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What is Resource Management and Why is It Important?

17 Jun 2022
What is Resource Management and Why is It Important?

Project completion is the culmination of the successful utilisation of resources. These resources are put to use in order to achieve, satisfy and accomplish the goals of a project or task. However, resource management is known as the manner, frequency, appropriateness and acceptable use of such resources.

Project management entails the skills involved in the management of employed resources to satisfy project goals. These require appropriate allocation, planning, scheduling and control of business resources to be brought into operation to achieve such goals.

A business may own a lot of resources. The simplest examples are capital, cash, land, machinery, office equipment, production plants (PP&E), vehicle and a plethora more.

All of these are assets or resources which benefit the economic operations of the company in some way. Just as the company functions to earn revenue by utilising these resources, internal projects also require the combination of these resources to be completed. A company may also employ its own available resources to complete in-house projects.

Examples of such projects are: building a new storage facility, complete installation of HVAC systems, getting new office furniture made and so on.

Therefore, in order for an organisation to complete such projects with efficiency with the use of already available resources, resource management is employed by project managers for the optimal utilisation of available assets for both project management processes and their completion as well. The IPM's Certified Project Management Diploma course may be of interest to you if wish to learn how to manage project resources effectively.

resource management skills

What is Resource Management?

Resource management, in simplest terms, can be defined as the appropriate employment of available business resources in order to complete projects with efficiency, time-bound limitations and efficacy.

The process of resource management techniques involves the allocation, estimation, forecasting and planning of usable resources to complete projects in a manner meant to maximise project resource utilisation and productive output.

Additionally, it would be correct to say that resource management utilises and allocates the use of available project resources in a way that reduces project costs while prioritising availability, visibility, data-driven decision making and team members' output.

Business resources are transformed into utilisable project resources. Once a project is assigned to a project manager and project team members, project resources become available for use. The use of resource management techniques, therefore, ensures that there is no misuse of available resources.

Misleading, inefficient and inappropriate utilisation of project resources leads to an increase in overall project costs. These costs decrease the operating revenues of the company, which in turn may lead to irrecoverable losses.

Moreover, human capital or labour is also part of project resources. Team members incapable of handling or operating under project management guidelines can cause time outlays at the expense of the company. Time is money - and time wasted is also money wasted.

That is why resource managing the right type of human capital or HR is also equally important in the management process. The right type of people with the right type of building blocks can get the job done in a timely-bound manner before a deadline.

On the other hand, if the management process doesn't consider resource planning as a whole involving different segments of the organisation, such as the working force, available materials, investments, time and many other important factors - then such resource planning may be deficient in managing resources properly.

It may ultimately lead to drawbacks in the completion of any projects whatsoever.

In order to facilitate proper resource management with resource managers, project managers can employ various kinds of resource management.

What are the Types of Resource Management?

Resource management is an important tool in project management for a number of reasons. This tool provides the appropriate recognition and adequate use of resource allocation, team members' skill sets, resource availability, planning, scheduling, budget drafting and controlling.

3 types of resource management with examples

The skills required by team members of project managers to fully render professional services and work to manage resources are centrally important. Therefore, there are various types of resource management entities that need to be taken into consideration.

These are:

People (Working Resources)

Organisations are made up of people or employees. Just as there is an organisational hierarchy to check, evaluate and control the performance of employees in a standard organisation, similarly, the same is true for project managers and their respective project management team members.

Project managers and project team members also fall under the umbrella of resource management. Project managers are trained to obtain the best performance of project team members to achieve and complete given projects. That is why it is important to view people working on a project as resources.

The skill sets of project team members are crucial to completing a task. Each member of the project team is capable of individual expertise, which contributes significantly to the completion of the project.

For example, a project for building a storage unit may involve but is not limited to the following human resources:

  • Bricklayers
  • Cement & concrete mixing technicians
  • Roofing tradesmen
  • Gravel & bricks transportation crew
  • Overseeing project managers

In this supposed scenario, there is a collection of technically trained people or human resources who are adequately allocated for completing this project. The project manager or managers oversee the work and ensure proper allocation of time, resources, team member follow-ups and business-head(s) related communication.

Building the storage unit is a task which requires the allocation of skills obtainable from the craftsmen (such as the bricklayers, mixing and roofing technicians etc.). On the other hand, planning, managing, and allocating the resources are suited to the skills of the project managers.

Therefore, the skills contained by these different people working on the same project are suited to different areas of the project. Without even a single one of these areas, the efficiency of managing resources may fall short, causing delays and loss in productivity and overall efficacy.

Therefore, allocating resources must also consider working resources keenly. It is important to keep track of individual team expertise to deliver the best resource management output.

Capital (Cost Resources)

Capital is the investment in a business by its owners. In terms of project management and resource management, capital is anything through the use of which costs arise, and expenditures incur and directly benefit the completion of a project.

The use of such equipment and its extent also falls under this category.

Capital resources include plants, machinery and tools which have been employed in order to complete a given project. In the case of the above example of a storage unit, the capital invested in completing it will be as follows, but not limited to:

  • Cement mixing machinery
  • Cranes
  • Scaffolding machinery
  • Tile-polishing machinery

All of these capital goods or capital resources will be brought into operation in order to construct the storage unit. The resource allocation of these PP&E must be recognised by resource managers.

Such a type of resource allocation also helps resource management in resource forecasting when current and future needs require recognition and identification.

This is also essential for budget, capacity, scheduling, efficiency and availability concerns. Timely resource management goes a long way in planning project tasks and maintains visibility as well.

Material Goods (Material Resources)

Material goods are the primary and secondary resources that combine with capital resources operated by human resources to complete a project. Such a combination is supervised by a resource manager who drafts a resource management plan.

Material goods are small pieces of the puzzle that, when put together correctly, yield the bigger picture. Examples of material goods include:

  • Cement for a building
  • Bricks
  • Tiles and floorboards
  • Tiling and floorboarding glue
  • Nails
  • Insulation fabric and more

Material goods also include raw materials that are needed for manufacturing projects. A management plan has detailed evaluation, budgeting and costs allocation systems in place for better optimisation of resource usage.

Replenishment, consumption and benefit estimation also falls under this category of resource management.

Why is Resource Management important?

A resource management plan is very important for all project management professionals. Not only does this increased control and efficiency of project completion concerns, but it also provides more data for an organisation to adjust its cashflows accordingly.

Resource management also gives better measures of transparency for users of financial statements and financial information in organisations.

Proper resource management is ideal for a number of reasons, such as:

1. Increase in Gross Yield for Projects

A lot goes into planning a project. By accounting for the performance of resource-related indicators, managers have the ability to look out for the best combination of materials, capital goods and human resources to supplement positive business yields.

For example, better resource management enables managers to complete projects that yield greater returns for business concerns at lower costs yet efficient expenditures. If such a resource plan is absent, hidden costs with bad material combinations can take over and cause troublesome business problems.

2. Planning to Easily Schedule Resources

Time table and schedule drafting for employment of resources conveniently fall under resource management. Consequently, it is easier to calculate the beforehand adequate allocation of resources with a management plan rather than making arrangements at the last minute.

Resource management processes streamline resource allotment with proper time slots needed to bring such instruments to the location of operation easily. Moreover, preparing reports for such scheduling measures is also significantly easier with a resource management plan.

3. Utilise Resource Capacity Conveniently

Resource capacity data can also be numerically analysed with transparency under a resource management plan. If resources are effectively analysed before employing them, then their productive output can also be accurately ascertained without any drawbacks.

It also makes it easier to deliver milestones with the proper estimates.

4. Efficient Hiring Processes

Management plans help identify the skill sets needed to complete particular projects. It is particularly useful to adjust a team member from one group into another by recognising their strengths and weaknesses.

Skills lacking in a team completing a project can then be supplemented by hiring identified and recognised expertise for such a project. This also helps to manage human resources effectively.

All project-related expenses can be accurately forecasted with the help of resource reports. Such reports describe in detail all expenses associated with the project.

These may range from the initial purchase of equipment and its delivery freight to raw goods/ingredients and spare parts needed for completing a project.

6. Track & Scale Your Company Realistically

Resource management allows teams to track, maximise and allocate finances related to project budget, capacity, visibility and skill acquisition into detailed reports. This helps track project expenses accurately and helps the higher managerial of the business to expand cohesively.

Company directors require concrete data numerically measured and presented in order to make decisions regarding business expansion and scalability considerations. Such management tools and techniques help identify areas of business expansion as well as the magnitude of available scalability.

Resource management examples

What are the Benefits of using Resource Management?

There are a lot of important benefits of using resource management. The majority of these help managers streamline their production processes while keeping up team morale. Projects worked under adequate resource management end up saving more money, cutting costs and completing tasks before deadlines.

Some of these primary benefits are:

1. Stay Productive

Such processes help eliminate overworking and burnout. This is essential in keeping up team morale, especially on projects lasting for months. A happy and productive team is the dream of an organisation's project manager.

On the other hand, overburdening employees only leads to detachment, resentment and withdrawal of work ethic and productivity.

2. Catch Trouble Early On

Planned processes help manage and identify problems in the early stages. This helps create resolution measures that actually work and move the team forward in the development stage of a project.

Undetected problems may accumulate and build up into bigger catastrophes - which, when surface, lead to irreparable damages.

3. Keep Transparency as a Standard

Transparency throughout all production tasks can be ascertained using resource navigation. Furthermore, it is easier to allocate the right resources with the proper budget that is clearly communicated through all levels of the organisational hierarchy.

4. Quantify Efficiency

A resource process which is detailed helps easily quantify the efficient capacity of teams, capital and material resources. This enables a managerial to navigate between strategies to use for an optimum combination of output levels of production. Marginal productivity can also be numerically assessed.

Quantified data is viewed as scientific and reliable for making important decisions. Such decision-making affects not only project-level consequences but also the corporate future of a business entity.

5. Take Control of Resources

Teams find it easier to operate within a set framework. It also enables them to easily deliver project milestones according to a drafted plan, schedule and budget with regard to controlled resource capacity.

Controlled resources can provide the benefit of proper use and avoiding misuse as well. Both of these are time-driven and require managerial processes to be in place - which is equally important for an organisation.

What are Resource Management Techniques?

Some of the most widely practised resource managing techniques ensure project success and optimal resource use. These techniques vary in purposes but should be employed in conjunction for the best possibility of project success and resource use.

4 Resource management techniques

These techniques are discussed as follows:

1. Resource Forecasting

Just as the name suggests, resource forecasting involves two stages. The first one is the identification of current resource requirements, whereas the second stage is the recognition of future resource needs which might arise.

Therefore, the current capacity and quantities of available resources must be considered to forecast against current and future needs required for project completion.

Both of these, when correctly estimated and accounted for, can make the difference between project success and project failure.

2. Resource Allocation

After a forecast of current and future needs is made, the next step is to manage resources to allocate them to such timeframes appropriately. This process considers budget, important tasks to manage and their priority levels. This also involves the process of allocating teams as well.

Project tasks will be identified, and certain resources will be assigned to them in order of current and future schedules. Assigned inputs can then be made use of without further delays.

3. Resource Levelling

Resource levelling involves offsetting overlapping resources that have been employed. Various activities of projects require the same type of resources. Consequently, adjusting such resources considering their capacity, task priorities, and deadlines is the essence of resources' levelling.

Certain tasks require more inputs, whereas others require less of such inputs or resources; that is where levelling techniques come into play. Not only does levelling help increase productive output, but it also serves as a tool for the prioritisation of important tasks.

4. Resource Utilisation

Resource utility is the standard of making sure resources should be employed in a way to maximise production output. This is especially applicable in the case of employees. A standard way of numerically calculating this is by dividing actual hours utilised of a resource by the total utilisable hours available.

This is particularly useful in determining the efficacy of an employee in achieving tasks when allocating a specific timeframe in a given cost schedule.

Effective Resource management is necessary for project success