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.
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!
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.
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.
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!
By focusing on the mistakes of others, we can learn to do better. So, here are 4 mistakes resource managers make when managing 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.
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.
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.
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.
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!
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.
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.
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.
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.
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.
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.
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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