A significant component of optimizing business performance is spending your money well. The money you save is a form of profit. Why use resource management software to reach your goals? It's what many successful companies use to make important hiring decisions, reduce worker downtime, and respond to shifts in product or service demand.
Adapting your resource allocation strategy by yourself may result in wasteful spending. So I've compiled the following reasons you should turn to reputable resource management and planning software to help your teams collaborate more effectively and increase your company's return on investment.
What Is Resource Management Software?
Resource management software helps businesses manage their time, money, and assets effectively. It ensures you're working on the highest priority projects first and placing people with the right skill sets on teams where they're most effective. It also reduces resource allocation to downtime by eliminating the need to pay employees who aren't matched to specific goals.
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Resource management software can help companies in all stages of business. It allows them to identify the most important skills they need to target when hiring newcomers, predict future resource demand, and tweak their project planning strategies when priorities shift.
In addition, having the right resource management tool allows your project managers to run multiple projects without missing important updates or metrics.
6 Reasons To Use Resource Management Software
Here are six ways resource management software improves your management abilities.
1. Displays Current Resource Allocations
Before you can devote resources to a new client or project, you must assess whether you have resources available. Resource scheduling allows you to forecast when your key team members will be available to hop on a new project.
You can use this information to determine several things:
- Whether you need to hire or train new staff to meet rising demand
- What sort of turnaround time you're able to promise your clients
- If your company has the capability to take on the project
- Whether your team members are working on tasks that allow them to meet their true potential
If project managers are trained to use a resource management tool for resource planning, they can give execs a more accurate estimate of whether they can meet demands. For example, they can let you know that key team members are currently engaged elsewhere and when they will be available, so you can avoid promising a deliverable you can't meet.
2. Determines True Resource Capacity
Resource capacity can be defined by the amount of people you have available and the number of hours they're contributing.
For example, if a project requires 200 man hours to complete and you need to deliver it in a month, you must first determine how many hours each of your employees has to devote to their work each week before you know the size of the team you must assemble.
A full-time employee might work 40 hours a week, but you should also consider how much time they're required to spend at company meetings and other work functions. In the example above, if you determine that one worker can devote 35 hours to the task each week, a team with six members on it can complete the deliverable within a month.
3. Tracks Resource Utilization
Resource utilization is making sure that you're using every person on your team efficiently without overworking them. Project planning and management software allows your resource manager to determine whether the team members placed on each project could be used more effectively on other company objectives.
You can use resource utilization analysis to see how effective each of your employees is as well so you know which team members are contributing the most value.
When it comes to managing resources through resource scheduling, you can determine who can take on more responsibility or be given the lead. You can also make essential planning decisions that could boost your staff's productivity, such as providing training or letting go of the workers who are routinely underperforming.
4. Predicts Future Resource Availability
Resource management software improves your resource allocation and planning by helping you determine whether your available resources match your anticipated demand for the future.
If you notice that you're going to have plenty of free resources three months from now, you can begin planning future projects so employees are not without work to do when they complete their current projects.
If one of your teams is on an easy project and projected to become free sooner than you anticipated, you can make plans to move several team members onto a high-priority project instead. If you have more resources at your disposal than projects to complete, you can focus on acquiring new customers so you can put your resources to use.
Resource availability can be linked to your recruitment efforts also. Knowing how you're utilizing your resources helps management make decisions regarding when to hire new talent and what roles you need to fill. Resource planning software helps you identify these kinks in your armor and take a proactive approach to filling in the gaps.
5. Reduces Unnecessary Downtime
Downtime can be a significant factor in why you're not receiving the return on investment you'd like. Every hour that your project team is off task is wasted money. While putting too much pressure on your staff can have negative impacts, such as burnout, poor job satisfaction, and employee turnover, finding the optimal balance can save your business a lot of money.
While downtime is inevitable, resource management software can improve resource planning through scheduling multiple projects, reducing the number of unnecessary meetings, and adding projects to the pipeline through capacity planning and resource forecasting.
6. Improves Hiring Decisions
Knowing your current resource allocation allows your recruiting team to use your current project management goals to find the right people for your business. When you're trying to scale your operations, it's important that you're not just hiring qualified people, but that you target skill sets more strategically.
If you're having an issue with resource scheduling because you lack team members with a specific skill, you can decide whether it's more effective to train an existing employee to fill a relevant role or to bring on someone new to cover the slack.
If your resource planning software reveals that you won't have the resource capacity you need to hit your upcoming goals, you can use this information to up your onboarding efforts and hire someone to fill the role.
Learn more about what resource management software is used for here.
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The Bottom Line
Effective project management begins with having the right resource management tool. If you're looking for an effective resource planning tool for your own business, check out our blog on the 10 Best Resource Management Software & Tools, and learn which common features to look for in resource management software.
Do you have a favorite resource planning tool for your small business? Leave a comment below and make sure to subscribe to The Digital Project Manager newsletter for the latest project planning and scheduling info.
Learn how to choose the right resource management software for your needs here.