Successful project portfolio management is impossible without resource management. After all, project goals are not achieved if the necessary employees (aka resources) are not adequately available or if they do not have the needed skills or motivation.
Companies are struggling with a variety of problems:
Hardly anyone has a clear overview of all employees’ qualifications and skills. If you, the resource manager, aren’t completely sure what qualifications and skills your employees have, then it is even more difficult to allocate the right people to the right projects in a sensible and profitable way.
Because there isn’t enough transparency about workload and capacities, the PMO often plans with inaccurate capacities.
Everyone, including executives, department managers, and project leaders, wants the best employees assigned to their project or to what they consider the highest priority project. This creates potential for conflict, especially in smaller companies, where resource management takes place directly at the individual level. Project managers and employees have to learn how the resource manager decides who is working on which project. In large companies, there is less potential for conflict because the resource managers usually plan based on roles and the project leaders are solely responsible for the staffing.
Key resources or high demand employees often create a bottleneck situation. They are often assigned to several tasks and projects at the same time and are chronically over-allocated, while other employees have ample capacity.
Employees are constantly switching between projects. This leads to delays and a noticeable reduction in quality and productivity (Source: Harvard Business Review).
The optimal resource manager has multiple skills in organization, multitasking, negotiation, communication, change management and compromise (Source: Bruce). But despite these skills, all of the above-mentioned problems combined make it extremely difficult for resource managers to make confident well-informed decisions that will actually work. So the question remains, what does a resource manager need to know and do in order to be successful?
#1 Multi-Project Planning: Consider Capacities
The main task of the PMO is to approve only so many projects for a specific time period as resources are available. So, it is important when planning the project portfolio to focus on whether it is feasible to successfully complete all of the projects in the portfolio rather than focusing on squeezing in as many projects as you can. Otherwise, resources quickly become bottlenecked. If that happens, the company will either have to hire expensive external resources or have employees work overtime, which isn’t a long-term solution.
It is just as important to plan with the right capacities from the get-go. So you should also take into consideration that only about 80% of employees’ time is typically spent on the actual project work, because the remaining 20% is reserved for other obligations as well as planned and unforeseen downtime.
#2 Multi-Project Planning: Setting Priorities
Prioritization can definitely be a challenge, but when the right priorities are set, then you have a much greater chance of project success. The goal is to assign resources in such a way that they can complete their tasks in order and in the least amount of time possible. It is also helpful to take into account the wishes of the project managers and employees, which will help them to be more motivated and therefore more productive.
The resource manager must take extra care when prioritizing for key resources to avoid project managers competing for those resources and to avoid over-allocating those resources. This prioritization is also important to successfully fulfill customer orders and can be especially challenging if the company has committed to too many project deals during the same time period. These challenges are made simpler if the resource manager is planning with the correct capacities from the start, which in turn makes prioritization easier.
Resource Management ≠ Staffing!
Anyone who equates resource management with staffing is a bit too short-sighted. Staffing is in fact only a subset of resource planning. Resource management is divided into three areas:
- Available Capacity: The task of the resource manager is to assign the required roles and skills for the current project portfolio. He/she records and keeps the company’s internal resource data current. He/she also assigns a role to every employee.
- Project Initialization: The project managers will determine which resources are required for their projects and then make the request for those resources to the resource manager. Then, it is up to the resource manager or team leaders to assign or staff the right employees to those projects and inform the employees.
- Tactical Resource Management: The resource manager must deal with changing framework conditions and resource availability, and find solutions to resource management conflicts as they occur.
#3 Project Planning: Focus on Key Resources
An employee with advanced or rare skills and qualifications who is central and indispensable to the company is considered a key resource. When a key resource is allocated to a task or project, then he/she should be blocked from being assigned to any other projects.
Because key resources are typically in high demand, the resource manager assigns key resources to only the most important projects and informs the project leaders and project managers. This avoids over-allocating key resources and also allows project leaders and managers to plan their projects in such a way that other capable resources are assigned to most tasks, and key resources are saved for only the highest priority tasks and projects.
# 4 Opportunity Planning: Consider Future Resource Requirements
Resource managers should always consider “what if” cases. Projects that are still in the approval phase may also require resources and time in the near future. This should always be taken into account by resource, even if the final approval for the project has not yet been made. This will minimize the need for resources to be removed from ongoing projects to work on the latest high priority projects. In principle, newly added projects should never jeopardize the current, still strategically important projects.
By identifying resource bottlenecks and potential conflicts at an early stage, resource managers can act accordingly. Possible solutions are assigning qualified resources with available capacities or hiring external resources as needed.
# 5 Skill Matrix and Task Matrix: Keeping Track of Resource Information
For the best possible resource planning, you must know employees’ abilities, qualification, and current utilization. It is the responsibility of the resource manager to collect and maintain this data centrally in a skill matrix or task matrix.
Employees typically personally complete the company standard skills matrix. The results can then be collected and evaluated using suitable tools. This makes the search for qualified and available staff quick and easy.
# 6 Sprint Team: Reduce Project Risk
If companies want to minimize project risk, putting together a flexible “sprint team” is an excellent idea. This is a team made up of efficient employees with specialized know-how, who are available on demand. They step in when bottlenecks arise or specific expert knowledge is needed on critical projects, reducing stress and resource conflicts. For the rest of the time, the team simply works on the most prioritized projects to contribute to overall project quality.
As you can see, successful project portfolio management is simply not possible without resource management. And it would be difficult for a resource manager to be successful without taking these six key factors into account. On the other hand, if you match the most qualified and available people to the right projects at the right time, then you will create project portfolios that really work and you will deliver on your projects.