Step-By-Step Resource Allocation Example: See How It Works
Resource allocation is a critical step in the project management process. No matter your industry or whether you are running just one or multiple projects, you need resources. This includes things like tools or special equipment, and most importantly, people, to help you deliver the work and get the job done.
Optimally planning and allocating the resources available to you will impact your ability to deliver your project on time and budget. It may also affect your company’s bottom line and your team’s performance and happiness.
In this guide, we will explain what resource allocation is and why it’s important to get this process right, go over some of the challenges you might encounter, and then dive into a step-by-step example.
Who’s Responsible For Resource Allocation?
Resource allocation often falls to project managers, but some companies may also employ a resource or traffic manager for people planning and staff allocation.
Generally, project managers are concerned with allocating and managing resources for the projects they are accountable for. In contrast, resource managers take a more holistic view and look at resource allocation on a company level.
Both roles work hand-in-hand to assign people to projects based on their skills, experience, and availability, and by using resource allocation best practices.
Meanwhile, the traffic manager role functions similarly to a Scrum Master, focusing on process management, ensuring that requests align with resource availability, and facilitating communication across teams.
The traffic manager has an allegiance to the process…bringing a voice of reason to the team and aligning it with business priorities.
Step-By-Step Example: How To Allocate Your Project Resources
Let’s say you’ve taken on a project for your new client, Ezycounting, a rapidly growing accounting firm with annual revenue of $20 million. They’ve come to you to build a mobile app in a timeframe of 6 months. We’ll name this Project Ezy!
Disclaimer: We’ve included examples from the Runn app to illustrate how to allocate resources to your projects. Runn is a modern resource planning and capacity forecasting app that helps project managers to plan and track their people and projects.
Having worked as a project manager myself for many years, I am well familiar with the challenges of resource allocation. I co-founded Runn to solve these issues and help provide you with company-wide visibility across your projects and the people needed to deliver them.
Before You Get Started
1. Know Your Project Team’s Capacity And Availability
Before you begin allocating your resources to specific projects, it is essential to figure out how much time you have available to allocate in the first place.
Do some of your people work part-time? Do some of your people only work on certain days of the week?
Begin by making sure you know your team’s capacity and how many hours per week or day each employee can work.
Runn’s People Planner gives you real-time access to your resource pool of employees and contractors so you can see everyone’s existing workload, holidays, and availability for allocation.
2. Know What Other Work Is In The Delivery Pipeline
It’s also important to know what other work is currently underway and what work is coming up as you may have people working on multiple projects at a time. Things can start to get messy if you over-allocate some people and under-allocate others.
Runn’s Project Planner displays all your projects scheduled in the selected timeframe and will show you what’s currently on.
If you’re a Runn user, the People Planner and Capacity Charts are quick ways to see where you may be going beyond capacity.
Most capacity planning platforms will allow you to easily conduct team capacity planning and resource allocation planning.
Scheduling Your Project And Allocating Resources
Once you have an idea of the other projects in your pipeline and how many people and hours you have available, it’s time to get to work on allocating these resources to your project. The easiest way to approach this process is to use resource scheduling software.
1. Understand The Project Scope And Delivery Constraints
Firstly, make sure you know the requirements and deliverables of your project and have identified any delivery constraints, such as:
- What’s in and out of scope
- Deadlines
- Dependencies
For Project Ezy, you know you need to deliver a mobile app within six months with a hard launch date in July.
2. Identify Roles And Skills For Your Project
Now, identify the roles, skills, and seniority level you will need to deliver the project.
Ezycounting requires a native iOS app, so you’ll need someone with Objective-C programming skills.
As a project manager, you might not always know who will be appropriate for the job. Remember to consult the respective team leads, solution architects, and resource managers. They know their team members well and will have an idea of who on their team would be a good fit or where you may be lacking in skills necessary for project delivery.
Based on the size of Project Ezy and the timeframe given, you predict you’ll need:
- 1 project manager
- 1 UI/UX designer
- 2 developers
- 1 tester
3. Map Out Your High-Level Project Timeline
Next, build out a high-level project plan. Work with your team to break down the scope into tasks and activities and estimate how much time you think you will need to deliver the scope of work. The number of hours or days your team will need to complete each task will feed into your project’s resource plan and schedule, so this is an important step.
It helps to visually draw-up the project phases and make a note of any critical milestones, key deliverables, or deadlines throughout the project schedule.
Once you have lined these all up, you’ll be able to see a timeline with start and end dates for the project.
In Runn, you can quickly draw out project phases and add project milestones.
Project Ezy spans from February to July and has seven significant milestones and 5 phases.
4. Allocate People To The Project
Choose the available resources you want to assign to the project, ensuring that they can take on new work. Remember:
- To take any time off or public holidays into consideration
- To make sure the people you’re allocating to the project have the appropriate skill sets
- And that no one is overbooked
Resolve any overbookings or conflicts by re-allocating the work to someone else or moving the timeline.
You’ve allocated Michelle, Monica, Kenny, and Beyonce to Project Ezy.
Runn allows you to add people to a project by role and skill, as well as alerts you of overbookings and time off in real-time so you can adjust things on the fly.
What if I don’t have the right resources at the right time? If you don’t have anyone on your project team with the right skill set, you might need to hire a contractor to help you deliver the work.
In Runn, you can use placeholders to indicate demand for a role or if you’re not sure yet who on the team will be taking on the work.
You’ve added a placeholder for the developer role while you continue allocating your other resources.
Another way to do this is to use a resource allocation spreadsheet with automatic calculations for costs and budget usage.
Once The Project Is Underway
As you progress through your project, things don’t always go as planned.
What if your resource allocation plans were too conservative, and you now run the risk of going over-budget?!
An easy way to see how your plans fare against reality is by using project management software with time tracking capabilities and having your team log timesheets throughout the project.
This allows you to identify how you track against your original resource allocation plan and identify any resource or scheduling risks early before they become issues. Frequently checking important resource planning metrics such as utilization and capacity will inform your decision making and avoid over-allocation and team burnout.
Utilizing an efficient resource management software can provide you with detailed insights into your resource allocation. Runn’s variance report, for instance, shows the variance between your actual and planned resource allocations.
Runn's variance report shows the variance between your actual and planned resource allocations.
To stay on track and mitigate any risks, you might have to:
- Swap out a resource
- Allocate more resources
- Change the allocation of resources
You’re two months into Project Ezy, and you think things are going pretty well. You log into Runn and discover that your staff has all been working over-time.
You talk to Ezycounting, and they agree to extend the project by two weeks.
Conclusion
An effective resource allocation process involves having a strategy before a project starts, assigning the right people at the right time, and keeping track of your plan along the way to ensure optimal team utilization and successful project delivery. To help you through this process, it can be beneficial to use a free resource management tool.
Visibility over your pipeline of work and your team’s workload capacity is critical, so you can react to changes quickly and adjust your plan effectively.
Learn more about how to master resource allocation here.
