Resource Utilization Mistakes: 4 Things You Are Doing Wrong
Every PMO wants their resources to work as efficiently as possible. The way to measure that is through resource utilization. However, not only is this metric often overlooked and underused, there are a number of common mistakes that project managers make when implementing this indicator.
Here we’ll go through the top 4 things you (and others) might be doing wrong when it comes to using your resources. Plus, how these can be easily rectified by the use of resource management tools.
First, let’s see what this concept is and why it’s important to use. To the dictionary!
What is Resource Utilization?
Resource utilization is the resource usage as a percentage (%). It is a way to measure how much time of the total working time each resource spends on each task.
Finding this percentage is easily achieved by monitoring how much a resource is working (used time), in comparison to how much it could have been working (working time). Optimal utilization is between 90%-95%, so as not to burn out your resources.
Why Is Resource Utilization Important?
It helps with the planning and managing processes. And is one of the three important things that makes resource management important. You can track the utilization for both human and nonhuman resources (equipment, machinery, etc). And it’s essential for project success.
Let’s look at an example.
Example: In traditional project management, each project is independent. However, in today’s project portfolio management (PPM) 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. That’s why knowing the resource usage is so imperative: it gives you a quantifiable amount for the resources’ usage.
The measurement can save you from so many future problems. Endless email threads. Arguments between the project managers. Overloading your resources. Delays. By measuring resource usage, you can nip these problems in the bud. But that doesn’t mean it’s always implemented correctly. So let’s fix that!
The 4 Most Common Mistakes in Resource Utilization:
By focusing on the mistakes of others, we can learn to do better. So, here are 4 mistakes resource managers make when managing utilization:
1. Not Managing UtilizationAlways manage the resource utilization and keep an eye on not overworking your resources.
Resource utilization isn’t for everyone. However, when scheduling in a multi-project environment, which fights over the same resources, managing resource usage is inevitable. And necessary.
When estimating task duration, each resource’s other tasks cannot be overlooked. Sometimes there isn’t a way to consider those other tasks. Maybe you don’t even know if the tasks are there! In that case, you need a resource management tool that allows multi-user access and multi-project scheduling. It’s that simple.
Why is it important to manage resources?
Resources (including human resources) are your main expense, and as stated before, they 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. So by tracking and managing your resource usage, you’ll know about:
The actual workload on the workers
See exactly how under or overloaded each resource is.
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 (i.e. resource management) it reduces the burnout risk.
Plus, you can spot potential disasters before they start.
Overbooking a resource will 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 here planning resource usage is something that can prevent the problem.
2. Only Managing Short-Term Utilization
Do not forget to also look at the long term utilization. It can be 3 months, 6 months or even the next few years.
When it comes to optimal resource utilization, usually people only think of the short-term. And because detailed scheduling is often only done for the upcoming week or two, the same goes for planning resource usage. But, there is a “BUT.” When the sales team, for example, 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 utilization in this case, are close-knit.
Why is it important to also work with long-time utilization?
When a resource is already booked with a project for the next two months but the utilization isn’t specified, it can mean to leave room for another project’s assignments. Or it can mean that the resource is booked all the way, when in reality the task only takes about 20% utilization of the work time to complete. Leaving plenty of room to deal with other projects.
Better for communication
Precisely planning the utilization of each task three months ahead can sound time consuming and pointless. However, it’s still a good resource management practice to use all the knowledge you have while scheduling. For example, maybe you know a task should be completed in two weeks. But, there will be enough time for the resource to deal with other tasks during the time.
In this instance, you can let other managers know that, by simply setting the task utilization to a lower percentage than a hundred. No need to deal with meetings or back-and-forths on email. Let the resource utilization do the talking!
TIPS to solve it using Ganttic :
Additionally, if you want to get into systematic utilization planning and use special programs like Ganttic, it could be helpful to use custom data to add a task phase for each task.
In Ganttic, for example, you can schedule a task without details and set it to “in confirmation” as its status. That lets you go back through later to add specifics. And once the details are figured out, the task status is changed to “confirmed”. 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
Always keep an eye on the group utilization as well. You can see that the London team is pretty over-utilized.
Another mistake we’ve noticed regarding the usage of resources, is not considering the whole team, department, or office. Often, each resource is considered an island and the big picture is left in the background. But that’s not how it should be!
The resource utilization formula that is used is the sum of the utilization percentage of each resource in the group divided by the number of resources in the group.
Similarly the group utilization is calculated taking into account the tasks within a certain time period.
Why is it important to also control team utilizations?
More Consistent For All Resources
When the project portfolio manager is spending a lot of time making sure the resource usage is 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.
TIPS to solve it using Ganttic:
Adding Details And Custom Data
To fix the problem, it’s wise to use software which allows you to add custom data to your resources. Programs like Ganttic, can help you build a system and 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.
Use Project Capacity Graphs
In addition to controlling the usage of resource groups, software can give 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 Using Utilization Charts for ForecastingTake a look at utilization graphs to also see the trends in utilization and workflows ahead.
Resource utilization charts concentrate on the information you feed them. They can take large amounts of data and make it into something that is easy to read. Not only are charts something you can use to understand the big picture, but they are something you can use during presentations to illustrate the big picture to stakeholders. You can forecast what is to come, where new resources are needed, and where new projects can be taken on if the utilization is low.
Why is it important?
Show it, don’t say it
It’s a missed opportunity! Utilization graphs can offer a lot of information in a simple, visual way. Use it for forecasting and make better long term plans. Because you’ll know exactly how much each resource will be working with a simple percentage, you can precisely spread out their utilization. For 1 task or 4.
TIPS to solve it using Ganttic:
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 report template and generate the chart again and again. You can create chart templates for each department, location, or even project. And play around with different time periods to understand the big picture even better.With resource utilization charts, you can view and better understand the long term trends. Set up different views, and see your resources from a variety of angles. All of these features will have you looking to the future with easily generated and easily readable charts.
Everyone Makes Mistakes
But only fools learn nothing from them. Take these lessons from others to heart, and start monitoring your resource utilization. It can give you a whole slew of information that will make your project and resource management better, more optimized, and more efficient.
Even better is if you can find software that can measure this utilization for you. Automatically and constantly. It might be the last mistake you ever make.