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How to Manage Resources in Projects, Programs, and Portfolios

You’re not going to be able to achieve much in life, or work, without resources. Whether it’s food and shelter, or people and technology, resources are at the heart of everything we do. And if we are going to achieve the best possible outcomes with those resources we need to manage them effectively. But what does that mean? What are the challenges of resource management and how can they be overcome? Those questions and many more are going to be addressed in this guide. Let’s start with the most obvious question.

What is resource management?

In the context of a project, resource management is the identification of resource availability and needs, both now and in the future; the planning of how best to use those resources, the allocation of resources to areas of need, and the management of those resources to optimize performance. Resources may include people (employees, contractors and vendors), money, technology or other elements that are required to deliver projects and related work.

In the context of an organization, the same concepts apply, except that resource management must also occur at a strategic level and span all resources in all business areas. It must also address resourcing needs over the next several business cycles. Organizations, and projects need a comprehensive resource management plan that supports the needs of the work.

Why is resource management so difficult?

Organizations have been trying to solve their resource management problems for years, if not decades. And they really haven’t been able to do it consistently. Whether it’s the fundamental problem of not being able to reliably predict resource needs, not being able to address those needs, or not understanding why actual work varies from forecasts, organizations just haven’t been able to figure it out.

Resource capacity planning is just one of the many capabilities organizations need to more effectively manage resources.

Agile transformations were touted as a way to improve resource management by enabling more consistent allocations, creating stable teams, and reducing the variability of resource allocations. But it hasn’t quite worked out that way. There are still too many situations where the right number of the right people aren’t in the right place at the right time with the right skills and information.

To be fair, the goal posts are constantly shifting. Organizations have gone from desktop project management tools to enterprise tools to a plethora of web-based tools that are virtually impossible to centrally manage and consolidate. Resourcing models have gone from offshoring to onshoring, to outsourcing to a combination of approaches that is continuously evolving. And of course execution methods have gone from one, to two, to multiple.

But the fundamental reason why resource management is so difficult for many organizations, is simply that they’re doing it wrong. They’re using the wrong resource management approach, the wrong resource allocation models and inefficient and ineffective resource forecasting. Additionally, they aren’t empowering resource managers, they aren’t giving enough consideration to resource availability, and they are relying on the wrong resource management software solutions. In fact a lot of the time they are using spreadsheets to try and manage resources – with predictable results.

If that weren’t enough, they’re also focusing resource management efforts on only a subset of their work – on the project and project-like approaches to discretionary investments. But there is only one resource pool – the employee base and supplementary external resources. And that pool has to support everything the organization does.

To be successful, organizations must drive their resource management – just like every other element of their Strategic Portfolio Management, from the top of the enterprise, down into the execution layers. At UMT360 we believe that strategy should drive everything, that organizations should start with strategic portfolio management to plan, fund and govern all investments and then deliver the work that generates the value from those investments in any way that they see fit. That means multiple work structures and any of the tri-modal realities.

It’s critical that organizations have the right tools to structure resource management effectively – and support each of the other strategic imperatives in a way that works – consistently, effectively, and efficiently, to help overcome the various challenges of resource management. Those challenges include planning and executing across multiple delivery tools and multiple approaches to work. This all makes it difficult to get a single clear and accurate picture of your resources, which is why having a hub to provide a complete picture is so important.

Why is resource management important?

Resources are not only an organization’s most expensive asset, they’re also the most important. You can’t achieve anything unless you have the right people in the right place at the right time doing the right things in the right way. And unless those people – individually and collectively, feel engaged, empowered and motivated, you’ll never be able to get the best from them. Ineffective resource management impacts the people being managed, and the ability of the organization to deliver.

That results in value being left on the table – organizations simply can’t generate the return on their investments that would be possible with a more strategic, integrated and effective resource management approach. That’s as much a waste of investment funds as is pursuing the wrong strategy, failing to develop the right solutions, or accepting inefficient operations. None of which would be considered acceptable.

Worse, the impacts of ineffective resource management are longer lasting than most of those other issues. Over-utilized employees will quickly become disillusioned and disengaged. That has the potential to impact their contribution long after the over-allocation has been resolved, and at the extreme can drive employees away while making it harder to attract suitable replacements.

Think about the causes of problems on your own projects and programs. How many of those issues can be traced back to resourcing bottlenecks, to skills deficiencies, to conflicting demands? Likely a good percentage of them, and that is the bottom line about why resource management matters. A resource management plan won’t solve those problems on its own, but a comprehensive and strategic approach to resource management will go a long way towards driving success.

Four steps to mastering resource management

So how do you deliver the best possible resource management consistently? What are the keys to building an environment designed to succeed? We have identified four areas where we consistently see organizations struggle and have recommendations to address each of them:

  1. Standardizing the resource pool and defining capacity
  2. Consolidating and gaining visibility across all demand
  3. Optimizing resource acquisition and allocation
  4. Enabling portfolio managers to easily run what-if capacity planning analysis
The key to effective resource management is having both the right processes and the right tools to support them.

Let’s look at each of those in turn and explore not just why things go wrong, but what an effective model should look like.

1. Standardizing the resource pool and defining capacity

The first step in ensuring that resource management is effective is the standardization of the resource pool. An organization needs a single, enterprise level resource pool that contains everyone – employees and contractors across all roles and functions. That enterprise level resource pool must be integrated with other systems to ensure it remains complete, accurate and current. That will require integrations with HR systems and with access control systems like Active Directory or similar.

It’s critical to define primary roles, skills and team membership to help search for right resources and support different allocation techniques.

More than just containing the name of the individual, there must be a standard set of metadata associated with every individual in the pool – information supplied and maintained through systems integrations that allows for reporting and analysis of the members of the resource pool. That list will include, but is not limited to, roles, skills, licenses, location, cost center, functional manager, internal vs. external, etc.

The resource pool should also identify a number of distinct resource types:

  • Named resources
  • Generic, role based resources
  • Dedicated teams

Named resources

Named resources (eg analysts, programmers, engineers, developers, etc.) typically form the bulk of the resource pool. The ability to identify the specific type of resource by name is a critical capability for any effective resource management.

Generic, role-based resources

The ability to identify and assign generic roles is essential in order to capture role-based demand without actually assigning that role to a specific individual.

Dedicated team resources

Primarily found in an Agile-based resourcing model, this is likely the most confusing of the three. In most work structures, resources are assigned on an individual basis – one person is assigned to a task, project, etc. with only limited consideration of who else is assigned to the work. Additionally, that individual may also be allocated to two or more different work elements depending on how much of their time is needed, with their total availability split across those elements.

However, in Agile work, it’s common to have permanent (or at least, semi-permanent) dedicated teams. In this model, a group of individuals remains allocated to a work element, always staying together and assigned collectively for all or part of their time. That relationship needs to be captured distinctly as it impacts availability and is a larger block of effort that needs to be allocated effectively and efficiently.

Any resource management process should start with the ability to standardize your resource pool & define capacity.

Within the resource pool it is critical to define capacity. That must occur at the macro level – the total number of resources available; at interim levels – capacity by skill set, role, etc.; and at individual levels. Capacity must consider all of the variables that impact availability – statutory holidays, regional calendar variances, reduced or flexible working hours, etc.

Once the integrated enterprise resource pool is in place, and capacity is defined, organizations have a solid foundation to consider the other elements of effective resource management.

2. Consolidating and gaining visibility across all demand

One of the biggest barriers to optimizing the management of resources is the inability of organizations to capture and consolidate demand for their resources into a single place. There must be a central hub for all project demand – as well as non-project demand. That is the only way that organizations can maintain an accurate picture of what people are working on collectively and individually, and we can’t assess the upcoming demands on those resources.

Consolidating and providing visibility is key to helping all stakeholders estimate and reforecast resource demand.

This can cause problems across all areas of the organization as a single individual may have demands on their time from multiple systems – operational support, project delivery, and so on. Frequently project managers or functional managers only have access to a subset of those systems, giving them an incomplete and inaccurate view of resource demand and availability. To try and address that they revert to tracking their resources in spreadsheets, making it incredibly difficult to maintain an accurate view and wasting time and effort in the process. All while potentially driving bad decisions based on that inaccurate perspective.

In today’s world things change quickly. So it’s not enough to simply capture current demand, organizations also have to be able to re-forecast quickly and easily throughout delivery windows as circumstances change. This resource forecasting must not only consider demand, but also the fluidity of that demand in an ever evolving world, and it must be achieved with minimal disruption and total confidence that information is complete, accurate and timely.

A robust resource management process should empower resource managers to manage team commitments & availability

There will be shifts in demand during the duration of a project, program, product or other way of structuring work. Depending on skills and availability, changes in resource demand can be difficult, time consuming and expensive to respond to. So it is critical that there is as much advance insight into the evolution of resource demand as possible, supporting accurate resource forecasting and allowing the best responses to be implemented.

That ability to forecast resource demand must be capable of being applied across all work structures. Traditional project approaches will request a specific role or skill set, perhaps even a named individual. But Agile delivery through dedicated teams need to be able to forecast demand at that team level, not just by individual.

Finally, demand management tools must consider, and accurately capture, non-project related demand. That may be operational or support work, but it will also include administrative overhead that is unavoidable and that impacts true availability across the entire organization.

3. Optimizing resource acquisition and allocation

One of the keys to effective resource management is the ability for resource managers to have accurate and complete insight into their people. To optimize the performance of their team, a resource manager needs an intuitive portal to quickly gauge and understand the availability of each individual, the work they are assigned to, and how the demand on their time is set to evolve. This is more complex than it might appear.

Empowering resource managers to manage team commitments & availability is key to optimizing resource utilization.

Firstly, organizations utilize many different approaches to allocating resources. We considered above the different types of resources that have to be dealt with – specific named individuals, roles and teams. All of these have to be considered, and individuals only exist once so if they are treated as a generic role and as part of a dedicated team in addition to work assigned directly to them as a named individual, well, there are going to be problems.

Secondly, consider that resource allocation occurs in multiple different ways. Some will come through formal resource management tools, integrated with the organization’s strategic portfolio management solution. But some will come via email, in instant messaging apps, or even in hallway conversations. All of these impact resource assignments and availability.

Next consider that planned, committed and actual demand are all different. Planned demand is the initial expectation of which resources will be required and for how long. It’s based on preliminary planning estimates and is almost certain to be inaccurate. Committed demand is the firming up of those estimates that results in the actual allocation of an individual or team to a piece of work for a defined period of time. And actual demand is the amount of time that the person or team actually uses to complete the work assigned to them. It’s not used for planning purposes because it’s retroactive, but it’s still an impact on resource management (more on that later).

Whether resource managers work on the basis of availability being capacity less planned demand, or capacity less committed demand (which is the preferable approach), there needs to be confidence in the numbers they’re working with and visibility into where resource assignments are occurring. Unless there is clarity around availability it is very difficult to effectively respond to requests to adjust allocations. Resource managers are continuously asked to adjust commitments as projects and related work allocations learn more about what is actually needed, as circumstances change and as work shifts from planned to completed. They need to be able to respond, confident that those adjustments are the right ones for their teams, and for the work that is being undertaken, and that they can be accommodated within the resource utilization and availability on their teams.

To be effective, a resource manager also need to be able to view allocation and assignment information from the perspective of their team and the individuals within it. That is, they don’t want to have to try and manage resources based on a project first view of allocations; they need to be able to manage based on a resource first view with all assignments rolling up under the individual regardless of where the work is (or what system it’s being managed in).

A resource manager also needs a clear view of individual resource allocation vs. team based allocation. In an individual model there is likely more flexibility – as long as the right combination of role / skills / experience is found, the individual doesn’t matter as much. But with team based resource allocation, an entire team is assigned to a piece of work for a percentage of their time. There is less flexibility for a resource manager to control the assignment and greater potential impact on other work areas. It is therefore critical that the resource manager has the ability to ensure they are making the best possible allocations and driving optimal resource utilization.

4. Enabling portfolio managers to easily run what-if capacity planning analysis

For portfolio managers, the key resourcing challenge that needs to be overcome is the ability to easily review total capacity, current and forecast availability across the entire enterprise. Portfolio managers, along with product managers and organizational executives need to be able to identify where over- and under-allocations are occurring so they can address bottlenecks and leverage resourcing opportunities to improve performance.

The ability to model common scenarios is a critical to understanding the impact on resource availability.

At the same time, portfolio managers must be able to quickly and easily run what-if scenarios to understand the impact of resource availability and capacity of various portfolio models and proposed adjustments to investment funding plans. This is critically important in today’s world where plans are constantly evolving in response to shifting opportunities and threats.

Portfolio managers must have access to all of the tools in their arsenal – accelerating, slowing or rescheduling work, adding new initiatives, cancelling work that is no longer aligned, and so on. But to be confident that they are making the right decisions; and that their decisions are capable of being delivered; there must be the ability to analyze resources to understand how resource allocation will be impacted, where bottlenecks will be created and alleviated, how overall and role / skill / team specific capacity will change, and so on.

Comprehensive resource management and capacity planning helps the organization consolidate & gain visibility across all demand.

To achieve this level on analysis and understanding, and to do it with the confidence that the information being presented is accurate, requires more than simply accurate resource data. It requires best of breed strategic portfolio management solutions where resource management is a tightly integrated element that is built into the overall strategic portfolio management approach.

Resource management and time reporting

Like death, and taxes, time reporting is one of those certainties in life. And while no one likes having to do it, it’s an important part of the resource management process. Time reporting represents the ‘actuals’ of resource management – the time and effort actually spent vs. what was planned. This provides additional information on utilization and leads to improvements in estimation. In addition, time capture and reporting drives a number of financial considerations from capitalization, tax incentive tracking and contractor invoicing.

Today’s tri-modal reality makes it all the more important to have an integrated time reporting and management capability. With work being done in disparate ways, and with that work being managed across multiple execution systems, there must be a centralized, integrated capability at the strategic portfolio management level that allows for the consolidation of information and the harmonizing of availability and utilization across all work structures and approaches.

If it’s important to ensure that the capturing of time and the reporting of that data is effective, it’s also critically important to ensure it’s efficient. The days of manually entering time should be behind organizations. If they’re not then they are still operating in a way that is too reliant on manual tools and processes. Time capture should be handled by the various work execution tools that operate as part of an organization’s adaptive project management layer. This is the category of tools that exists downstream of strategic portfolio management and handles work in all structures and across the tri-modal reality as part of project portfolio management. We’ll look more at the software solutions below.

Resources are too valuable to have to manually manage time entry, and manual entry is unreliable compared to automated capturing of information based on work completed and effort expended. That information must be consolidated and fed back to the enterprise resource pool for reporting and analysis.

Resource management in Agile

We’ve mentioned a few times in this guide that resource management in Agile environments requires special consideration. The team based resourcing model effectively creates a larger unit of allocation for resourcing, changing the management process. While block allocation of resourcing may simplify things, it has the potential to reduce resourcing flexibility, and may result in the need for teams to be assigned to multiple work items in parallel with each task receiving a percentage of available time. That in turn can introduce inefficiency if not managed effectively as resources have to adjust and shift to different work elements throughout the working day or week.

Another evolution that is impacting resource management in Agile is the shift from projects to products. This is resulting in the creation of permanent teams that remain intact and assigned to the same piece of work for as long as the organization is obtaining relevant value from that work. In some ways this makes resource management easier because it becomes more predictable. But it can again reduce flexibility around assignments and availability.

Agile transformations were promised to make resource management simpler and more straightforward by moving everyone to a team based model. But the simple reality is that work will continue to be delivered across the tri-modal reality and the only way to effectively manage resources at an enterprise model is to embrace those different ways of working – and different way of allocating work. Organizations must embrace resource management by named resource, by role, and by team in parallel.

Resource management tools and software

Resource management is an important component of strategic portfolio management, but the tools most organizations currently use don’t even begin to scratch the surface of a robust and dedicated resource management solution.

Using spreadsheets to manage resources

Resource management in many organizations is nothing more than spreadsheets used to track allocations and availability. But the manual, stand-alone nature of this approach means it is simply not capable of doing the job, consuming massive amounts of valuable time that could be better spent delivering value. Organizations ultimately need better tools that deliver more robust resource management functionality.

Resource management integrated with adaptive project management

Most adaptive project management platforms are execution-oriented and lack robust resource management capabilities. Organizations looking for ways to augment those tools with resource management need to ensure tight integration – especially the scheduling and prioritization of work being delivered using any project structure and all of the tri-modal realities.

To effectively integrate with adaptive project management, resource management tools must capture information from project managers and teams, update forecasts, report on bottlenecks and upcoming issues, etc. And they must provide resource managers with the updated information on current and upcoming availability to support decisions around which resources to allocate.

These tools must also integrate with HR systems which should act as the source of master resource data including absences, start and end dates, etc. and also with project financial management tools for the tracking of costs and potentially invoicing for contract and vendor resources.

Resource management within strategic portfolio management

Optimally, resource management capabilities are part of a comprehensive strategic portfolio management solution, rather than as a standalone resource management solution. Strategic portfolio management is where investment planning occurs, strategic prioritization takes place and initiatives are funded. It is critical that the other components of strategic portfolio management be able to leverage resource capacity planning and the resource elements of what-if analysis to ensure that the right decisions are going to be made.

Resource management is a key to business agility

Resource management is critical to the success of any organization. Unless it is mastered, the ability to deliver on strategic initiatives will be severely compromised and the organization will continue to waste their most valuable, and expensive, resource – its people.

But resource management is just one of a number of disciplines that organizations must master if they are to deliver effective strategic portfolio management, and there must be a focus on each of those elements if sustainable, optimized performance is to be achieved.

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