What is Resource Management and Why is it Important?
Resource management is the process of matching resources to projects or initiatives. Companies use this approach to make sure they have the right people and tools available for the right projects at the right time.
The core processes involved in resource management include planning, scheduling, allocation, utilization, and forecasting.
- Planning: Identifying all of the resources that are required for a project.
- Scheduling: Assigning start dates, end dates, and time estimates for each task in the project plan.
- Allocation: Assigning specific resources to specific project tasks or work blocks and prioritizing projects based on resource availability, capacity, and skills.
- Utilization: Maximizing the use of resources and ensuring team members are as productive as possible.
- Forecasting: Predicting workload and demand to assess resource requirements before pursuing new projects or scheduling upcoming work
Companies primarily turn to resource management to increase efficiency, scale their workforce, and boost profits, but when done right, it has a lot of other benefits.
Two Ways to Get Started with Resource Management
The two main approaches to resource management are spreadsheets and software.
Spreadsheets can be a fine option for small teams that have a limited scope to manage. All it takes is an Excel or Google Sheets template to get started. But spreadsheets just don’t cut it as resource planning tools for fast-growing, mid-size, or enterprise organizations.
Several types of software, like ERPs and project management tools, offer some resource management capabilities. Most people find ERPs to be overly complicated—or much more strongly suited for finances. And project management tools often lack the full range of capabilities needed to really pay off on the promise of resource management.
So, what’s the best way for companies to manage resources?
The Role of Resource Management Software
Resource management software automates and optimizes resource planning processes so organizations can allocate resources (people, time, technology, and budget) to plans and projects at scale.
Who needs resource management software?
This solution is ideal for managed and professional services organizations—like agencies (creative, ad, marketing, digital, development, etc.), business consultancies, and architecture and engineering firms—that work on a lot of projects simultaneously.
Here are 11 signs that it might be time for you to ditch your spreadsheets in favor of software.
How does software help with resource management?
Resource management software can solve a bunch of problems. We see a lot of teams turn to this solution when they’re struggling with things like:
- Wasting lots of hours creating, manipulating, and reconciling spreadsheets
- Getting insight into operational performance across multiple teams
- Projects that constantly incur scope creep
- Missed deadlines, budgets, or project deliverables
- An inability to accurately forecast workload
- Bench bloat, staff turnover, or burnout
All of these problems ultimately eat away at profitability. The good news is that they can be solved with the right tools.
What are the benefits of resource management software?
Implementing resource management software can be a real game changer for organizations. Teams gain a breadth of benefits, many of which, directly or indirectly, increase profitability.
Here are eight advantages of using resource management software.
- Planning optimization: Plan work and projects faster by creating templates, cloning past projects, and quickly updating dependent timelines. Work that used to take hours can literally be done in minutes.
- Transparency: Software gives leaders visibility across the entire organization so they can see who is working on what and when—and stop fighting over resources and priorities.
- Operational efficiency: Organizational insights arm you with the data you need to better manage and optimize operations. You can more purposefully divvy up work and allocate people to projects. And team members can more easily pass the baton between each other.
- Increase utilization: Most companies that bill by the hour average a 60% utilization rate. Resource management software helps maximize utilization. Even modest gains can lead to big boosts in profit.
- Inform headcount planning: Switch to a proactive, not reactive hiring strategy. Software makes it easy to compare upcoming project requirements against your teams’ capacities and skills so you can determine if people can help from across the org or if you need to hire, for what roles, and when.
- Eliminate burnout: Burnout is the result of prolonged, excessive work demand. Resource management software makes it easy for project managers and team leaders to balance demand with individual capacity so no one has too much on their plate.
We hosted a webinar on this exact topic, outlining 5 steps for balancing team workload and avoiding burnout. Watch it on demand here.
- Improve customer experience: Smarter planning and more efficient execution lead to projects being completed on time and on budget—two outcomes that result in happier customers.
- Increase retention: When customers are satisfied and employees feel balanced and productive, they tend to stick around longer. Resource management software can reduce customer churn and employee turnover.
What features does resource management software include?
There are more than 50 software solutions that categorize themselves as resource management software. While some deliver unique capabilities, there are core features that pretty much all of them include.
- Project planning: Plan projects down to the task level, or integrate with other project management tools. Some of the more robust resource management software have a full suite of project management tools baked in.
- Time and budget tracking: Track the total time per project, task, and subtask. Monitor time and budget in real time to keep projects on track. And compare estimates to actuals to inform future project scope.
- Forecasting: Identify how many staff members and which skills are needed for a particular project or time period. The most powerful resource management software will empower you to plan ahead for next quarter and beyond.
- Scheduling/allocation: Quickly assign staff to projects and plans while accounting for variables like availability, vacations or absences, location, workload, and skills.
- Capacity/workload management: See how much work is assigned to each team member so you can increase utilization without causing burnout.
- Performance reporting: Get a clear picture of how team members are performing. Leaders can use these reports to run smarter organizations and enable more productive teams.
Beyond these standard features, there are some other must-have capabilities that we recommend to anyone considering resource management software.
Choosing the Best Resource Management Software for Your Business
Before you buy or license any software, it’s always a good idea to start by building your own unique business case. List out all of the:
- Problems you’re trying to solve
- Requirements you think you need
- What future state you’re trying to achieve
There are a few lesser known factors that can make or break your success with resource management software.
- Integrations with existing systems: You’ll want to choose a solution that can connect with your existing project management, CRM, HR, and ERP or accounting systems so you can centralize all your data in one place.
- AI-driven optimizations: Software should get smarter over time, using historical data to deliver predictive intelligence.
- Big picture planning: It’s important to be able to allocate resources allocation based on work plans, not just tasks.
- Easy to implement, learn, and use: To reap the full benefits of software, everyone needs to use it. The easier it is to learn and use, the more widely adopted it will be. Look for a system that’s designed for the user and has accessible customer support.
- Guaranteed ROI: This is a biggie. You want to be assured it will pay off. Not many software companies can guarantee customers will see a positive ROI. Those who do always go to the top of our list.
Choosing a tool that meets all your requirements, connects with your current systems, is easy to use, and delivers a few enhanced capabilities will set your organization up to scale.
Mosaic is an AI-powered, web-based resource management software that’s guaranteed to dramatically improve your productivity and profitability. In just one year of using Mosaic, a company of 100 people will save 4,000 hours and make an extra $1,230,000.
Calculate your ROI or schedule a free demo of Mosaic today.