Term Definition

Resource management is the efficient and effective deployment and allocation of an organization’s resources when and where they are needed. Such resources may include financial resources, inventory, human skills, production resources, or information technology. Resource management includes planning, allocating and scheduling of resources to tasks, which typically include manpower, machines, money and materials. Resource management has an impact on schedules and budgets as well as resource leveling and smoothing.

In order to effectively manage resources, organizations must have data on resource demands forecasted by time period into the future, the resource configurations that will be required to meet those demands and the supply of resources, again forecasted into the future. Forecasts should be as far out as is reasonable. Resource leveling, as it relates to inventory, is a resource management technique aimed at keeping the stock of resources on hand level, reducing both excess inventories and shortages. In project management, resource leveling is scheduling decisions, which are driven by resource management concerns, such as limited resource availability. As opposed to leveling, resource smoothing may not delay the project completion date, only particular activities within their float.

Many organizations use professional services automation software tools to make resource management tasks more efficient and effective. The automated tools may include timesheet software and employee time tracking software, which calculate skill sets, experience and workload in selecting the most skilled employee in an organization to handle any specific project. This enables the organization to forecast future staffing requirements prior to project implementation.

In businesses where revenues are not dependent on product sales, such as legal, consulting, and engineering, organizations strive for minimal bench time. In these organizations, time and expenses are carefully tracked and billed to clients. In order to be sustainable, resources must be maximally utilized on billable time and activities. Effective resource management will optimize organization efficiency, minimize bench time and improve the bottom line.

Effective, proactive resource management delivers the utmost level of optimization and efficiency by enabling proactive allocation of resources based on business policies. At this level, implementation of business-policy oriented resource provisioning ensures that resources are provisioned in advance of business needs and in alignment with overall business priorities and objectives. This drives the highest possible resource utilization rates, while simultaneously minimizing business service and availability risk.

Area of Application
Project Accounting
Project Management
Resource Management & Scheduling

Related Terms
Resource Planning