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Leadership & Team ManagementTopics

A Step-By-Step Resource Allocation Example For Project Managers

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.

What Is Resource Allocation In Project Management?

Resource allocation is all about identifying and scheduling resources on various activities across your project(s) to achieve your project goals.

Resources in project management refer to anything you require to complete the project, including tools, equipment, facilities, or funding. On most digital projects, however, the key resources are people, so we’ll be specifically looking at allocating your human resources in this article.

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 strategically assign people to projects based on their skills, experience, and availability.

Why Is Resource Allocation Important?

Having access to the right resources at the right time and with the right skill set is critical for project success.

Resource allocation will help you identify and mitigate any risks, such as potential resource conflicts or gaps in availability, and manage your customers’ or stakeholders’ expectations.

Doing this early and often will save you and your company a lot of time, money, and headaches!

Furthermore, assigning resources optimally across your projects can lead to better company profitability, a more balanced workload, and reduced stress for you and your team.

What Are The Challenges Of Resource Allocation?

Allocating resources in the literal sense is relatively straightforward — it’s other factors such as resource availability and a fast-moving and ever-changing business and project landscape that make this process challenging.

Your project’s requirements may change, someone on your team might need to suddenly take days off, and your customers or other project stakeholders might throw you a curveball at the last minute.

On top of that, you likely won’t be dealing with just one project, but multiple projects, so there will be competing demands on your resources.

All of these factors will affect how much work your team can accomplish and when.

Without a proper plan in place or good resource management software, it’s challenging to maintain visibility over the constant workload and employee availability changes.

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.

You can try Runn for free at runn.io.

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.

screenshot of the runn people planner

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.

screenshot of runn project planner

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.

screenshot of runn capacity charts

Easily view team capacity and workload, as well as confirmed workload for team members.

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.

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:

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.

screenshot of runn project phases and milestones

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
screnshot of runn team capacity

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.

screenshot of runn capacity management

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.

screenshot of runn placeholder team member

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.

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.

screenshot of runn variance report

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 resource allocation 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.

Visibility over your pipeline of work and your team’s capacity and availability is critical, so you can react to changes quickly and adjust your plan effectively.

Subscribe to The Digital Project Manager for more concrete project management information and actionable insights.

Nicole Tiefensee

About Nicole Tiefensee

Nicole Tiefensee is the co-founder of Runn.io, a resource planning and forecasting platform that helps you keep your people, projects and profits all beautifully sync. Before Runn, Nicole worked as a digital project manager and Agile coach for almost 15 years. She's a true globetrotter and has led digital projects and coached agile teams in agencies, start-ups, and big corporations all around the world.

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