Resource Utilization: 4 Things You Are Doing Wrong
Planning and management of human and non-human (equipment, machinery, etc) resources play an essential role in the success of a project. According to the findings of Huemann and colleagues, resource management has strategic importance. In traditional project management, each project is independent. However, in today’s project portfolio management setting, the majority of the projects compete for the same scarce resources. Although organizations are working hard to find ways to deal with possible resource insufficiencies, compromises still have to be made. At times, the compromises managers make are at the expense of the resources.
Rather than leveling resources through hiring, firing, and subcontracting, tasks are piled up on the existing resources. Without a comprehensive overview of the project portfolio (or high-level resource management), it might even happen without the managers themselves knowing about it while scheduling. The problem is dealt with post hoc when the delays become apparent. Endless email threads. Arguments between the project managers. While it’s clear why each project manager wants the projects they are leading to be successful, someone has to step down once a resource conflict has appeared. Single project success doesn’t equal organization success. You need the majority of the portfolio to succeed for that.
A way to manage the portfolio in a way that it would meet the goals of the organization is to make sure that the smallest part of the organization - the resources - well managed. A point where to start is managing resource utilization as throughout as possible.
Resource utilization is one of the three important things what makes resource management important. It’s also a thing that can be forgotten or done neglectfully.
Here are 4 mistakes resource managers make when managing resource utilization:
1. Not Managing Utilization
When doing high-level resource management, utilization might be the last thing you think about. And honestly, if you aren’t messing with concurrent tasks, you do you. Resource utilization isn’t for everyone. However, when scheduling in a multi-project environment, where there are multiple ongoing projects that use the same resources, managing utilization is inevitable.
When estimating task duration, the other tasks of the resource cannot be overlooked. If there isn’t a way for you to consider those tasks, because you don’t know if the tasks are there, you need a resource management tool that allows multi-user access and multi-project scheduling. It’s that plain and simple.
Not managing or tracking resource utilization can lead to resource overload or overlooked. Neither is good. It has been found that on days where people experience more challenges, they also experienced more positive emotions and more engagement in their work. Meaning your team needs to feel challenged in order to feel more engaged and happy. On the other hand, it has been found that over utilizing a resource and the stress that accompanies extreme workload can lead to burnout. And when managers carry out management practices that promote job control (ie resource management), it reduces the burnout risk.
The other side of the story is that overbooking a resource will simply cause a delay. Each project and booking is dependent on another. Even if there are no dependencies per se. If a resource isn’t able to complete a task since it was busy with another task, there will be a delay. And utilization planning is something that can prevent the problem.
Resources are your main expense, and as stated before, resources also play a key role in project success. It just isn’t very cost effective to neglect your resources and not make sure they are optimally utilized.
2. Only Managing the Short-Term Utilization
When talking about resource utilization, often what is meant is the utilization for a week or two since that’s the time period for which detailed scheduling is done. However, when the sales team is forecasting resource availability to see if a new project can be taken on, they aren’t looking a week or two ahead. And resource availability and resource utilization are close-knit.
When a resource is already booked with a project for the next two months but the utilization isn’t specified, it can leave the expression that there might be room for another project’s assignments. Or it can leave the expression the resource is booked all the way when in reality the task only takes about 20% of the work time to complete.
Precisely planning the utilization of each task three months ahead can sound plain stupid. However, it’s still a good resource management practice to use all the knowledge you have while scheduling. Meaning if you know a task should be completed during two weeks but there will be enough time for the resource to deal with other tasks during the time, you should let other managers know that with setting the task utilization to a lower percentage than a hundred. You know, just as a common courtesy.
Additionally, it could be helpful to use custom data to add a task phase to each task. When the task is scheduled and all the specifics haven’t been laid down yet, the task status should indicate that. When the details are figured out, the task status should be changed. That way there aren’t any misunderstandings regarding what the other project managers will see in the resource management tool.
3. Controlling the Utilization of a Resource and Not the Team
Another thing that we see that is done wrong regarding resource utilization is not considering the whole team, department, or office. Often, each resource is considered an island and the big picture is left on the background.
When the project portfolio manager is spending a lot of time making sure the resource utilization would be consistent across the resource pool, it might not be a problem. However, if we are talking about hundreds of resources in different departments and locations, managing the utilization without grouping the resources is just unnecessarily time-consuming. Neglecting to control the utilization of the groups can hurt you in the same manner as not controlling it at all. A department could be overloaded with projects, while another could be essentially dormant.
To fix the problem, you can add custom data to your resources to build a system and to identify the resources through various characteristics like location, department, skills, etc. Then, the data can be used to create custom resource groups. If the resources are grouped, resource management tools like Ganttic calculate the group utilization for you.
The resource utilization formula that is used is the sum of the utilization percentage of each resource is the group divided by the number of resources in the group. Similarly to resource utilization, the group utilization is calculated taking into account the tasks in the visible time period.
In addition to controlling the utilization of resource groups, having an overview of the utilization of each project in the project portfolio. In Ganttic, you can use project capacity graphs for that. The graphs will appear when the resources are grouped by projects. When the timeline is collapsed, you’ll see a heat map of when your resources are the busiest in the context of each project and the portfolio. The formula that is used to create project capacity graphs is the same as the formula to calculate group utilization.
4. Not Forecasting the Trends
Another thing about resource utilization is that you can set up all the different views, add all the custom data, and manage it to your best knowledge and you could still miss the trends on a larger scale. Not utilizing the advantages that a resource utilization chart can give you is a huge miss.
Resource utilization charts concentrate the information you feed them. Utilization charts can take large amounts of data and make it into something that is easy to read. Charts are something you can use just to understand the big picture and charts are something you can use during presentations to present the big picture to stakeholders. You can forecast what to come, where new resources need to be hired to prevent conflicts and where new projects can be taken on since the utilization is low.
Using Ganttic, you can create a resource utilization report template that can be displayed as charts. So you won’t have to take the extra step of exporting the data from the resource planning software and then creating a chart using Excel spreadsheets. You won’t even have to select the data you want to be used to generate the chart. You can just save the resource utilization report template and generate the chart again and again. You can create chart templates for each department, location or even project. You can play around with different time periods to understand the big picture even better.