What is Resource Management?

In a professional services firm, resources are the individual team members, or subject matter experts, that you have at your disposal to execute and deliver great projects with great customer outcomes. Having an accurate understanding of your resources is invaluable to running a profitable business.

At its core, resource management is simply the process of organizing what skills your team has, what projects they are working on, and when are they available, so you can effectively deploy and allocate the resources to tasks or projects, and scheduling their time where they are needed. 

This article is your Resource Management 101 guide in which you’ll learn key jargon terms as well as why resource management is a critical function for growing your business. 

Ready? Let’s dive in.

 

 

Why Resource Management Matters for your Services Business

A significant challenge facing growing services organizations is the ability to plan and resource projects accurately to maximize billable utilization. There is always uncertainty around resource management as no one can predict the future. Resource management helps businesses mitigate this uncertainty by providing the skills and tools to better manage your business.

When you’ve only got a few consultants, resource management is a relatively easy job. As your business grows, knowing who is available to work with clients becomes a much larger and more difficult job. Even small professional services firms use resource management software to ensure their business runs efficiently.

You can provide the best value to your clients when you can tap into the knowledge and skills of your people. That means you have to be able to accurately plan how those people will be used to deliver services.

Why Resource Management Needs To Be a Business Priority

  • Lowered risk of overcommitting resources according to their availability
  • Greater ability to match employees to the right projects based on their skills 
  • Increased organizational efficiency that minimizes bench time 
  • Ability to strategically reallocate resources in cases of lower project volume
  • Optimized skillsets according to project pipeline
  • Increased ability to deliver on-time and let your customers see their own ROI
  • Upwards of 30% increase in billable utilization*
  • Almost 55% growth in annual revenue, per resource*

*According to Services Performance Insights

Key Terms To Know About Resource Management

Now that we’ve established the value of Resource Management, getting to know the jargon is the first step in learning how to manage your team for optimal utilization. The following is a summary list of some key terminologies that you will want to understand what they mean, and they are important for your business.

Skill

Skill is an important term in resource management because you want to allocate work to people who have the right skills.

Resource managers look at the skill profile of their team, in order to best match them to client work. In professional services, your teams’ skills are typically managed in a library and are aligned with the types of projects that you deliver.

Proficiency

Proficiency is the level of expertise a team member has in a particular skill or domain, often determined based on experience, training certification, or other internal criteria.

Team members are allocated to projects on the relevant skill, often taking into consideration how well they can perform that skill, in order to achieve customer or organizational goals. Team members generally have better motivation and job satisfaction levels when engaged with the tasks.

Resource Leveling

Resource leveling in project management is a way of making scheduling decisions. It is done by adjusting the start and end dates of tasks taking into account resource availability or other limitations.

The benefit of resource leveling is that the work being assigned fits within your available hours, ensuring that your resource isn’t overloaded, facing more work than they can realistically accomplish, leading to feelings over being overwhelmed and job dissatisfaction.

Bench Time

“Bench time” is non-billable time. The term is commonly used in consulting and professional services environments to refer to the time when employees are working on non-revenue generating tasks.

Understanding the trends for bench time in your business can help you plan the use of resources more effectively. Too much non-billable time could present cashflow problems for the business. Too little, and consultants won’t have enough time for important tasks like learning new skills.

Utilization Rate

Utilization rate is the percentage of time a person spends doing billable work compared to their total available time.

Understanding utilization rates provides insight into how well the firm is operating since it is an indicator of billable utilization and profitability, as well as employee satisfaction. Under- or over-utilization means you’re not applying your resources correctly to billable projects and adjustments likely need to be made.

Utilization Report

Utilization reports help you visualize the extent to which a resource was used, typically organized based on projects or tasks that they are working on. 

Understanding utilization rates is required for effective capacity planning. For example, a trend towards higher utilization may show that essential non-billable work like pitching, lead generation or accounting is being squeezed and that it’s time to bring more consultants into the business to cope with increasing work.

Resource Calendar

A resource calendar is simply a calendar that shows working hours and non-working hours for an individual.  

Typically, an organization will set a calendar based on corporate working hours, factoring in regional holidays. More mature organizations will also factor in non-billable or administration time. The calendar should ideally capture availability daily or weekly availability, according to planned or unplanned time-off including personal time-off for vacations, appointments, even maternity/paternity/adoption leave. This allows for optimal flexibility to schedule resources according to their availability.

Resource Broker / RMO

A resource broker or Resource Management Office (RMO) is the person or team responsible for managing the resource pool.  Often found in larger organizations, the RMO is responsible to negotiate what resources are needed for a project or assignment, and make sure they are available based on need.

The role extends beyond simply allocating the resource pool to client engagements, and often includes resource forecasting or skills planning, to ensure the team has the adequate skills to deliver upcoming work based on the sales pipeline.

 

The Benefits of Resource Management

Now that you understand more about resource management, let’s consider some of the many benefits that companies frequently achieve when they adopt enterprise-grade professional services tools with resource management capabilities.

Resource management software lets you optimize how people are allocated to work based on policies and protocols you set at a business level.

You’ll have confidence knowing the best-matched employees are assigned to appropriate clients based on their skill levels, experience and availability, minimizing bench time and increasing project throughput.

Effective resource management is essential for international teams, where the resource pool is made up of individuals in various time zones, locations and with various language skills. You can also set availability based on national holidays to ensure the team is not assigned to tasks on non-working days.

In addition, you can optimize utilization rates while managing the risk to client services through lack of availability.

Resource management helps you understand the skills of your team so you can better tap into their unique talents. A centralized resource database lets you record skills, interests and experiences for each person, and easily keep that information up to date as they grow as consultants in your business.

The resource database is fully searchable. As your team grows, it’s impossible for resource managers to hold all the information about individuals in their heads or on a spreadsheet. Intelligent search helps resource managers find staff in the right location, with the right skills and experience to best serve your clients.

Resource management lets you do more than simply plan current engagements. You can use forecasting features built in to your software to predict resource needs into the future and improve operational efficiency. Then you can plan to upskill existing resources or recruit new team members based on the needs of your business.

This lets you move resources around, assigning people to higher value work in a timely fashion and making considered decisions about billable utilization.

Managers can make better decisions about project profitability, next steps for client assignments and much more when they have accurate data.

Resource management automation tools including timesheet software provide all the reports you need to surface key information in the business. Whether you need information at a client-specific level, a team level, resource level or something else, you can analyze the right information to make strategic decisions quickly.

Reports are concise yet detailed, allowing users to drill down into more detail if necessary while clearly presenting the big picture. Data can be displayed in table or chart form, making it easy to understand. As the data comes from real-time information, you know it’s always up-to-date.

Ultimately, effective resource management helps your business use time more effectively. These benefits are compounded when you adopt resource management automation solutions because you can save even more time and boost efficiency further.

Not Sure Where To Start?

Many businesses want to take the next step towards process automation and better resource management but aren’t sure exactly where to start.

Watch our on-demand webinar, The State of Resource Management Automation Tools, to get actionable guidance on how to build the best team for every project, improve forecasting accuracy, and provide transparency to internal and external stakeholders.