Let’s face it – determining how to best make use of your project resources can be a challenge.
There are seemingly endless project tasks that require funding and attention, which makes it difficult to know which project components should be prioritized. Not to mention, poorly allocating your team’s time is a sure way to lead to burnout.
In fact, 74% of project team members report being overbooked on projects at least once a month, with 26% of respondents being overbooked five or more times per month.
This is where resource allocation comes into play. With a clear plan for distributing resources, you can avoid stretching your team too thin, thus improving team satisfaction while ensuring everyone has the resources they need to complete their tasks on time.
Resource allocation is when you strategically assign resources to various project tasks in a way that enables your team to produce the best possible results.
You already practice resource allocation in your day-to-day life, whether or not you realize it. Here’s an example:
A student has three exams coming up in English, science, and math, and to do well on all three, they need to allocate their resources effectively. This could mean hiring a tutor and dedicating the most hours to their weakest subject and studying only a few hours for their best subject. In this scenario, they need to determine how they can get the most positive benefit out of the limited number of hours they have available for studying.
The same goes for projects. You might want to have your most experienced and tech-savvy team members working on the most complex project components, whereas you can allocate the least amount of time and funding to tasks that will be simple for your team to complete.
In essence, resource allocation is what allows you to maximize your results using a limited amount of project resources.
To understand resource allocation you must first understand what constitutes resources. Resources can include budget, time, software tools, skill sets, supplies, training, team members, or the assistance of other departments.
All of your project resources will be either tangible or intangible. Tangible resources are physical resources (i.e. resources you can touch, such as machinery), whereas intangible resources are abstract, such as knowledge or skills.
Allocating project resources efficiently should be a top priority for project managers due to the numerous benefits of doing so.
For one, it ensures everyone is kept in the loop on task assignments and knows how much they can spend to get their work done – increasing the likelihood of producing project results that are high-quality and satisfactory.
Other benefits of resource allocation include:
- Maximizing your profit margins: Thinking strategically about how you’ll utilize your budget allows you to get the most out of it. For example, deciding which software tools you’ll use ahead of time allows you to shop around to find the right one that meets your needs – and your budget.
- Keeping team responsibilities clearly defined: An organized team is a happy team. Allocating resources will give your team a crystal clear picture of who’s working on what, which helps to foster collaboration and eliminate conflict.
- Helping you deliver your project on time: If team members have the necessary resources to complete all of their tasks, it’s less likely that you’ll encounter resource availability issues that can delay the project timeline.
While proper resource allocation has many benefits, project managers may also experience some challenges. Luckily, familiarizing yourself with potential issues that may arise helps prepare you for overcoming them.
Challenge #1: Poor resource utilization
If you work at an agency that bills clients on an hourly basis, it’s important to be familiar with resource utilization. This term refers to the percentage of an employee’s time spent on billable tasks versus the time spent on behind-the-scenes work that clients don’t pay for.
Resource utilization can be a challenge because many people spend a good chunk of their day on behind-the-scenes work that ultimately doesn’t contribute to project profitability.
Proper resource allocation can help mitigate this challenge because it ensures there’s a team member assigned to every task, which ensures you’re recording enough billable hours and no tasks slip through the cracks.
Challenge #2: Overallocation of team capacity
More often than not, project management teams are juggling multiple projects at one time. Overallocation occurs when project managers assign tasks to team members without considering their responsibilities for other projects, ultimately leaving them either burnt out or unable to meet expected deadlines.
It’s important to have some level of visibility into your team’s current obligations before assigning new work. Proper capacity planning is part of good resource allocation, which prevents you from overextending your team.
Challenge #3: Scope creep
Scope creep is when the client or stakeholders change the requirements or deliverables of a project after the project is already underway. These changes then force the project team to have to rearrange resources and timelines to adapt to these unexpected shifts.
Seasoned project managers know how to prevent scope creep, as it frequently results in wasted time and resources. You might’ve invested a lot of time into a plan for resource allocation, but even a small change in your project scope can cause you to have to redo that plan entirely, making it a main challenge when it comes to deciding on how you’ll spend your resources.
Resource allocation can be daunting, particularly when your resource budget is large. While project managers will learn the tricks of good resource allocation from real-life experience, we’ve compiled a list of 10 steps to start you off on the right foot.
1. Nail down your scope
We’ve already covered scope creep, so it’s no surprise that solidifying your scope is the first step to take for the right resource allocation. Ensuring your scope is set in stone requires getting approval from everyone involved in the project – including the client and internal or external stakeholders.
Once you’ve verbally agreed on a project scope, don’t forget to put it in writing. Your scope statement should outline your project elements and requirements as well as your assumptions. Your team can refer back to this statement later on in the project process to guide decision-making and help measure success.
2. Make a list of your available resources
Before you can even begin allocating resources, you need a complete understanding of everything at your disposal.
For instance, you’ll need to solidify which team members are working on this project and the skillsets of each, to then create a list of the physical tools or software solutions you already have access to.
That way, you can identify gaps in what you need versus what you currently have. Maybe you’re lacking a team member with graphic design skills – you now know that you’ll need to allocate funding to outsource these tasks.
3. Understand your resource dependencies
Sometimes external factors impact the availability of resources, making resources dependent on circumstances outside of your control.
For an architect, the availability of raw materials may depend on how quickly a vendor can ship the materials from overseas. Should a storm delay that shipment, your materials won’t be available when you initially expected, which could delay your project timeline entirely.
Your team’s ability to work is also a type of human resource that can be impacted by dependencies. Perhaps one of your team members falls ill or has an extended maternity leave – you’ll be left with fewer resources which can threaten your ability to complete your tasks on time.
This is why it’s critical to understand your resource dependencies at the very beginning of your project, that way you stagger your tasks accordingly and avoid bottlenecks from forming once the project is underway.
4. Have a plan B
As all project managers know – projects never go completely according to plan. There will inevitably be bumps in the road, and from a resource allocation perspective, there will inevitably be costs and staffing changes you didn’t anticipate.
That’s why it’s helpful to have a backup plan. It can be difficult to know exactly what a backup plan for resource distribution should look like. We recommend having some understanding of the priority level of each resource and knowing which resource dependencies to keep an eye on.
For instance, if the budget or resource allocation plan needs to be rearranged to account for a new cost, you can get rid of the lowest-priority resource first. This might be a software tool or funding activity that’s nice to have but isn’t completely necessary.
5. Share your allocation plans with your team
Project managers can fall victim to tunnel vision, which can result in them forgetting to allocate resources to all parts of the project. By running your allocation plans by your team before finalizing them, you can prevent this from happening.
Doing so also helps make sure your allocations are achievable. If you didn’t allocate enough funding to complete a task, the team member responsible for that task can let you know before it’s too late.
6. Implement a project management tool
Having a plan for resource allocation is one thing, but following through on that plan is a whole other challenge. Luckily, a project management tool can make planning and executing your resource allocation easier.
Several project management software solutions guide you through the process of building a budget and assigning tasks based on team capacity. Having a tool that can help you juggle financial management and work management in one place is crucial for ensuring your resources are being used where they’ll have the greatest impact.
Ideally, you’ll want a tool that can provide you with real-time budget updates on your project spending. That way you can immediately course correct, should your spending exceed expectations.
7. Utilize time tracking
Ideally, your estimation of the resources necessary to complete a project would be accurate, although this isn’t always the case, as discrepancies are inevitable. Time tracking is the main way that you can identify differences in the amount of time you estimated it will take to complete a task versus how long it actually takes.
It’s important to know whether your estimates are correct, particularly for projects where you’re billing the client on an hourly basis. Inaccurate time estimates have the potential to completely derail your budget and your resource allocation plan.
For example, if you’ve estimated that a particular task will take 10 hours to complete and it actually takes 15, your time costs will be 50% more than you initially anticipated. Identifying this discrepancy right away will allow you to rearrange your other estimates accordingly.
Pro tip: If time tracking isn’t for you, there are other time management strategies out there that will help you and your team cut down on wasted work time.
8. Check in with your team and ask for feedback
The importance of communication should not be understated during projects. The best way to know how well your resource allocation plan is working is to simply ask your team.
Ask questions like:
- Are you feeling stretched too thin on this project?
- What additional resources would make your job easier?
- Are there any resources you could do without?
Gauging the team’s needs with these types of questions will make it easier to know how you can best revise your plans should any changes become necessary.
9. Regularly review resource usage
You might not get your resource allocation plan right the first time around, which is why it’s important to regularly review your use of resources and revise your plans as projects progress.
You should absolutely be conducting this type of review at the conclusion of the project, but if your project is broken into phases, you can conduct this review at the end of each phase or stage and edit your plans for the next segment of the project.
Investing in a project management tool with a performance reporting feature makes this review process effortless, as you can simply glance at your actual vs. budgeted spending metrics to determine how accurate your plans were.
10. Have a change process in place
A seasoned project manager will likely be familiar with budget change management – in other words – the process of restructuring your spending plans.
Budget change processes can look many different ways depending on if you’ll need client approval to make changes to your spending plans. An internal process might just include a budget change request form where team members can submit funding requests for the project manager to review.
Ideally, you won’t need to use this change process, but it’s a good safeguard to have in place to ensure that your team always has the resources they need for success. If you’re receiving more change requests than anticipated, that could also be a sign that you need to request additional funds from the client or stakeholders.
We’ve already mentioned how a project management tool can significantly improve your resource allocation process, but Rodeo Drive specifically is an all-in-one tool built to meet the needs of creatives without requiring third-party integrations.
Here’s a look at Rodeo Drive’s most-loved features that help with resource distribution:
Phase-based budgets and an easy estimate approval process
All projects begin with a budget in Rodeo Drive, as we believe good budgets are the key to project success. You can break your budget into phases and estimate the time and expenses it will require to complete the tasks in each phase.
Once you’ve finished your budget, you can send the estimate to your client for approval directly from Rodeo Drive. Plus, you can even add your own personalized branding and terms and conditions. Once you get the green light, you can start knocking tasks off your to-do list.
Time tracking that’s connected to your budget
Time tracking is only useful if you remember to do it, which is why Rodeo Drive allows you to track your time in two different ways. If you prefer to record your time as you go, simply start your live timer when you begin a task, and stop it once you’re finished.
Alternatively, you can enter a timecard after the fact to record your hours worked. Either way, Rodeo Drive will prompt you to attach your recorded time to a budgeted activity, which is what allows your budget to update in real time.
Reports on metrics like time registration and employee productivity
Because all of Rodeo Drive’s features are interconnected, we’re able to bring you a selection of automatically generated project reports based on your team’s usage of the platform to inform your decision-making.
You’ll have access to reporting data on project financials, employee productivity, and time registration.
For all reports, you can filter the data by project, team member, or client. Prefer to create your own reports outside of Rodeo Drive? No worries. You can export your data as an Excel or CSV file.