Portfolio resource management guide

Portfolio resource management

Resource management forms a cornerstone of the portfolio management process.

Resources are normally the most expensive part of an organizations moving parts and require a strong focus to make the most of them.

And interestingly, more and more organizations are adopting a lightweight or lean approach to portfolio management. If you want to learn more about Lean PPM take a look at this article.

Portfolio resource management is used to effectively assign resources to the most appropriate projects in the organizations portfolio.

What is portfolio resource management?

Portfolio resource management includes processes to help organizations forecast resource needs, compare resource demands vs capacity and allocate resources to the right projects.

In addition, it helps to inform the organization about their ability to execute current or prospective projects given resource constraints.

Portfolio resource management takes a high level broad view of the organizations resources and how they may be best deployed to meet the organization’s needs.

For effective portfolio resource management organizations need accurate information about:

1. Current resource capacities. The resources they have to hand and their skills.

2. Project priorities. A prioritized list of projects is required to ensure that resources are being allocated to the right projects.

3. Current resource allocations. Which resources are currently working on which projects.

4. Resource forecasts. Expected resource needs for projects in the pipeline.

Portfolios by their very nature involve many competing projects and initiatives all seeking resource. 

And portfolio resource management helps by allowing us to treat resources as a strategic asset.

Key to this is managing resources holistically as resources are often shared across projects. 

Portfolio resource management process

An optimized process for portfolio resource management has many integrated and moving parts. But arguably the two most important elements are project prioritization and capacity planning.

Project prioritization

A fair and objective way to prioritize projects is required. 

The right prioritization method to use depends on the organizations strategic intent and what it seeks to accomplish during the coming years. 

Ideally some combination of metrics including financial return, risk and implementation difficulty should be used.

Understand resource constraints and limitations

Using the prioritized projects, an initial matching of resources to projects should be done. 

The aim of this is to gain an understanding of resource shortfalls or over-supply.

This provides a cut off point showing which projects are likely not to be approved due to resource issues.

This is often called capacity planning

We can see how Kelloo uses a cut off line to clearly show which projects have a resource shortfall. The higher priority projects above the cut off line have sufficient resource while the lower priority CRM Project falls below the cut off line due to resource constraints.

capacity shortfall

Refine priorities, timings and resource levels

You can use this information to review priorities, timing of work, shift resources between projects or use temporary resources to move more projects above the cut off line.

Now, this is really important.

To enable organizations to consider the multiple permutations of project selection, timings and resources levels in a portfolio, it helps to use a resource planning tool with a scenario planning feature.

This enables management to model changes to the portfolio and consider “what if” we make this change.

Allocate resources to projects

Once a balance between the project demand and resource supply has been achieved resources can be allocated to projects. All the time being aware of utilization and capacity constraints.

Once resource allocations are finalized, the resource allocations can be communicated to project managers who can commence high level project planning.

Again, using an example from Kelloo below, we can see how the resource plan combines resource priorities, allocation data and utilization reporting to allow decisions to be made. 

resource overallocation

Portfolio resource management software

Traditional PPM (project portfolio management tools) have a strong focus on project execution and project selection but a weak capability around resource management.

Whereas traditional resource management tools have a focus on managing utilization and time reporting.

Using a tool like Kelloo allows you to align priorities, resources and allocations across a multi project portfolio. It enables this by providing portfolio prioritization, portfolio management, resource allocation and resource planning in a unified solution.

Kelloo's resource management tools

Resource planning, forecasting and reporting in one place. We help you get the most from your projects and people.

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