What is a resource? It’s not the same for every industry!
A resource is something that helps a business create a product or deliver a project. These could be in the form of the people, material, technologies, funds, and more. Some businesses like Professional Services rely heavily on its people and they become the primary resource, which is quite different for a manufacturing firm that will need to track different raw materials that go into making a product.
Understanding all your resources and how they play a role in creating value for clients is the first step in resource management. For Professional Services firms, it is about understanding the availability of consultants to allocate their time effectively for different projects while ensuring that each project is profitable and all available consultants’ time is efficiently utilized.
What is resource management and how you can make this an effective activity
Resource management is all about delivering the maximum value to the client while making the best use of all available resources. It is about having an understanding about what makes a project successful, which projects should be tracked to profit margins, client satisfaction, etc, and allocating resources in a way that those goals are met.
It is easy to confuse resource management with project management. While these two terms are related and both aim to deliver the best possible outcomes for the client, they are different functions. A project manager has to make a list of tasks for a project and then assign different people in the project team to complete those tasks. Resource managers, on the other hand, have a broader view of all available resources across the business and they also have visibility of the sales pipeline, backlog, and finance, which helps them make better allocation of resources to different projects.
What businesses gain by focusing on effective resource management
There are several benefits of having a separate resource manager/resource management department in your business. By leveraging resource management, you can:
- Solve problems proactively with greater visibility around resource availability in the future, skills needed for upcoming projects, and budgets
- Avoid a situation of some consultants facing burnout due to over-allocation while others have idle time due to under-allocation
- Monitor the progress of a project and act before things spiral out of control
- Analyze the reasons why some projects are more profitable and what led to issues in others
- Plan for the growth of the business with the right resource capacities and systems in place to support that growth
- Ensure on-time and on-budget project delivery
- Foster better collaboration and communication across the business with improved project visibility
- Create a balance between project requirements and the need for employees to have some free time by checking for upcoming holidays and vacation overlap to ensure adequate resource allocation and avoid resource dependence for project completion
- Manage the costs of the project with a right-shoring approach if you have consultants spread across the globe
- Improve the rate of billable utilization with an efficient workload allocation, and deploying non-billable resources to billable projects when needed
- Avoid the same resource being deployed for projects repeatedly by creating a system for consultants to try new things, which will build more rounded expertise
While there are many benefits of having a resource management function in your business, the people who will manage it will only be as good as the system and software available to them. For Professional Services firms to become more efficient in resource management, it is important to implement a Professional Services Automation (PSA) solution.
Professional Services Automation: The tool you need to manage resources efficiently
Project-based businesses that are looking to improve resource management should consider implementing a Professional Services Automation (PSA) solution. A PSA solution that is connected to your Finance, Human Resources (HR), and Customer Relationship Management (CRM), solutions will help in end-to-end project management and ensure that you are able to hire the right talent at the right time and staff different projects efficiently.
No matter what tools, technologies, and processes you use for effective resource management, the goal of all these activities should be to deliver the best projects to clients while maintaining a healthy profit margin. With this objective in mind, you will be able to put the systems in place over time and gain confidence in delivering bigger, more complex projects with higher revenue per billable employee, reduce revenue leakage, and ensure shorter Days Sales Outstanding (DSO) cycles.
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