Projects require many resources. Everything from the people you’re working with and the equipment they’re using, to the materials and other supplies you need to even the site where you’re working falls under the umbrella of project resource allocation. Let’s explore what resource allocation is, why it’s so important for project management and what tools you can use to better allocate your project resources.
Resource allocation is a critical process in project management. It involves assigning your project resources – including people, equipment, and materials – to tasks to ensure successful and on-time delivery.
Done right, resource allocation enhances productivity reduces waste and leads to greater project success. Do it wrong, and you risk delays, budget overruns, and poor quality outputs.
In this complete guide, I’ll walk through everything you need to know about resource allocation in project management
What is Resource Allocation in Project Management?
Resource allocation refers to the process of assigning your available resources to different tasks and activities in a project plan. It ensures you have the right resources – with the right skills and availability – to complete project work.
The key objectives of resource allocation are to:
- Match resources to project requirements
- Balance team workloads
- Optimize resource utilization
- Complete the project on time and budget
Effective resource allocation results in
- Tasks being resourced appropriately
- Resources being optimally utilized
- A balanced distribution of work
- On-time project delivery
Getting resource allocation right is crucial. One study found that difficulties with resource allocation resulted in:
- 60% of projects failing to meet goals
- 50% suffering from cost overruns
- 50% falling short on ROI
Clearly, nailing your resource allocation strategy is vital for project success!
The Resource Allocation Process Step-by-Step
How exactly should you go about allocating resources for your project? Follow these steps:
1. Define the Scope and Resources Needed
First, clearly define your project’s scope and objectives. Identify all the required tasks and resources – both human and non-human.
Ask:
- What work activities and deliverables are required?
- What skills are needed to complete the work?
- How many people do we need?
- What equipment is required?
- What materials and supplies are needed?
A work breakdown structure and resource planning template can help identify resource requirements.
2. Determine Resource Availability
Next, determine availability of the required resources. Consider:
- Which resources are already committed to other projects?
- When will resources be available for this project?
- How much of each resource’s time is needed?
Identify any constraints that may impact allocation. A resource planning matrix is useful for mapping resource availability.
3. Develop the Resource Allocation Plan
Now you can start assigning resources to tasks in a resource allocation schedule. Consider several factors:
- Resource skills and experience required for each task
- Resource availability and capacity
- Maintaining a reasonable workload balance
- Task dependencies and critical path
- Resource costs and budget
Optimization tools like resource leveling can help create an optimal plan.
4. Communicate the Plan
Once you’ve developed the allocation schedule, communicate it to the project team.
Ensure they understand:
- Which tasks they are assigned
- Time allocated to each task
- Deadlines for task completion
An online Gantt chart or work calendar makes it easy to visualize allocations.
5. Monitor and Control Resource Utilization
Track and monitor ongoing resource utilization. Re-evaluate allocations regularly.
Use capacity planning and tracking tools to:
- Assess actual vs planned resource use
- Check for overload and underutilization
- Identify the need for reallocation
- Keep assignments and schedules updated
Resource management software provides real-time visibility for optimizing allocations.
Resource Allocation Methods and Models
Several different methods can be used for allocating resources on projects. Common approaches include:
Critical Path Method
This network analysis technique calculates the shortest timeline for project completion based on task sequences and dependencies. Resources are scheduled to support the critical path tasks.
Resource Leveling
Levels resource usage over time to avoid work overloads. Scheduling is adjusted within project constraints to smooth resource requirements.
Resource Smoothing
Seeks to reduce fluctuations in resource needs over the project timeline. Task start/end dates are shifted to create a steadier resource schedule.
Resource Buffer
Adds buffer time between tasks to absorb variations in resource availability and task durations. Protects critical path from delays due to resourcing conflicts.
Optimization Tools
Software tools apply mathematical optimization algorithms to create the most efficient resource schedule possible. Enables rapid “what-if” analysis.
There is no one-size-fits-all method. Select the approach that best aligns with your project characteristics and objectives.
The Benefits of Good Resource Allocation
Getting your resource allocation right pays major dividends, including:
Improved Productivity
Ensures resources can work efficiently on the right tasks. Removes workflow bottlenecks.
Reduced Costs
Eliminates resource overages and waste from poor allocation. Keeps project on budget.
Better Resource Utilization
Increase utilization rates for people and assets. No resources are over or underallocated.
On-Time Delivery
Schedules resources when required to meet deadlines. Prevents delays from lack of resources.
Higher Quality
The right resources complete tasks correctly the first time. Prevents quality issues.
Improved Morale
Good allocations prevent team burnout and overload. Maintains motivation.
Lower Turnover
Retain top talent by maintaining reasonable workloads. Reduces hiring/training costs.
Proper allocations directly translate into project success!
Resource Allocation Challenges
Developing and managing an optimal resource plan has its challenges:
- Uncertain scope and objectives
- Unclear task requirements
- Lack of visibility into resource availability
- Frequent priority and requirement changes
- Stakeholder conflicts over resource sharing
- Cultural challenges with matrixed resources
- Poor communication of allocation plans
- Inadequate tracking and monitoring
- Resistance to change from team members
These issues highlight the need for skilled project managers who can create realistic plans and manage ongoing trade-offs.
Change management and communication skills are vital for securing team buy-in on allocations.
Resource Allocation Tools and Templates
The right tools can make resource allocation much easier. Here are some must-have templates and software:
Resource Planning Templates
Excel templates for identifying resource requirements, availability, and schedules for allocation planning.
Resource Management Software
Online tools for optimizing allocations, leveling workloads, tracking utilization, and making rapid changes.
Allocation Matrix
Cross-matrix of resources vs activities to visualize allocation plans. Helps flag conflicts.
Capacity Planning Charts
Graphs and charts showing resource capacity versus demand. Highlights gaps and overload risks.
Resource Gantt Charts
Visual timelines showing resource assignments across projects. Useful for communicating plans.
Skills Inventories
Databases cataloging team skills, experience, and competencies to match workers to tasks.
Powerful allocation tools are critical for juggling multiple projects and shared resources. They provide the insights needed to create and manage optimal assignments.
Best Practices for Resource Allocation
Follow these best practices to master resource allocation:
- Involve team members in allocation planning – don’t dictate plans.
- Assign resources during early project stages, not “just-in-time”.
- Build in contingency resources to handle uncertainty.
- Use workload leveling to avoid over and underallocation.
- Look at allocations across all projects – not just one.
- Limit multitasking. Better to finish current tasks first.
- Create transparency into team capacity and demands.
- Re-validate allocations as the project progresses.
- Communicate changes clearly and promptly.
Getting allocation right does take work – but the payoff in project performance is massive!
Frequently Asked Questions (FAQs)
Here are answers to common resource allocation questions:
What are the objectives of resource allocation?
- Match resource capabilities to task needs
- Balance team member workloads
- Ensure resources are available when tasks need to be done
- Enable on-time, on-budget project completion
When should resource allocation be done?
Start allocating during project planning, and finalize assignments as the kickoff approaches. Allocate enough in advance so resources can be secured and prepared.
How often should allocations be updated?
Review at least every 2-4 weeks throughout execution. More frequent updates may be needed for complex or fast-moving projects.
Who is responsible for resource allocation?
The project manager develops the resource plan based on input from team members and functional managers who “own” the resources.
What skills are required to allocate resources effectively?
Strong analytical skills, organization, attention to detail, multi-project perspective, and stakeholder management capabilities.
Wrapping Up
Resource allocation is a core project management competency that directly enables project success. Effective allocation requires detailed planning and optimization to assign constrained resources to critical tasks.
With sound allocation principles, proven methods, and the right tools, you can build plans that maximize resource utilization and project performance.
So be sure to invest the time
Free Resource Allocation Templates
Resources allocation requires accurate and timely data to avoid bottlenecks that can slow down your project. Project management software is the most efficient way to manage your resources, but if you don’t have an online resource management tool there are templates that can help. ProjectManager has free project management templates for every phase of your project, including ones to help with resource allocation. Here are a few.
Before you can allocate your resources, you need to understand what’s required. The free requirement gathering template for Word acts as a means of communication between the stakeholders and the project team. This ensures quality deliverables that meet specifications.
You’ll also need to organize your resources before you can properly allocate them. Our free RACI matrix template for Excel is a place where you can define the roles and responsibilities of the team members. RACI stands for responsible, accountable, consulted and informed, and the free template helps you place everyone involved in the project within one of those quadrants.
How to Allocate Resources With ProjectManager
ProjectManager is robust project management software with multiple tools that allow project managers to allocate project resources, track utilization and availability, control costs and deliver project success. Regardless of how you prefer to manage and schedule your resources, ProjectManager has the tools to help you every step of the way. Here are some of our most popular resource management features.
