Jory MacKay on October 24, 2023 Resource allocation 101: How to manage your team’s resources
Ask a hundred project managers what one of their biggest sources of frustration is and at least half will tell you some variation of the same theme: resource allocation. Whether it’s people, raw materials, or cold hard cash, projects can’t function without resources. And often, there aren’t enough to go around.
To bridge the gap, you need to find a way to make your resources go further.
Resource allocation is the process of identifying, analyzing, and strategically deploying your resources to maximize your chances of project success.
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If you’re dealing with limited resources or stepping up to a larger project that requires more resources than you’ve dealt with in the past, this guide is for you. Below, we cover everything you need to know about resource allocation — from what it is to how it impacts your projects and the best ways to squeeze the most out of your available resources.
What is resource allocation? How does it impact your project’s success?
Resource allocation is the process of identifying, analyzing, and strategically deploying resources efficiently to maximize your chances of project success.
Resources don’t just refer to the people on your project team, though. There are many different types of resources to consider, including:
- Labor e.g., individuals, teams, and departments
- Cash e.g., budget and credit
- Time
- Materials e.g., wood, metal, cloth, and water
- Space e.g., shop-floor space
- Energy e.g., electricity and petrol
- Hardware and software e.g., laptops and project management software
- Real estate e.g., offices, warehouses, and factories
- Processes e.g., a call center process
- Intellectual property e.g., a product patent
Resources are a crucial part of the project management process because, without them, you won’t be able to deliver your project objectives.
For example, let’s imagine you’re building a house. A key resource that you’ll need is bricks. But you can’t have just any old bricks — you need the right size, shape, and material of bricks for the house you’re building. You also can’t have bricks lying around for months, so you need them delivered at just the right time.
If you get the wrong type of bricks, the scope and quality of your house will be wrong. If the bricks are delivered late, your project will be delayed. If the bricks are in high demand, the manufacturer might raise the price, causing you to exceed your budget.
As you can see, resource management is full of pitfalls. In fact, a 2022 poll found that 53% of companies cited resource management as their biggest project management challenge, beating out other pain points such as misaligned strategy and resistance to change.
How do resources impact your project’s success?
While we’ve already briefly touched on it, it’s important to reiterate that resource management goes hand in hand with other project controls, such as scope, quality, and cost management.
But what might influence your decision to allocate resources?
Let’s look at some key factors that influence how you’ll choose where to allocate resources within your project:
- Project goals & objectives. First and foremost, you’ll want to allocate resources to give you the best chance of meeting your project goals and objectives. This is where you must watch out for competing priorities from other projects and ensure your resources remain solely focused on your objectives.
- Scope. Underpinning your goals and objectives is your project’s scope. Where many project managers get caught out is by succumbing to scope creep. This means their resources are wasted on non-value-adding tasks, and ultimately, they go on to deliver the wrong things.
- Timeline. Once resources are working on the right things, the next largest factor to consider is the project timeline. Resources should be allocated to items that contribute directly to your project’s critical path. Allocate resources to non-critical items, and you’re at risk of missing your deadlines.
- Risk. When allocating your resources, it’s good practice to also consider how your resources can mitigate critical risks. If you allocate resources to risks early, it can save you from having to fight a crisis later on.
- Quality. More senior, expensive, and advanced resources typically lead to higher-quality outcomes. When allocating people to your project, think about the level of quality you need from the task. Get this wrong, and you risk your project quality being too low or your project costs being too high.
- Cost. Talking of cost, when you’re allocating resources, you need to make sure you’re managing your budget too. Deploy too many resources too soon, and you’ll quickly run out of money and won’t have the funds to finish what you started.
- Stakeholder expectations. This is a controversial one, but you may choose to allocate resources based on what your stakeholders expect. This can be positive as it helps build stakeholder confidence and project buy-in. On the other hand, if stakeholders can’t see the bigger picture, it may lead to problems and conflicts further down the line.
The hardest part of resource allocation is balancing all of the above factors to use your resources most efficiently. There’s never a situation where all factors will align, so you must work with your stakeholders to manage the trade-offs.
Watch out for competing priorities from other projects and ensure your resources remain solely focused on your project’s objectives.
For example, if your project sponsor mandates high-quality deliverables, there’s a good chance the project will need more expensive resources. Or, if your project budget is suddenly reduced, you may need to cut back on resources by consolidating your scope.
How to properly allocate resources on your next project
Now that we know what resource allocation is and how important it is for project success, it’s time to arm you with the tools and techniques to actually do it!
Here’s a 6-step guide that’ll take you all the way from the A to Z of resource allocation.
Step 1: Define your project requirements
There’s no point jumping into resource allocation before you’ve done the basics of setting up a project. Once you’ve identified your project’s objectives, scope, and deliverables, it’s time to break the deliverables down into individual requirements.
As you define your project’s requirements, you’ll get a view of the work to be completed. This is crucial, as without understanding the work, you can’t begin to plan the resources you’ll need.
Actionable steps to take:
- If you’re early on in your project, start breaking your deliverables down into requirements by hosting a requirements-gathering workshop. If you’re in a more mature organization, you may bring a Business Analyst on board to help.
- We’d recommend creating a project or Product Requirements Document to capture these requirements. This is one of the most important documents in your project, as it lays out what’s needed to deliver your objectives.
Real-world example:
Rowan works for BrainTech, a health company specializing in mobile apps that help improve users’ memory. Rowan needs to create four new app features for young people with dementia. To understand the work required, Rowan hosts a requirements workshop with IT and Customer Success team members.
Step 2: Estimate the work and identify the resources required
The next step is to convert those requirements into tasks for the team.
To do this, you must get good at estimating projects, using techniques such as reference class forecasting, 3-point estimations, or agile estimation techniques such as planning poker or t-shirt sizing.
Once the requirements are broken into tasks, you can build a picture of the resources you’ll need for your project. Don’t make the mistake of just considering people resources here, consider other resource types such as fuel, real estate, and IT software, too.
Actionable steps to take:
- Start by reading the Planio Guide to Estimating Projects. Here you’ll find many tips to help you estimate project tasks, including five key questions to improve your accuracy.
- Remember that not all tasks are born equal. When identifying tasks, consider the priority and which ones must be completed first.
- The best way to start matching resources to tasks is to ask, “What or who do we need to get this done?” To answer this, it’s best to utilize the experience of project managers or subject matter experts that have worked on a similar project before
Real-world example:
Rowan identifies three tasks in the app project: UX design, code development, and feature testing. Rowan speaks with Jack, an experienced project manager, about the UX design task. Jack and Rowan estimate he’ll need five days of time from a Graphic Designer and access to Graphix, the company’s design tool.
Step 3: Consider quality and budget to request the right resource level
At this stage, inexperienced project managers rush to pick up the first resources they see. Instead, we’d recommend taking a breath and considering your project’s quality and budget restraints. But why is this important for resource allocation?
Your project’s quality requirements directly impact the standard of resources you need.
For example, if you’re creating a complex web app, you’ll need senior, not junior, developers. But, if you’re building a budget garden office, you could get away with low-quality, easy-to-find wood.
High quality resources come with high costs. So, ask yourself, can you afford those higher costs? Quality must be weighed against budget to ensure your resources tick all the boxes, so consider everything in the round.
Inexperienced project managers rush to pick up the first resources they see. Don’t make the same mistake.
Actionable steps to take:
- Research the different levels of resources available to you. For people resources, compare the skills and experience levels of junior and senior team members. For materials, compare reviews and product specifications of budget and premium options.
- If you’re struggling to balance the trade-offs, try reading our guide on the Project Management Triple Constraint. It has some great tips to help you consider all angles of project management and take the right approach for your product.
Real-world example:
Rowan considers the seniority of the graphic designer he needs. Having researched the market, Rowan realizes a senior designer will be too expensive, even though the design will be pretty complex. To compensate, Rowan will buddy his junior designer with a Business Analyst to provide support where required.
Step 4: Communicate your resource needs
In most organizations, the next hurdle is getting the necessary resources through the door. There will be a request process to adhere to, likely through a Resourcing Manager for new team members or through Procurement for physical items.
Actionable steps to take:
- Building relationships with the right people is the key to getting the best resources. We’d recommend our guide to Project Stakeholder Management to help you build relationships that help you get the resources you need.
- Understand the processes within your organization for getting resources. If you’re part of a more mature department, this may mean speaking to the Project Management Office (PMO) or contacting external suppliers.
Real-world example:
Rowan contacts BrainTech’s resourcing lead to request a junior graphic designer. Shamila, a graphic designer with two years of experience, will be free in two weeks, which aligns with Rowan’s timelines. Rowan arranges a coffee with Shamila before she starts to get to know her and begin building a relationship.
Step 5: Onboard resources and assign them to tasks with a resource allocation plan
Once your resources are confirmed, it’s time to start onboarding them to the project and formally allocating them to the correct work items.
For people resources, this means briefing them on the project’s objectives, meeting the team, and providing them with the tools they need for the job. For other resource types, such as IT hardware, this means ordering and arranging delivery at the correct time.
Actionable steps to take:
This is the point in your project where a project management tool, such as Planio, will make your life easier.
Planio provides one easy-to-use platform to manage and track your team’s progress and your projects, ensuring all your tasks are assigned and everyone has exactly what you need to progress.
Once you start working on a project, you’ll be able to use time tracking and task management features to check in and make sure your resources are being used efficiently. As an added bonus, everyone on your team will get clear visibility into what’s being done and how their work is contributing to the final product!
Real-world example:
Rowan arranges Shamila’s access to Graphix so she can get started immediately. On Samila’s first day, Rowan runs her through the project’s background, the tasks she will complete, and the stakeholders’ expectations. He assigns her the relevant cards in the project management tool to help keep Shamila’s work in one place.
Step 6: Monitor progress, adapting and optimizing as you go
At this point, you might be tempted to pat yourself on the back for a job well done. In reality, this is where resource allocation gets especially tough, with your best-laid plans guaranteed to come unstuck.
Tasks could take longer than estimated, team members may get sick, deliveries are often late, and other business priorities may take your resources away.
That’s why you must be on the ball, working tirelessly with your team to manage busy workloads, adapting to changes, and re-allocating your resources.
Actionable steps to take:
- Schedule regular one-to-one meetings with team members to stay informed on their progress and manage any concerns. This will help you catch project risks before they turn into issues.
- Returning to your project management tool, features such as Gantt Charts can help you visualize project progress and identify when things may go wrong. If you don’t have a PM tool, you can always create a simple Gantt Chart using Excel too.
Real-world example:
Rowan has a meeting with Shamila every morning to check her progress and give her a chance to ask any questions. Rowan notices Shamila is progressing slowly as the design is more complicated than first estimated. He arranges for Shamila to work an extra two days to complete the work, updating his project plan and budget accordingly.
The 4 biggest mistakes project managers make with resource allocation
Resource allocation is hard work, but you can make it easier by avoiding mistakes that inexperienced project managers often make.
Here are the top four to watch out for and measures you can implement to avoid them happening to you.
- Rushing into allocating resources. Because resources can be hard to access, many project managers rush to secure them before understanding the work required. But this can backfire as you’ll often be paying for something you don’t need. To avoid this, take the time upfront to understand your project requirements fully.
- Not planning ahead. In most instances, there aren’t enough resources to go around. If you don’t plan, you won’t have the resources you need to do the job. To avoid this, start planning early and build relationships with people who can get you the required resources.
- Poor resource communication. When you have a resource in place, you must ensure you get the most out of them. Whether it’s a people resource or working with stakeholders to secure physical resources, a lack of communication causes confusion. To avoid this, use techniques such as asynchronous communication to keep everyone talking and working at their best.
- Not spotting scope creep. Resource waste is a big problem for many organizations. Most of the time, this comes down to scope creep, with teams working on things they don’t actually need to do. To avoid this, understand the difference between scope change and scope creep, and keep a tight grip on the to-do list.
Resource your way to project success with Planio
With over half of all companies citing resource management as their biggest project challenge, it’s no wonder techniques such as resource allocation are so popular.
Resource allocation helps identify, analyze, and strategically deploy resources to help you avoid common pitfalls and deliver your project’s objectives. While resource allocation isn’t easy, it can be made simpler if you follow a set process.
And, like many things in project management, tools like Planio are essential to help you manage resource allocation correctly. After all, one central place to allocate tasks, track resource time, and report on progress helps you go from being head down in detail to confidently leading your team toward reaching your goals.
Try Planio with your team — free for 30 days (and with no credit card required!)
