Resource Allocation In Project Management: A Complete Guide
By Indeed Editorial Team
Published 23 September 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Resource allocation in project management ensures a project team has access to the resources required to complete a project. Often, this process helps a company use the right number of resources for each project. If you have an interest in becoming a project manager, it might be beneficial to know how to find, manage and arrange resources. In this article, we discuss what resource allocation is, outline the steps required to allocate resources and review the importance along with some tips and challenges of resource allocation.
What Is Resource Allocation In Project Management?
Resource allocation in project management is the process of assigning the right quantities and types of resources necessary for completing a project. It primarily involves sourcing and distributing funds and materials for business purposes. Resource allocation involves knowing the availability of the resources and scheduling them to complete projects on time. As a company has a certain number of resources, allocating them to the correct places can help minimise waste and maximise return on investment.
While resource allocation is necessary at the beginning of the project, managers often monitor resources throughout the project's lifecycle and reallocate resources depending on the project's requirement. Adjustments throughout the project's timeline are essential to ensure the timely completion of projects. Some resources you can allocate in project management are:
Labour: Resource allocation focuses on taking advantage of employees' talent, professional experience and qualifications and delegating tasks based on them. Labour might include external staff or contractors a company hires for support, such as marketing agencies, consultation and information technology.
Space: Often, a company requires space to complete projects, manufacture products and deliver services. A company might lease or purchase space to meet with clients and complete their projects.
Equipment: A company might use machines, tools, software or hardware to provide services, finish business-related tasks and develop products. For example, an electrical component manufacturing company might use a computer-aided design or CAD software and other software to complete their project.
Materials: A company's material might involve physical supplies that help a company generate outputs and produce products that customers can use. This primarily includes raw materials, such as steel, copper, iron, lumber and office supplies, like printers, stationery, computers and desks.
Money: A part of resource allocation involves reassigning funds and budgets to various departments and helping them complete different project phases. Different departments can use the budgets, such as the human resources department, to pay salaries, while the operations department might use the money for purchasing raw materials and equipment.
How To Allocate Resources In Project Management?
Follow these steps to allocate resources in the workplace and ensure timely completion of projects:
1. Know your project's scope
Before allocating resources and managing them, determining your project scope might be beneficial. Having a clear project scope makes it easier to understand how to allocate resources. Know whether the project is short, long, small or big. After knowing the answers to these questions, making the right decisions on resources that a company might require to complete a project becomes easier.
2. Identify your resources
When allocating resources, see which employees are available, what equipment the project requires and where you plan to perform your tasks. Answering these questions can help you allocate the right resources to the right people at the right time. After knowing the scope and objective of your project, it becomes easier to complete projects on budget and within a timeframe.
3. Find resources and funding
After confirming your resource requirement, use software to determine the availability of internal and external resources. Based on the project's requirements, you can hire new employees, rent new equipment or make decisions to support your project. You can provide a rough estimate of these resources for the business's financial plans.
4. Assign tasks and get feedback from employees
After determining the project's requirement, focus on delegating tasks to each employee. For a project to succeed, it is essential for team members to know their dependencies, responsibilities and deadlines for each task. Apart from allocating tasks to each employee, get feedback from employees to ensure they do not work overtime or undertime.
Importance Of Allocating Resources In Project Management
Allocating resources in project management is important because it helps an organisation plan a project. Preparing a plan can ensure teams collaboratively work together to reach organisational goals:
Ensures successful projects: The success of a project depends upon whether they have the right resources to complete a project successfully. By allocating resources, business leaders can achieve workplace goals.
Minimises cost: Resource allocation helps a company identify resources for a project. It helps companies determine cost-effective strategies and generate higher investment returns.
Improves products and services: Companies can develop high-quality products or services when employees have adequate resources. It can improve allocation over time and help in product innovations.
Boosts productivity: With adequate resource allocation, it becomes easier for companies to complete a project or task before the deadline and without compromising on the quality. Effective allocation ensures managers know which employees have too much work and who is accessible at a particular instant.
Improves time management: Knowing how long it takes the employee to complete the projects or tasks is essential for running a project. Proper allocation helps set an estimated time for completing a project.
Manages team workload: For delivering projects on time without facing any obstacles, adjusting employees' workload is essential. It can help managers verify which employees can accept more work and which employees have too much work to complete.
Enhances staff morale: By allocating resources wisely, managers can understand which employees are leading and lagging. Managers cannot identify which employees are performing above expectations without proper allocation.
Reduces risk: Identifying the potential risks associated with each project is essential for delivering quality products and services. With the proper allocation of resources, a manager eliminates risks and completes projects on time.
Tips For Resource Allocation
Here are some tips that might help in resource allocation:
Create a backup plan for scope change. A project might not function as expected and often, clients might want to change the project's scope. Having a backup resource allocation plan for your project is essential to handle such changes.
Avoid over-allocating resources. Underutilisation and overutilisation are bad for a business because you are not using resources to their full capacity. Overusing and over-allocating resources can result in resource burnout, lower the resource's efficiency and reduce the usefulness of other resources.
Review your resource allocation process. After a project completes, perform an in-depth analysis of the project. Reviewing resource allocation can help in analysing factors like utilisation rate and whether employees can meet project deadlines.
Challenges In Allocating Resources In Project Management
Here are some challenges a resource manager might face while managing a project:
Changes in project
Often, a project scope, timeline and budget might vary while a team is still working on completing the project. Managers might reassign resources to ensure team members have updated guidelines and complete projects on time. A team can adapt to these changes by defining new project goals, monitoring the team's performance and accelerating the team's progress.
Mismanagement of employee talents
Managing employee talents and assigning the right task to the right employee is important. Ensure that experienced employees receive tasks that fit their skill level and junior employees receive entry-level tasks. This also ensures that employees receive duties based on their skill, experience and educational qualification.
Some companies might use obsolete software for their resource management, making it tough to allocate resources based on the skill set of employees. Cloud-based software can help companies avoid discrepancies and make changes in real-time. Choosing the right technique and tool for the project can ensure success.
Availability of resources
The availability of a company's resources might affect the outcome of a project. Several teams and departments might share resources when a team works on multiple projects. Assessing the availability of the resource can ensure the team delivers the project on time. Developing a backup resource allocation plan can help managers overcome resource availability challenges.
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