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Resource Utilization: Mistakes and 4 Easy Fixes

Management TipsResource ManagementResource PlanningTask Scheduling

Resource utilization ensures projects are delivered on time. Every time. And doesn’t every manager want their work to run as smoothly as possible? Yet, when deciding to employ this metric, there’s some best practices project managers should be on the lookout for.

Here we’ll go over 4 of the most common resource utilization mistakes. With few tips on how to get the best results from this measurement. With them, you can rest assured that your projects and teams are running as efficiently as possible.

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 easy. Just choose one of these two formulas:

 – Scheduled or Forecasted Utilization:

  Scheduled Utilization = Scheduled time/ resource capacity

 - Actual or Reported Utilization:

Actual Utilization = Reported time/ resource capacity

ProTip: In resource planning tools such as Ganttic, your resource utilization actually shows up right next to your resource’s name. No math involved!

What is Optimal Resource Utilization?

As great as it sounds to get 100% utilization out of your resources, there’s actually lots of downsides. Overusing resources can put your team and tools on the road to burnout. And that can lead to host of other downsides such as higher turnover, short-staffed projects, and additional stress on the rest of the team.

Instead, for non-human resources such as tools, equipment, vehicles, and facilities, aim to get your optimization between 90%-95%.

And for human resources, 70% is actually considered ideal.

***Real Life Case Study***

In the case of human resource utilization, consult with a pro. With this recommendation from the resource manager Innopolis Engineering,

In resource planning many project managers make the mistake of booking people at full capacity. However, in reality, employees get sick, or they have inspirational coffee breaks, trainings, or different courses. This means that on average people work 6.5-7 hours per day, not the full 8 hours. Taking that into consideration, I have set the work time to 7 hours in Ganttic.

Read a few more tips on getting the best out of your team with our full case study.


Why Is Resource Utilization Important?

Resource utilization is an important component of resource and project management.

Resource utilization is important, because it helps with planning and managing processes. And it’s essential for project success. Here’s a few more reasons why you should be tracking your resources’ usages, like yesterday!

  • Time saver for managers – The measurement can save you from so many future problems. Endless email threads. Arguments between the managers. Project delays. And anything else which eats away precious time.
  • Get the most out of your projects’ resources – Create a more optimal environment for your team. Prevent burnout. But have everything working at more efficient levels. Rather than leveling resources through hiring, firing, and subcontracting. Or piling tasks onto existing resources.
  • Better for projects with limited resources –  PMs know there’s usually never enough to go around. By tracking resource utilization, you’ll be able to deal with resource constrained projects. Know which projects can use a helping hand. And which have some hands to spare.
  • Helps the entire project portfolio – in today’s project portfolio management (PPM) setting, the majority of the projects compete for the same scarce resources. As such, compromises need to be made. But by monitoring resource utilization, it’s not at the expense of the resources.
  • Quantifiable data – Project management often feels like a guessing game. But tracking your resources’ usage, you have hard data behind the decision making.

The 4 Most Common Resource Utilization Mistakes

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 Project Utilization

When doing high-level project portfolio management, utilization might be the last thing you think about. And honestly, if you aren’t dealing with dozens of projects and concurrent tasks, you might not need to stress about it.

However, when scheduling in a multi-project environment, with daily fights over the same resources, managing resource usage is inevitable. And necessary.

Plus, when it comes to long-term planning, it’s a mistake to overlook resource utilization. You need it when estimating task duration. Sometimes there just isn’t another way to consider all those tasks. Otherwise, you might not even know all those tasks are there!

If that’s the case, you need resource management software that allows multi-user access and multi-project scheduling. It’s that simple.

Why is it important to manage project resources?

Reduces Costs
Resources (both human and non-human) are your main expense. And as stated before, they play a key role in project success. Resource management is important, because with it you can take care of one of the most valuable components of your projects.

With resource management strategies, you can ensure that everything is running as optimally as possible. This keeps your team from burnout (more on this below). As well as a reduction in turnover, and the high costs that can incur. It also ensures that your equipment is being used in the best way. And maybe you can discover that there’s no reason to but an extra bulldozer or move to a bigger office space.

This is also the reason why project resource management can save you money in the long-run. And is a great investment for companies looking to save money.

Protect Resources from Burnout
With resource management, you can 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 may need 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.

Prevents Potential Delays
By monitoring resource utilization in project management, 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.

Tips to solve it using Ganttic:

Always manage your utilization to get an overview about the actual workloads

This problem is super easy for dedicated resource planning tools. In Ganttic, you can track the utilization 3 ways: by looking at individual resources, groups, or tasks.

  • Individual utilization
    This percentage shows up right next to the resources name. So you’ll always have an idea of how hard your resources are working. It’s calculated by comparing the percent of available work time covered by tasks in the visible time period.
  • Group utilization
    If you instead decide to group your resources, you can see the total group utilization for the visible time period. This again appears as a percentage next to each resource. However, it is actually the weighted average of the group. Group you resources by projects to get the utilization for the project.
  • Task utilization
    By monitoring task utilization, you manually set the task’s percentage. This is useful if you need to schedule part-time tasks. Which may be necessary if you need to multitask.

2. Only Managing Short-Term Utilization

When it comes to optimal resource utilization, usually people only think of the short-term.

More often than not,  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 for a new project, 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?

More Precise
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 is time consuming and pointless. Although, it’s  good resource management practice to use all the knowledge you have while scheduling.

For example, maybe you know a task can 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. Simply by 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:

Make sure to look at your short-term as well long-term utilization

If you want to get into systematic utilization planning, it can 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 or resources. Then with custom task data fields, indicate that it’s  “unconfirmed.” Later, you can go back through and add specifics. And once the details are figured out, the change the task status to “confirmed”. That way there aren’t any misunderstandings regarding what the other project managers will see in the resource management tool.

3. Ignoring Team Utilizations

Team utilization can be found by looking at the individual utilization and diving it by team members..

Often, each resource is considered an island and the big picture is left in the background. But that’s not how it should be. It’s of course important to look at individual utilizations. But don’t make the mistake of ignoring the team! Or department, branch, or any other necessary grouping.

Here’s a simple equation to find the resource utilization.

Team resource utilization formula:

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?

Consistent For All Resources
A project portfolio manager spends lot of time making sure the resource usage is consistent across the resource pool. However, if we are talking about hundreds of resources in different departments and locations, it’s a different story! It’d be a mistake to measure the utilization without grouping the resources first.

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. With this practice you can maintain consistency across all departments and branches. Making the entire company more efficient.

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 resource 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 Forecasting

Resource utilization charts concentrate on the information you feed them.

They can help with big data project management. Effortlessly taking large amounts of data and turning it into something 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.

Similarly, with resource utilization reports, you can automatically inform your boss about how hard your team’s working. It’s also useful to 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 to use utilization charts in project management?

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.

Take a look at utilization graphs to also see the trends in utilization and workflows ahead.
Take a look at utilization graphs to also see the trends in utilization and workflows ahead.

Tips to solve it using Ganttic:

  • Create a resource utilization report
    Using Ganttic, you can create a resource utilization report template. Which can then be displayed as a chart. That way, you can skip a step. As there’s no need to export the data from the resource planning software, and then create a chart using Excel spreadsheets. Plus, you don’t even have to select the data you want to be used to generate the chart.

    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.
  • Create a resource utilization chart
    Alternatively, 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.

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