hence, finance management is a crucial area for project resource management efforts. Finance management includes project budgeting, managing the cash flow as required, and managing the cost risks. It also entails continuous monitoring to ensure that scope creep or other unexpected costs do not negatively impact the project's timelines or budget.

While working with finance management, you must consider direct and indirect costs, like taxes. An effective finance management process will help you utilize your financial resources more effectively.

2. Staffing Management

Staffing Management is a critical aspect of project success. It deals with one of your projects' most essential resources: people. From developing staffing strategies to ensuring that people with the right skills are available at the right time, staffing management covers managing people throughout the project lifecycle.

The first step is identifying the required skills for each project activity. Then, based on this understanding, you must identify the gaps between availability and requirements. Such an analysis must cover the required people and their skill sets. Finally, you must decide how to fill the gaps based on the gap identification. For example, if you have a sufficient number of people but not the required skill set, you might either consider training available resources or hiring from outside.

Such decisions depend on cost and how soon you need the people.

3. Space Management

Space management availability and efficient use of physical space resources to create a productive and comfortable environment for your project team. Space management includes identifying the kind of space you need and its layout, selecting and placing furniture, equipment, and other items within the workspace, and providing adequate storage options for supplies.

While working on the space management aspects, you must consider multiple factors that can influence the working environment and team morale. Comfort, health, hygiene, safety, and security are some key considerations. Of course, depending on the project requirements, there can be more. However, these are some of the essentials.

In addition to creating a comfortable working environment, effective space management can also help increase employee productivity and morale and thus influence project outcomes.

4. Equipment Management

Equipment management ensures that all required tools and machinery are available to the team for project activities. It also includes regular maintenance checks, necessary repairs, and replacement of parts or components.

Effective equipment management also ensures the following:

• Improve safety by reducing the risk of injury from malfunctioning or damaged tools.
• Identify potential hazards before they become serious issues with regular inspections
• Calibration and maintenance to ensure that all equipment is functioning correctly

5. Technology Management

Technology management involves using software and hardware to manage data and processes and enable efficient communication on your projects.

Proper technology management can help projects in the following manner.

• Improve efficiency by streamlining their processes and eliminating tedious manual tasks.
• It can help ensure data security by providing access control measures
• It May help the team remain connected regardless of location or device used.

Investing in advanced technologies can increase the chances of your project's success.

Effective technology management can help in other project areas, too. For example, Resource Management software may help you carry out resource management tasks more efficiently. Undertaking a PMP virtual training will help you understand many more dimensions of resource management.

What are the Steps in Project Resource Management?

Project Resource Management involves identifying, assessing and allocating resources necessary for meeting the project objectives.
The steps in managing resources include:

1. Resource Planning
2. Estimate Resources
3. Acquire Resources
4. Develop and Manage the Team
5. Continuously Evaluate The Resources

Let us see each of these steps in detail.

Step 1: Resource Planning

The resource planning step involves defining the strategy to manage resources, which includes how you will estimate the resources required, how you will identify the gap, how you will fill those gaps, and how you will manage the risks related to the resources.

The outcome of the resource planning strategy is the resource management plan that guides all other resource management activities. Many techniques, including Material Resource Planning (MRP) and Resource Management Software can help you with this step.

Step 2: Estimate Resources

Estimating resources involves accurately predicting the amount and types of materials, personnel, and equipment needed to complete a project within a given timeline and budget.

Through practical resource estimation, businesses can ensure they are not overspending or underutilizing their resources. Additionally, it allows them to identify potential issues and create contingency plans in case any unexpected events occur.

Estimating resources should include the following:

• Research current market prices for materials, labor costs for personnel, and rental fees for equipment.
• Evaluating any existing contracts that may affect resource availability.
• Forecasting future needs based on past trends.
• Setting achievable goals.
• Tracking progress.
• Revising plans as needed.

You can use techniques like Analogous estimation, expert judgment or bottom-up estimation methods to complete the resource estimation step.

Step 3: Acquire Resources

The acquire resources step is where you have ensured the availability of resources for the project. It entails the following activities;

• Identify the sources that can provide the required resources.
• For internal resources, there might be internal processes to acquire them for the project. For hiring resources externally, you might need to float the bids and ask for a quotation from appropriate vendors.
• The process of hiring external resources will include identifying the right vendors and suppliers, getting quotations and comparing their offers, negotiating contracts and ensuring that formalities, including any third-party compliance requirements are fulfilled. Then, finalizing the commercial contracts as required and acquiring resources. For example, if you rent the space, you might have to pay advance rent or deposits.
• There might be other steps involved. For example, for manpower, you might have to train them in specific skills. Similarly, there might be training required for your team to operate machinery.
• You might also need to take insurance on space or machinery.

A structured approach to resource acquisition helps organizations save time and money and ensure that the project's objectives are not negatively impacted.

Step 4:  Develop and Manage the Team

Every project will have a unique element that sets it apart from other projects. The project manager needs to ensure that after they acquire the team, which is a critical resource, they are working effectively towards achieving the project objectives. You can utilize resource management tools to help you with these activities. Following are a few critical activities to develop and manage the team effectively.

• Ensure skill gaps are filled through training or other similar initiatives.
• Set clear expectations for work, performance, and expected outcomes.
• Evaluate each individual's qualifications and skills and determine the activity assignment based on that evaluation.
• Establish an environment that is conducive to communication and collaboration. Monitor team interactions and ensure adequate and timely conflict resolution.
• Provide regular feedback on progress and areas of improvement, and reward good work. Again, techniques of performance management in HRM (Human Resource Management) can guide you in effectively managing performance.

Step 5: Continuously Evaluate Resources

It is critical to monitor the performance of each resource continuously. This continuous approach is valid for manpower, machines, and technology. For the team, providing feedback and helping them overcome any challenges helps ensure project success. Even for machines, periodic output testing, re-calibration, and preventive and corrective maintenance will ensure they continue functioning as expected through the project life cycle.

Project Resource Management Template

Here is a simple project resource management template you can use:

1. Project Information:

• Project name
• Project manager
• Start date
• End date
• Budget

2. Resource Information:

• Resource name
• Role
• Availability (hours per day/week/month)
• Skill set
• Cost per hour/day/week/month

3. Resource Allocation:

• Task or activity name
• Start date
• End date
• Resource assigned
• Hours allocated
• Total cost

4. Resource Utilization:

• Resource name
• Availability
• Utilization rate (hours worked vs. hours available)
• Total cost

5. Resource Forecasting:

• Future resource requirements
• Resource gaps
• Budget changes
• Mitigation plan

This template can be customized according to the specific needs of your project. It is important to keep the template up-to-date and use it regularly to ensure that you are effectively managing your project resources.

• Project Resource Management Template 01 – Download Excel File
• Project Resource Management Template 02 – Download Excel File

Project Resource Management Best Practices

Several best practices can be utilized by the project managers for ensuring effective project resource management. Some of the best practices include:

1. Smaller teams should take a high-level resource planning approach

In general, there is no need of a detailed resource management plan for smaller teams. Instead, project managers might want to take a high-level approach towards resource planning, focusing on key resource identification as required for the project and ensuring that the resources are available when required.

2. Larger teams should take advantage of the tools available

There would be a need of more detailed resource management plans for larger teams. Project planning tools, such as Gantt charts and resource allocation charts, can be used for effective resource management. The use of top 10 project management tools can make it easier for project managers for managing resources effectively.

3. Using a work breakdown structure (WBS)

A work breakdown structure (WBS) is a hierarchical putrefaction of the project into smaller, more manageable parts. A WBS is used for identifying the resources required for each part of the project, making it easier for effective resource management.

4. Consulting with subject matter experts to develop estimates

Estimating activity resources is a challenging process for complex projects. Consulting with subject matter experts helps project managers in developing more accurate estimates, ensuring correct identification and acquisition of resources required for each task of the project.

5. Avoiding overloading team members

Increased burnouts, reduced productivity and poor-quality work are the results of overloading team members in the project. Project managers would need to avoid overloading team members by ensuring that the workload is distributed evenly and that they have the necessary resources to completion their tasks in an effective manner.

Top Resource Management Tools for Project Managers

There are several resource management tools which can assist project managers in effective resource management, such as project resource management software. A few of the top project planning tools provide detailed insights into primary features of project resource management and several other resource planning tools help in effective management of resources.

Some of the resource management tools are listed below:

• Teamdeck.io
• Float
• Forecast  
• Smartsheet
• Mavenlink
• Harvest
• Ganttic
• ProofHub

Key Features of Project Resource Management Software

Key features of project resource management software include resource allocation charts, Gantt charts, and other resource tracking tools. Some of the other key features of project resource management software include:

1. Resource Scheduling: Resource scheduling features of a project resource management software allow project managers allocate resources to specific tasks and schedule them according to the laid project timelines. This feature helps them ensure that resources are not overallocated or underutilized, leading to delays in project completion.
2. Time Tracking: Time tracking features allow project managers to monitor the time spent on each task by team members. This information helps project managers understand how resources are being utilized and identify areas where improvements can be made.
3. Budgeting and Cost Management: Budgeting and cost management features of a project resource management tool enable project managers track their project costs, including labour, materials, and other expenses. This feature of the software helps them ensure that the project remains within budget and that resources are effectively managed.
4. Collaboration Tools: Collaboration tools enable project teams to work within themselves in an effective manner for timely delivery on projects, share information and communicate effectively. This feature of these software helps improve collaboration and team performance, leading to more successful projects.
5. Reporting and Analytics: Reporting and analytics features of these tools enable project managers to generate reports and analyse project data. This feature helps project managers identify trends, assess performance, and take data-driven decisions for improving resource management.

Overall, any basic project resource management software provides a range of tools and features which help project managers in effective resource management, allocate them efficiently, and optimize project performance. Some examples of project resource management software include Basecamp, Wrike, Monday.com, Teamwork, Smartsheet, Clarizen, Workfront, Zoho Projects, Airtable, Notion, Jira, Confluence, Asana, Trello, and Microsoft Project.

Benefits of Resource Management in Project Management

Effective project resource management provides us to benefits several benefits upon implementation. They include:

1. Identifying and Avoiding Problems: It can help us identify potential issues prior to their occurrence, permitting us to take corrective actions by avoiding delays and/or cost overruns.
2. Preventing Interdepartmental Strife: Resource conflicts can arise when inter-functioning departments or teams compete for the available resources. Effective project resource planning & management helps us prevent interdepartmental conflicts by ensuring that resources are allocated in a fair manner.
3. Avoiding Overallocation: Overallocation of resources would often lead to burnout, reduced productivity, and poor-quality work from the team members. Effective resource management can help prevent overallocation by ensuring that workload is distributed evenly and that team members have the necessary resources to complete their tasks effectively.
4. Adapting to Change: Project managers would be able to adapt to changes in the project's scope, schedule, or budget by ensuring that effective management of the resources using the project resource management tools.

Consequences of Poor Managing Resources Strategy

Poorly planned and executed resource management has consequences beyond delayed and costly projects. They impact numerous organizational dimensions. Let us explore some of the adverse outcomes of a poor resource management strategy.

1. Reduces Employee Performance

Uncertainty and lack of clarity about the requirements, the work to be done, and the schedule, prevents employees from giving their best in preparation and performance. Conversely, when resource planning and allocation are efficient, it elevates employee performance.

2. Increased Project Cost

If resource management is ineffective, it may result in a lack of resources or subpar performance, resulting in higher costs for the project. The increased costs may result from additional resources required or the money spent on retraining or repairs and maintenance.

3. High Employee Turnover

Along with reduced employee performance, inefficient resource management may lead to attrition, as employees don't find a stable growth path and clarity of expectations.

4. Delays in Meeting Deadlines

Suppose the poor resource management strategy results in the unavailability of required resources, or the skills or the performance of the resources are not up to mark. In that case, it increases the chance of delay in projects. Such an inability to meet deadlines may even result in a higher cost.

5. Loss of Business

If delays are significant, the organization might even lose business. On the other hand, if the quality of work suffers due to inefficient resource management and allocation, that may also increase the chances of losing business.

Conclusion

Project Managers should manage their projects effectively throughout the project lifecycle. Best project management practices include a strategized resource planning using project planning tool, work breakdown structures (WBS), consulting with subject matter experts (SMEs), and avoiding team overload.

This approach provides several benefits, which include identification of problems, prevention of interdepartmental strife, avoiding overallocation, and adapting to change. By effective resource management, project managers can ensure that projects are completed on time, within budget, and to the desired level of quality.

Through PRINCE2 certification training, and KnowledgeHut’s best Project Management courses, project managers are provided with a unique opportunity of enhancing their resource management skills. By enrolling in these certification prep programs courses, project managers can get detailed insights into the latest techniques and strategies used to manage resources effectively for success of a project.