What is Resource Management?

What is Resource Management?

Despite its importance, many people are still left wondering exactly what is Resource Management? In this post we will take you through every level of Resource Management, from the basics to understanding how effective it can be in maximizing your business potential. We will be covering the business areas that rely most upon Resource Management to function effectively, and who benefits from successful Resource Management. By the end of this post, the only time you should be hearing someone ask what is Resource Management is when that someone is coming to you for the answer.

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According to the Business Dictionary, Resource Management can be defined as the following:

“Resource Management is the process of using a company’s resources in the most efficient way possible. These resources can include tangible resources such as goods and equipment, financial resources, and labor resources such as employees.”

Effective resource management

Before we can dive deeper into Resource Management, however, we need an understanding of the building blocks that make it up. The building blocks we are referring to are Project, Program and Portfolio Management, each of which require thorough planning and (as you can guess) good management to succeed. If they are the foundation blocks, then Resource Management is the cement that holds them all together. Let’s look at each a bit more closely.

Project, Program and Portfolio Management

Given the similarity in both the titles and semantics, some of the following terminology can get quite confusing. Generally speaking, Project, Program and Portfolio management can be grouped under the same umbrella, but there are still significant differences between the 3 elements. The easiest way to distinguish the 3 is through their hierarchical structure:

Project Management

A project is an allotment of time set out to produce a unique product or result. Project Management (PM) is the planning and guiding of processes to achieve this result. These processes usually flow through 5 key stages:

  1. Initiation
  2. Planning
  3. Executing
  4. Controlling
  5. Closing

Companies will often have a Project Management Office (PMO) that look to standardize the execution of projects. Microsoft Project is an example of a PM tool. Resources at this level are the people working on the project itself, and of course project managers.

Program Management

A Program is a collection of projects that have been grouped together for the benefit of the company – usually regarding efficiency. Program Management is the managing of these projects, with a successful outcome improving the company’s performance. Much like a PMO, some companies may have a Program Management Office (PgMO) which oversee and prioritize the company’s programs. Here, resources span further, accounting for the multiple projects within each program.

Portfolio Management

Finally, Portfolio Management – or Project Portfolio Management (PPM) – is the centralized management of the processes, methods and technologies used by project managers and PMOs. PPM is used to orchestrate and prioritize projects to determine the best way to invest the company’s capital. People at this level tend to be senior management, CxO level people and any part time or dedicated resource professionals, setting the strategy and overall direction.

To put those definitions into practice, below is a diagram depicting different management levels in a hypothetical automobile car company:

Portfolio Management refers to the company-wide strategy of building cars for consumers. Program Management more specifically looks at what kind of cars will be built; in this case we have two programs dedicated to hatchbacks and estates. Then, a number of Projects deal with specific elements related to the building of cars. In our example, these are improving fuel efficiency and looking at hybrid technology.

The importance of Resource Management

All of the above elements rely on one thing for success: the appropriate use of resources. These resources include CxO people, project and program level professionals and of course those working on individual projects. The numbers of people involved varies with the projects themselves. Complexity is added when projects, and thus resources, overlap and interact. Further complexity comes with layers of program and portfolio management.  This is where Resource Management comes in. Even in small companies, Resource Management of one sort or another is a vital discipline to ensure the smooth implementation of a company’s business strategy. As small businesses become medium, large, and multinational, this need grows exponentially.

Putting people at the center of projects isn’t some well-kept secret; we have spoken before about how Resource Management is all about people. The appropriate management of these people is however strikingly important and often overlooked.

Decisions require data

A key part of any Resource Management strategy is in the power of modelling. Before any decisions can be made on how resources could be better managed, a clear understanding is needed about the current situation. Building models of the present resource situation allows organizations to visualize how resources are being used right now – who is doing what and when? Only when this data is clearly laid out and visible to all, can action then be taken to improve and optimize performance.

Going beyond models, and testing new scenarios

It’s a cliché because it’s true: “hindsight is a wonderful thing.” So, what if you could use the power of hindsight in advance? Tempus Resource can really help organizations of all sizes take the next step beyond simply modeling the status quo. Tempus Resource supports powerful ‘What-If’ analysis, allowing organizations to test scenarios and ideas without the risk of having to actually implement them first.

For example, a resource manager can see what the effect would be of adding another 10 workers to a specific team without having to spend the money on actually hiring another 10 workers. They can run the scenario, interpret the results, and make data driven decisions about the effectiveness of the strategy.

Let us return to our automotive example. As a project manager in that company, ask yourself these ‘What If’ questions:

  • What if we combined the Fuel Efficiency and Hybrid design teams, reducing engineer hours by 40%?
  • What if we extended the Estate Hybrid project deadline to next year?
  • What would these changes mean to our P&L this year? Would it help us meet our business plan for this financial year?
Tempus Resource from ProSymmetry

Tempus Resource from ProSymmetry lets resource managers and project professionals run these sorts of scenarios, model data as described, and drive company strategy forward accordingly. It’s powerful, and easy to use, modelling tools provide a simple means of analyzing your current resourcing setup. It’s scenario planning functionality makes it easy to test ideas and make data driven decisions.

So, what is Resource Management? It’s about making the best use of people to drive forward a company’s goals and strategy. Tempus Resource is a real time resource management tool that uses powerful What-If’ simulations to model project data. Take control of your organization with state of the art resource portfolio analytics.

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