What Is Resource Management, and Why Does It Matter?

Responsible resource management is one of the best ways to prevent project failures. It ensures you have the right resources in the right quantities at the right time.

So, what is resource management? In simple terms, it encompasses all planning and scheduling related to people, technology, and capital. Such a broad topic may seem intimidating, but we can make it easier to digest. Soon, you’ll be a master of resource management techniques.

Why is resource management important?

Resource management is fundamental to any organization’s success. It ensures you execute projects and programs with efficiency.

You might finish ahead of schedule if you allocate excessive resources to a project, but some of those resources will likely go to waste. If you hire five team members when you only need three, they may not have enough work to do, but you still have to pay their salaries.

On the flip side, insufficient resource allocation is also a problem. If you hire three team members when you really need five, your team may need extra time to complete assigned tasks, which results in delays and potential burnout. If you can’t extend the project timeline, you may have to reduce the project’s scope or make other concessions. If you run out of capital, you may have to abandon the project entirely.

Resource management offers the following benefits:

• Increased efficiency: An efficient operation maximizes productivity while minimizing waste. With effective resource management tools, you can reduce labor costs, physical space requirements, and time spent without sacrificing output.
• Improved agility: Agile companies are skilled at recognizing and adapting to changes in the business environment. Resource planning helps you pivot when the project or market conditions change, improving adaptability across your organization.
• Better morale: When employees don't have adequate resources, they may struggle to meet performance goals. Insufficient resources can also cause conflict between departments, reducing company-wide morale. Resource management ensures all employees have access to the right resources at the right time, eliminating a source of conflict and strengthening internal relationships.
• Enhanced decision-making capabilities: Information is one of the most valuable resources for any business. Resource management ensures team members have up-to-date information about everything from project costs to labor needs, enabling them to make better decisions.
• Increased consistency: Without resource management, it's challenging to create staff schedules, order supplies, and perform other managerial tasks. Resource management increases consistency by making it easier to anticipate your company's needs.

Top techniques for resource management

To fully enjoy its benefits, you need the proper resource management techniques. Most companies use three types of resource management: forecasting, allocation, and leveling.

Forecasting

With resource forecasting, you can estimate your resource requirements before you start a new project. To create an accurate forecast, you must understand the project’s scope and fully grasp your company’s goals. If your business has completed similar projects before, it's helpful to review historical data and refresh your memory about any resource-related challenges you've already encountered.

Allocation

Resource allocation focuses on maximizing efficiency with the resources you already have at your disposal. A primary goal of allocation is ensuring you have the right people for the job. The process starts with a careful review of each team member's knowledge and skills. Once you understand the capabilities of each employee, you can begin assigning tasks that best suit them.

Leveling

Resource leveling identifies inefficiently utilized resources. Once you identify those resources, you can update your project plan accordingly. For example, you may learn that a team member on Project A has a professional certification relevant to Project B, prompting you to reassign them where they are most needed. Used appropriately, leveling helps you avoid spending money on independent contractors or consultants.

4 stages of resource management

Once you know which resource management skills you need, it's vital to understand the standard order of the process. 

1. Planning

In the planning stage, you establish your requirements and determine what resources you need to achieve your goals. During this stage, you also define the project’s scope, identify any relevant constraints, and create a schedule of tasks.

2. Mobilizing

Once you have a plan, it's time to mobilize your resources. As the project progresses, you may have to make some changes. For example, if your supply costs outpace estimates due to inflation, you may have to revise the project budget. You may also identify new or underused resources while mobilizing, allowing you to update the project schedule or reassign team members.

3. Managing

To complete projects on time and under budget, you must keep track of team members, their assignments, and their schedules. It's also essential to identify potential challenges. Therefore, the management stage is all about defining team roles, promoting effective communication, and supporting an environment of collaboration.

4. Monitoring

Finally, you must monitor resource usage. This ensures you don't exhaust critical resources when you need them the most. Close monitoring also highlights areas for improvement and optimized allocation.

Common resource management challenges

Resource management is advantageous for organizations of all sizes, but it comes with challenges. Here are some typical obstacles on the road to efficient resource management:

• Poor resource visibility: For a project to succeed, decision-makers need to know who's available and how much capacity they have for additional tasks. They must also have a clear picture of their supply chain to make informed choices. Unfortunately, some businesses rely on outdated information systems. You can avoid some of these hurdles with an enterprise resource planning system.
• Communication problems: You can't manage resources effectively without well-organized correspondence. However, it's common for organizations to experience growing pains when they first employ advanced resource management techniques. Avoid misunderstandings by providing regular training and establishing an organizational culture that promotes communication.
• Difficulty prioritizing tasks: Team members typically work on more than one task at a time. Some may struggle to prioritize tasks appropriately, leading to costly delays. To avoid this problem, invest in software that clearly displays which team members need help and which ones have the capacity to take on additional tasks.
• Scalability: Rapidly growing companies may have difficulty choosing resource management techniques that are still relevant by the time the project ends. Software, mobile apps, and other resource management tools help scale your management capabilities alongside your workload.

Make your projects more successful with Orderful

By strategically allocating and utilizing resources, you can enhance efficiency and productivity. You'll also be well-positioned to grow your organization.

Orderful offers a cloud-based EDI platform with modern APIs, making it easy to gather information about project resources and enhance communication among team members. Contact us to speak to an EDI expert and discover how Orderful’s EDI solutions can boost your company’s productivity.