How to do resource allocation in project management


No matter how good your project management is, poor resource allocation will cause your projects to run late and your resources to be over-worked.

And that only ends one way – badly.

Sound familiar?

But don’t worry, we have got your back.

In this post learn what resource allocation is, why you need to be doing it and simple actionable steps to get your resource allocation working.

Ready to learn more?

Resource allocation (also known as resource planning) is a resource management technique that helps you choose and assign the best resources for your projects.

It helps you ensure resources are not over allocated and project time frames are kept as short as possible.

Unfortunately, not all project and resource managers use resource allocation to their advantage.

Why do we need to do resource allocation?

Only 26% of companies always use resource management to estimate and allocate resources according to a recent PMI survey.

And the same study finds less than 60% of projects meet the original budget and barely 50% of them are being completed on time.

Something is going badly wrong…

And the answer may be improving resource allocation?

Only 26% of companies always use resource management to estimate and allocate resources.

Project Management Institute

What is resource allocation in project management?

To help explain this topic we have used examples from our resource management tool Kelloo.

Resource allocation involves selecting and assigning the right resources for your projects.

It involves recognizing which skills the projects need, which resources have those skills and assigning the resources to the projects.

Good resource allocation should avoid over allocated resources and minimize periods when resources have too little work. It should also focus resources on the projects with highest value to the organization and aim to keep project timescales as short as possible.

Sounds difficult right?

But the truth is given the right tools and techniques you can get a winning resource allocation process up and running quite simply.

Resource allocation is used to plan who is working on what protects. Project planning is used to schedule the work they are doing on the projects.

Kelloo's resource management tools

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

What are the challenges when doing resource allocation?

While effective resource allocation is not necessarily hard to do, there are a few challenges along the way that resource managers need to negotiate around.

Shared resources

The ideal is to use a dedicated team of resources on a project, however the reality is that resources are often working on more than one project at a time alongside other non-project activities.

This makes it very difficult and time consuming to manage resource utilization.

Unlimited work but limited supply of resources

Innovative organizations have no problem generating new projects and ideas. However all organizations are constrained by resource supply.

Focus on the right things

As new projects start up and priorities change it becomes increasingly hard to ensure your resources are working on the right projects.

Organizations need to constantly validate they are working on the right things.

How do you do resource allocation in project management?

So let’s take a deeper dive into how to do resource allocation and learn how to make the best use of the resources at your disposal. If you are looking for an in-depth guide to resource management take a look at our Ultimate Guide to Resource Management.

Here are 8 best practice tips to get your resource allocation process on track.

1. Get to know your resources

Before you can allocate resources you need to know who they are and what they do for you. This means understanding what skills they have and how much time they work for you. This is sometimes called your resource pool.

Here is how the resource pool looks in Kelloo showing resources and teams organized into roles along with usage costs.

Kelloo resource pool

2. Understand your priorities

You will always be asked to do more projects than you have resources for.

So you need a good handle on which projects are the most valuable or highest priority to your organization as these should be the focus for your resources. In Kelloo you can organize your projects in priority sequence just by dragging into the desired priority order.

Prioritize projects

3. Get to know your projects

For each project you need to understand its resource requirements.

You should be able to get this information from the project manager who will have a good idea of the types of people and skills they need and when they need them.

Avoid the project manager requesting specific resources at this point. There will always be some resources who are faster at getting things done or better at their job. You know what projects are the priority for your organization so you need to decide which projects get which resources.

Estimate work

4. Resource allocation requires negotiation

You will have multiple projects and project managers all competing for the same resources. So a big challenge is balancing resources across project workloads.

Resource allocation inevitably involves trade-offs the resource manager needs to carefully negotiate. It helps to have a resource management tool showing current resource levels and skill hot-spots as this can be used to demonstrate the resources constraints within the organization.

5. Watch resource utilization

As you allocate resources to projects keep a watch on resource utilization. Don’t allocate your resources at 100% as you are setting up your plan to fail. So perhaps aim for around 90% or take a look at historic levels of utilization on completed projects.

If you are a Kelloo user, the resource utilization heat-maps are displayed in the resource planner. This means as you change the plan you instantly see the impact on resources.

Allocations and utilization

6. Understand the impact of using different resources

Always consider different resource options for your projects.

There is no right answer as to which resources should be used so try different resource mixes on your project. Swapping a junior member of staff for a senior member of staff may mean the job takes a little longer but the cost savings may be worth it.

It helps if you are using a resource allocation tool that lets you model different resource options and see the impact on your projects. Ideally you want to be able to see the impact of using resources with different skill levels and costs.

In Kelloo we call this scenario planning – it is also known as what-if analysis.

Manage scenarios

7. Resource allocation planning is an ongoing process

Once you have your resource allocation planning process up and running you need to keep on top of your plans. Projects slip, resource leave and priorities change.

Set time aside for regular check-ins with your project managers, stakeholders and team managers and feedback any changes into your plan. So ensure you use a tool that lets you quickly update your plan.

8. Use resource allocation tools

Don’t underestimate how valuable resource allocation tools can be. Most folks start out building resource allocation plans in spreadsheets like Excel or Google Sheets but quickly realize they are not a great tool for the job.

A small investment in a resource allocation solution can go a long way to solving your resource planning issues. For example Kelloo is a great template for resource allocation planning as it includes all the tools a resource manager would need when allocation planning.

What are the benefits of resource allocation in project management?

Following the right processes for resource allocation and using a resource management tool can deliver benefits in many ways:

  • Improves visibility of all resources across the organization.
  • Gives the organization clear visibility into how many projects it has the capacity to work on.
  • It provides a platform so that resource managers and project managers can resolve resource conflicts.
  • Project bottom line and timescales can be improved by intelligent use of resources.
  • Reduced occurrences of over utilized resources.

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