How to Solve 5 Resource Allocation Problems

Crafting a successful project hinges on effectively managing and distributing resources, yet the path to optimal allocation is rarely smooth. There are team members to manage, skills to track, budgets and costs to balance, and so much more. Then, on top of that, there are some common pitfalls you’ll run into while balancing all of these things.

In this article, I am going to define resource allocation, address some of these common resource allocation problems, tackle how to avoid or fix them, and give you some recommended resource management software tools that can help you take care of them.

What is Resource Allocation?

Resource allocation is the process of assigning and managing available resources (i.e. personnel, equipment, and materials) on specific projects or tasks to meet project goals efficiently. Many projects run into optimization problems when things change or when project managers are unsure of how to find the optimal allocation of resources.

Having a plan to tackle these resource allocation problems is key to routing your best resources to the right work to get every project completed to the absolute best of your abilities. Part of resource allocation is being able to adjust your allocation decisions to address bottlenecks in completing your project.

Common Resource Allocation Problems

Here are some common issues that tend to plague the decision making and resource allocation process.

1. Scope Creep

One of the most common resource allocation problems is scope creep. This happens when things are continually added to the project scope and quickly grow beyond the upper bounds of your available resources.

• What causes it? Scope creep occurs when clients request changes or work that was not outlined in the original scope, or when team members add more to their deliverables than is necessary. When you or your team “bites off more than you can chew,” it can quickly lead to burnout or project failure if not corrected.
• How to avoid it? The best way to avoid scope creep altogether is to set a clear project scope from day one, inventory your total amount of resources based on the project scope, and communicate expectations clearly with your client and your team.
• How to fix it? Acknowledging scope creep is the first step to fix it. From there, you can implement change control procedures to make clients aware of how their requests cause delays in the timeline or require extra budget. If the scope creep is coming from your team members, make sure you are clearly communicating expectations and feedback with them.

A 3 MINUTE READ, TWICE A WEEK

Wrangle your projects with the latest insights, tips and (if we’re honest) moral support from project pros. Get the newsletter in your inbox twice a week.

Your email*

This field is hidden when viewing the form

Consent

Yes, I want to sign up to receive regular emails filled with tips, expert insights, and more to build my PM practice.

By submitting you agree to receive occasional emails and acknowledge our Privacy Policy. You can unsubscribe at any time. Protected by reCAPTCHA; Google Privacy Policy and Terms of Service apply.

Name

This field is for validation purposes and should be left unchanged.

Case Study

Let’s say you are developing a CRM for a client but, after the project scope has been agreed upon, the client decides they want more robust features which require far more complex coding capabilities and, therefore, resources.

To account for this, you have to extend the timeline, increase the budget, or remove something else from the project scope. The solution here is to then sit down with the client, reassess the project, and decide what trade-off to make. You should also set new parameters and guidelines for future adjustments to the project scope.

2. Skill Gaps

Another common resource allocation problem that can pop up is lacking the necessary personnel or the right skills to complete a project. This is referred to as a skill gap and can cause a lot of problems if not addressed early on.

• What causes it? A skill gap occurs when you lack the team members with knowledge to complete a task. Normally, this can happen when a particular deliverable or activity is required that no one on your existing team is able to complete.
• How to avoid it? As with scope creep, the best way to combat skill gaps is to set a clearly defined project scope at the onset of the project. If you have carefully laid out every step of the project, then you will know exactly what skills and personnel are required to complete the project.
• How to fix it? There are two options to fix skill gaps: hiring new team members who have the necessary skills or spending time and resources training existing team members on those skills. Both will require a decent amount of time, which can push back the deadline for your project.

Case Study

Let’s say you’re working on a web development project for a client. Obviously, you will need someone with computer science and coding skills on your team.

However, some of the client requests will require additional hardware installation, which you weren’t prepared for. It will require an overhaul that falls far outside the scope of what was initially planned. You now find yourself with a skill gap for someone to tackle this portion of the project.

You spend a full week looking for the right team member that meets these qualifications while the rest of your team waits for this new team member to be onboarded and brought up to speed on the project. You also push back the deadline for the project and waste precious resources.

While the skill gap has now been filled and you have learned for future projects, you will lose time on completing the current project

3. Inaccurate Forecasting

Instead of the project scope expanding or not having the necessary skills to complete a project, you might incorrectly or inaccurately predict the resources needed to complete the project.

• What causes it? It usually comes down to a lack of knowledge on how to complete the project. Not understanding project deliverables could lead to not having the correct skills or the right team members, for example.
• How to avoid it? In order to get ahead of inaccurate forecasting, actively communicate with your team members and subject matter experts to make sure you have a clear idea of what needs to be done. You can also use specific project forecasting software to help predict what issues may arise throughout the project.
• How to fix it? The best thing you can do is communicate clearly with your stakeholders and team and push back the deadline to correct any gaps in the project in a timely manner.

Case Study

There is a framework in resource allocation known as the “knapsack” in which you imagine a bag which represents the total finite amount of resources available to complete a project. You cannot add more to a project without enlarging or replacing the knapsack because it represents clearly defined boundaries for both the lower bounds and upper bounds of your total resources.

Inaccurate forecasting is like selecting the wrong size or shape knapsack to complete the project. You can’t fit enough or the right stuff for what you truly need to accomplish your goals.

All the resource optimization in the world cannot help you if you simply aren’t prepared for what might happen. Understand each project fully and completely in order to best prepare for any and all available outcomes.

4. Communication Breakdowns

Another common resource allocation problem is communication breakdowns, which can lead to a lot of chaos in your project.

• What causes it? It can be caused by not setting up clear modes of communication, but it can also be caused by simply misunderstanding what each stakeholder is trying to communicate. This is easy to do when we don’t have clear rules for how to interact with one another.
• How to avoid it? The easiest way to avoid communication breakdowns is to sit down early on in the project and create a communication plan. It outlines what modes of communication will be used and common language that might be used, and helps you set boundaries around when and where to communicate so everyone is on the same page.
• How to fix it? Once communication breakdowns have started, the best action you can take to get back on track is to start communicating more clearly and set up communication channels. You should also implement regular project updates for the whole team and set clear expectations moving forward.

Case Study

Let’s assume you have a fully remote team working with a client who is not remote. Communication can become an issue because one team is already used to remote work while the other team is used to working and communicating in person as needed.

You could have one team member in New York and another in Vancouver who are working to the same standard, but your client in Omaha is feeling like they aren’t getting the updates they want or receiving feedback quickly enough.

A month into the project and your client is happy with the work being done and goals being accomplished, but shares frustration with the “lack of communication.” This is when it might be time to set up a meeting to make sure everyone has the same understanding of progress made on the project and set communication expectations moving forward.

5. Underutilization of Resources

Underutilization occurs when you don’t take full advantage of the skills, personnel, or even equipment available to you to complete a project. This can lead to scope creep, inaccurate forecasting, or a lack of engagement from team members.

• What causes it? Oftentimes, this approach stems from a lack of knowledge about the resources at your disposal and their utilization. For example, if you have someone proficient in back end development on your team but you have them working on front end development, they might disengage from the work or not be as effective as they could be. 
• How to avoid it? One of the best ways to avoid this type of resource allocation problem is to invest time and energy into skills mapping and inventory. This will help you identify the skills needed that are already at your disposal as well as what physical or digital resources are already available.
• How to fix it? To fix the underutilization of resources, start by monitoring your workload distribution and then strategically reallocate your resources accordingly. This will end up saving you more time than if you continue on in this pattern of underutilization.

Case Study

Imagine you’re working on a project to build a new app for a client in the ecommerce space. You want to make sure you are using the right resources to get the job done but have a relatively new team who you are still getting to know.

After a few days you have a conversation with one of your team members who you have had working on UI/UX and realize that they are more suited to tracking analytics and metrics.

A simple course correction is to switch this team member to a more appropriate part of the project, take note of their skills on your skill mapping tool of choice, and reconnect with the client about the change to make sure everyone is on the same page.

Read more: Looking to better manage inventory resources? Check out our list of the best inventory resource management tools.

Why Should You Fix Resource Allocation Problems? 

The key reason you should fix resource allocation problems is that inefficient resource allocation can significantly hinder project success and negatively impact your team and organization. They can create a negative experience for both your team and your client.

Tackling resource management and mastering resource allocation can help streamline your project workflows while also increasing your efficiency on accomplishing more tasks in less time and with fewer resources. Proper resource allocation methods can save you a lot of time and financial resources in the long run with some careful and strategic planning.

However, this resource management technique is far easier in theory than it is to effectively implement. 

Tools for Resource Allocation Problem Solving

Software tools are the easiest way to allocate resources. Here are some key benefits of using resource allocation software tools:

• Improved visibility: Resource allocation tools can help you identify and track all of your skills, personnel, physical and digital resources, etc. so you can make decisions quickly and confidently.
• Improve planning and scheduling capabilities: Some tools will help you schedule not only team members but also what tools to use and when team members might need to offer specific skills at specific points in the project.
• Easily identify and resolve resource allocation problems: An obvious feature is being able to flag resource allocation problems so you can resolve them before they become bigger problems.
• Resource forecasting: There are specific forecasting tools to help you manage your project resources and maximize your resource utilization.
• Real-time tracking: The ability to see progress being made in real-time can help you manage resources even more efficiently.
• Collaboration and communication: Some of the better tools even allow for communication all within one space so project stakeholders can find everything they need in one place.

Here are some key features of resource management software to keep an eye out for when selecting the right tool for your projects:

1. Real-time visibility: You need to be able to see who is available, their workload, and their capacity in real-time. 
2. Detailed resource scheduling: Your resource allocation software should allow you to schedule resources for specific project tasks and durations with features like drag-and-drop scheduling and the ability to visualize timelines.
3. Demand forecasting: You should be able to predict resource requirements and plan capacity accordingly.
4. Skill tracking: You need the ability to track the skills and competencies of your team members, which is essential for assigning the right people to the right tasks. Features that allow you to tag employees with skills and search based on those skills can improve resource allocation effectiveness.
5. Financial management: Being able to track project budgets and costs is essential. This feature allows you to monitor the financial implications of resource allocation decisions and make sure projects remain within budget.
6. Workload resource planning: A good tool should provide a view to monitor who is doing what, the time allocated, potential bottlenecks, and who has capacity.
7. Resource allocation automation: A simple feature that goes a long way is the ability to automate your resource management processes. Automating the process of assigning tasks, such as drag-and-drop builders, can reduce manual effort and improve efficiency.
8. Resource utilization tracking: Monitoring how effectively resources are being used is crucial for optimization. Finding a tool that helps you take advantage of all the resources at your disposal is critical.
9. Collaboration tools: For teams, especially remote ones, features that facilitate communication, task sharing, and file sharing are important for staying aligned.
10. Scenario planning and modeling: Some advanced tools offer the ability to test "what-if" scenarios to understand the impact of changes in resource allocation or project timelines. This feature is particularly effective for larger projects.

What’s Next?

Tackling resource allocation problems can be pretty intimidating, but I hope this article has given you some new confidence to meet those challenges head-on. If you are looking to learn more about resource allocation or resource management, then we would love to see you become a member and join thousands of other digital project managers in our Slack community.