Investments in resources are among the most costly that a business can make. Volatility in the market can lead to shortages of resources, making it necessary to engage in resource planning and make the most of available human capital. Smart resource planning, suitable scheduling, and ensuring staff engagement and satisfaction levels are all part of efficient resource management. However, the productivity, performance, and profitability of a project can all benefit from resource managers employing sound methods in resource management and planning. Shortcutting this process and failing to make a timely choice, however, will have a negative impact on the organization’s business purpose. In this article, we explain the types of resource planning, examples, and what an enterprise resource planning system is all about.
What Is Resource Planning?
The term “resource planning” refers to the process of allocating team resources, or people, to tasks. It guarantees the project’s completion without hiccups or disagreements and with all the desired results. There is no absolute right or wrong when it comes to planning resources. What’s right for one group may not be optimal for another.
Although it may seem straightforward at first glance, resource planning is actually quite difficult. Careful preparation is required to ensure that tasks are assigned to the appropriate people without disrupting the progress of the project. It is in this context that software like eResource Scheduler, which helps with resource scheduling, becomes indispensable.
Get rid of guesswork when allocating resources and see how much more productive your team becomes.
If you manage projects in an agency, consulting firm, or information technology company, you know how important resource planning is. However, similar to its popular sibling, capacity planning, resource planning is frequently misunderstood, underestimated, and underutilized.
Good resource planning improves productivity, lowers costs, and reduces costly bottlenecks for professional services firms.
Why Is Resource Planning Important?
It is impossible to exaggerate the value of careful resource planning. Managers of projects should be adept at shifting resources to where they will have the most impact. And this is not possible without proper methods of resource planning. Otherwise, you’re flying blind, with no idea of how or when to reshuffle resources for maximum effect.
McKinsey’s study, “How nimble resource allocation can double your company’s value,” analyzes the results of shifting financial, human, and managerial assets. It revealed that 83% of CEOs and C-level executives cited resource reallocation as the single most important factor in driving business expansion.
The ‘talent’ element of the equation is one of several factors that contribute to the expansion of a company. Your company can benefit from resource planning by doing the following:
- Boosting communication with customers and other important contacts
- Predicting future project success by knowing your available resources
- Boosting productivity and cutting back on ‘idle’ or unproductive assets
- Making the most of what you have to achieve your goals is called resource optimization.
- Improving morale on the job and keeping employees around
- Approaching tasks in a deliberate, thoughtful manner (rather than randomly).
Furthermore, an efficient resource planning procedure can ascertain the optimal combination of resources needed to finish a project in light of its demands, which are affected by three elements: the project’s requirements, its restrictions, and its opportunities.
Good resource planning also reveals potential areas of incompatibility. Keep in mind that this is in addition to helping you do the task on time and under budget.
Types of Resource Planning
Here are the top 2 types of resource planning.
#1. Multidimensional Resource Planning
The use of multidimensional planning enables several resource groups to coexist within a single resource plan. It enables more granular resource allocations for applications, which in turn leads to an increase in resource usage. Also, it is able to accept multidimensional resource allocations, where each allocation can request varied amounts of different sorts of physical resources, including but not limited to CPU cores, RAM, and the number of disks. Within the same cluster, you are able to apply multidimensional resource planning in conjunction with slot-based planning.
#2. Slot-Based Resource Planning
Slot-based planning enables you to work with one resource group per resource plan, to set your owned slots for each consumer until the balance for each consumer branch in each time period is suitable for your requirements, and to specify the share ratio that applies across consumers operating at the same level in a single branch.
To interact with slot-based resource planning, navigate to the Resources > Resource Planning (Slot) menu option on the cluster management console. From the cluster administration GUI, you may also switch your current slot-base plan over to a multidimensional one.
What Are the Five Steps of Resource Planning?
To maximize output, companies with more than 50 contributors need powerful, yet simple, software for managing these assets. Is your company trying to find practical ways to improve its resource management? The five steps of resource planning and some thoughts on how to incorporate them into your present workflow are outlined below.
#1. Strategizing
You need to take the time to examine the project portfolio before you can even begin to think about your available resources or where each one can contribute the most value. What does the work look like? Which projects have the utmost importance in the eyes of the leadership?
Furthermore, you need to make sure that you are creating relationships with the team that manages your portfolio if you want to be aware of the impending work that will be assigned to you as a resource manager. These connections will be beneficial to you throughout the entirety of the resource planning process.
#2. Planning
Once the portfolio is grasped, the requirements for the various resources may be determined. Work with the portfolio project team to determine who will be involved and what skills they’ll need to succeed in their positions, regardless of when the project is scheduled to begin.
To motivate the team to give careful consideration to their own requirements, early planning is essential. Identify the relevant functions and expertise, then optimize your resources’ strengths for the project.
On the other hand, if this is a last-minute strategy, you’ll want to get to work as soon as possible to precisely and thoroughly determine the roles required so that you can realistically analyze the availability of those positions and make adjustments as necessary. If you have more time, you can explore more possibilities.
#3. Preparing for an Execution
When the portfolio is complete, then the real fun can begin! It’s time to divide up the workload amongst team members and allocate the available resources. This is where your skills as a manager of resources may really show. Resource management involves balancing available resources with urgent requirements and then using people’s skills to their fullest.
#4. Implementing a Portfolio Strategy
The change from planning hypotheticals to managing actuals occurs when resources have been allocated to the best of one’s ability and the project portfolio has begun. Is the amount of time spent on a project increasing? Is there a need to reallocate resources because new, higher-priority projects have come up at the last minute?
Change is something we know is coming, but it’s difficult to prepare for until it really occurs. Keeping an eye on portfolio performance requires constantly adjusting your resource allocation and testing out what-if situations.
#5. Evaluate
Consider your database to be a treasure trove. After the job is done, comparing the forecast to actuals is a crucial step in getting ready for what’s next. Consider the forecast’s accuracy, determine what was out of your control, and use that knowledge to improve future strategies.
That’s why it’s crucial to have a system for managing resources that can generate comprehensive statistics. Decisions must be driven by analysis of historical facts. You can use Tempus Insight+’s predictive analytic features, for instance, to ensure that you never overlook any relevant information lurking inside your data. With over 100 controls for visualizing data, you can be sure it’s telling the right narrative.
Regardless of where they are at the outset, any company can make great progress toward resource management maturity by following these five steps. A resource manager’s ability to match resources to projects for optimal productivity and best value outcomes depends on the depth of that manager’s grasp of the pool of available resources.
Resource Planning Example
It’s challenging to gain objectivity when you’re embedded in the details of a scenario. So, put aside human resources for a moment and consider tractors.
Let’s say you’ve got a job that requires you to hire a tractor. The day you want to begin utilizing it should be the day you take delivery. And it’s important that you get it back to us as quickly as possible. If you don’t, you’ll end up spending money even if you’re not making use of it.
Rather than letting the tractor sit idle while you wait for the next tractor-critical task, you will likely reschedule these tasks for when the tractor is available.
The same holds true for your organization’s people resources.
If you do a good job of allocating resources, you can make sure that employees are working on the proper things. Both productivity and profitability are boosted as a result. But if you make a mistake, you might expect to spend more than you intended. Also, read RESOURCE ALLOCATION IN PROJECT MANAGEMENT: All You Need To Know.
How Does Resource Planning Work?
A resource management plan, or RMP, is a document or instrument that lays out how an organization plans to allocate its available resources as the project advances.
To effectively complete the project, the plan may detail the procurement and allocation of resources like labor, tools, and real estate. Items that may come under this heading include the processes for resource planning and monitoring, the key persons in charge of project resourcing, and a full inventory of all resources known to be necessary for success in finishing the project.
Also, the team’s approach to managing its resources should be shared openly and often updated as the project develops. This document should act as the final authority on what resources have been used up to this point in the project’s timetable and what resources will be needed for the length of the project, allowing project managers to make informed decisions.
The specifics of a project’s resource management strategy will determine its depth and breadth. The following, however, is typically seen in a plan for managing resources:
- Resources: The backbone of any good strategy is a detailed inventory of all the tools and materials at your disposal. Due to the frequent sharing of resources between projects, this list might be generated at either the portfolio or business level. The availability and utilization of resources can be better understood with the help of management charts.
- Cost: The paid rate to the customer can be tracked by project managers, in addition to the direct cost of the resources to the business. Managers of projects can keep track of employees’ hourly wages in order to calculate payroll costs.
- Availability: To avoid setbacks and resource conflicts, knowing which resources are available is crucial. For tangible assets, factor in ordering lead times and other resource limitations.
Enterprise Resource Planning
As businesses expand, they reach a tipping point where spreadsheets can no longer keep up with the workload. Software like enterprise resource planning (ERP) can help businesses stay lean and efficient as they grow by collecting and organizing crucial data. Even if most businesspeople are familiar with the word “ERP,” they might not understand the full potential of enterprise resource planning for their companies.
However, modern enterprise resource planning (ERP) systems are far from simplistic, bearing little similarity to their forerunners of decades past. Intelligent automation, improved efficiency, and real-time insights are now available throughout the company thanks to its cloud-based delivery and the utilization of cutting-edge technologies like artificial intelligence (AI) and machine learning. Modern cloud enterprise resource planning (ERP) software provides businesses with the cooperation, agility, and speed they need to be successful by linking internal operations with business partners and networks around the world.
What Is Enterprise Resource Planning?
ERP, or enterprise resource planning, is an application that automates company activities and gives insights and internal controls by drawing on a centralized database that aggregates inputs from accounting, manufacturing, supply chain management, sales, marketing, and human resources (HR).
Every company has to perform tasks that include a wide range of people and roles. However, this becomes difficult when data required to carry out operations and make important decisions is dispersed among siloed databases. Employees have a hard time locating and, in some cases, not having access to the data they need, whether it is stored in basic business management software or spreadsheets. For tracking costs, for instance, the accounting and FP&A departments might maintain separate spreadsheets with conflicting data.
It becomes increasingly difficult to keep everyone on the same page as a company expands and productivity and collaboration suffer as a result of the use of several, incompatible data sources. Since there is no one repository for all critical corporate data, employees often waste time searching for documents and may even perform the same tasks twice. Because of this, it’s more challenging to understand the interconnected nature of the various factors influencing your company.
This issue is addressed by an enterprise resource planning (ERP) system, which stores data in one place for easy access across departments. In addition to resolving issues caused by data from several sources, this allows the user to do what-if analyses, identify opportunities for process enhancement, and achieve significant efficiency gains. Since less time is spent on data discovery, costs are reduced and productivity is increased.
Why Is ERP Important for Businesses?
Businesses that care about efficient resource management now must have enterprise resource planning systems. They can assist top-level management in reallocating resources or developing fundamental operations that are more efficient and cost-effective.
When it comes to making plans and coordinating with others, an enterprise resource planning (ERP) system is helpful as well. Workers may view granular information about what customers have ordered and what’s in stock, as well as purchase orders from suppliers and projections of future demand. They can make changes to prevent issues if necessary. An enterprise resource planning (ERP) system boosts teamwork and communication since employees may view the progress of other divisions for reference.
In addition to being a central repository of information, an enterprise resource planning system offers a wealth of insightful reports and analytics. ERP’s ability to transform raw data into visually appealing charts and graphs that highlight patterns and facilitate the modeling of potential outcomes is highly valued by top-level management.
How Does an ERP System Work?
In order to function, enterprise resource planning systems adhere to a strict, standardized data structure. When data is entered into one division, it is immediately accessible to other authorized individuals in the company. This standardized format is useful for keeping everyone on the same page. Take the case of a regional food distributor with several branches that frequently share resources, such as inventory and employees. Quality, sales, and personnel data are all tracked in a logical way within the enterprise resource planning system.
Then, the real-time information is integrated into the company’s workflows and procedures. Operations can ensure personnel levels are in line with traffic patterns, and management can see if one location is considerably better at avoiding spoilage than a sibling site a few cities over and attempt to figure out why. Finance can assist CEOs decide whether to combine by comparing sales to rents.
When a corporation has modules for each major business function and ensures fast, correct data entry, that’s when ERP systems really shine. And the more people who can benefit from this information, the better.
An enterprise resource planning (ERP) system can usually be integrated with a company’s various business systems to allow for the seamless transfer of data. In addition, this real-time information is then possible to apply to any process or workflow in the ERP instance.
key Benefits of ERP
The various benefits of a successful enterprise resource planning system depend on the specifics of the system’s implementation. For instance, on-premise ERP has some advantages that cloud ERP does not. However, there are six significant advantages shared by all cutting-edge ERP systems today:
- Less risky: Increase company transparency and management, meet all regulatory benchmarks, and safeguard against any threats.
- Boosts Productivity: Information on customers, suppliers, and partners can be accessed quickly and easily thanks to ERP systems. As a result, we have happier customers and more satisfied workers, as well as faster response times and higher levels of accuracy. In addition, as a company becomes more efficient, many of the costs associated with running that business go down.
- Improves Teamwork: Departments have a greater ability to work together and share information; a cooperative workforce can boost productivity and morale by helping workers understand their role in achieving the company’s goals. In addition, time previously spent on routine, manual chores is freed up so that workers can focus on more significant projects.
- Flexibility gains: Effective operations and timely access to relevant data allow you to seize opportunities as they arise.
- For easier IT: You may streamline IT and make everyone’s lives easier by switching to ERP apps that work together and share a single database.
- Strengthens Reporting: Better visualization of real-time data from a central repository can be useful for some firms. Companies can better plan, budget, and forecast their operations, as well as update interested parties like shareholders, when their reports are accurate and comprehensive.
What Are the Key Elements of Resource Planning?
Capacity planning, demand forecasting, and responsibility are the three elements upon which a resource planning strategy is built. Managers of projects must be aware of both the company’s production capacity and the demand from customers.
Conclusion
In conclusion, resource planning is used in project management to assign and keep tabs on available resources. When companies have a strategy for managing their resources, they are better able to respond to and recover from setbacks. The Digital Project Manager is a must-read for anyone interested in learning more about the ins and outs of project management.
Resource Planning FAQs
What are the advantages of resource planning?
- Reduces expenditures
- Helps provide superior service to customers
- Saves time
- Boosts Effective Resource Allocation
What is a resource planning tool?
Resource planning is a type of tool used in project management that assists with organizing and allocating available resources. Also, you can see which resource is working on which project at what time and for how long.
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