What Is Resource Management & How to Make it Work?
Every company, big or small has its assets that help to reach the company goals. Resource management is an important part of implementing the organization’s vision and objectives. In order to be able to reach the goals set, it is vital to make the assets available work as efficiently as possible, plan and organize their utilization.
Types of Resource Management
Before we dive into the details of management, let us first introduce you to the types of business resources out there.
Traditionally, all of them are divided into:
- physical resources
- human resources
- intellectual resources
- financial resources
Physical ones include things like equipment that helps to produce your product or provide services, factories, buildings, plants, anything physical that is necessary for your project to happen.
Human power or people that work with you or for you are now considered to be an extremely important component of any business out there. It used to be an underestimated part, but for the past decade, a constant conversation about its value has improved things.
Intellectual resources are the talents within an organization, the expert power of employees that is shared and contributes to the company standard. It also includes patents, copyrights, and other kinds of legal subjects that can support intellectual property.
Finally, the financial side includes cash, credit, and anything that proves the business to be financially capable.
Resource Management System
At this point, we would like to share some of the steps you may take within your company to set up a reliable, repeatable resource management system.
Step one: resource allocation
There are multiple methods of checking the ways they are allocated at the moment: from the internal emails and reports, the managers may share to the official documentation, such as financial reports or statutes of the organization.
Wise resource allocation will most definitely get the most out of the current state of affairs. Knowing your capacities and the skills of your team are key to distributing all kinds of capital at your disposal for efficient project handling.
As the optimization process is never-ending, it is necessary to set the process of writing concise and comprehensible reports across the departments that would provide a crystal-clear understanding of the current condition of the company’s assets.
Step two: resource leveling
This step is connected with the assets that are not used wisely or are not used at all. The purpose of it is to uncover all the blind spots and the unused potential to your advantage.
For example, if you have hired an employee who happens to have more than one expertise and is willing to help other departments, it would be a good idea to offer short training sessions in a different department. This way in case there is an urgent need for extra hands in the mentioned department, this employee can assist and there will be no need to stress the whole team out trying to find a freelancer or hire a new employee for a short-term project.
The best thing about resource leveling is that it is a win-win scenario. The employee from our example will most likely be happy to keep up their skills from different fields and feel empowered as they will contribute to the company in multiple ways. This practice also builds up strong relationships across departments and contributes to the culture of collaboration as opposed to only sticking to the narrow list of responsibilities.
Step three: resource forecasting
This step is about making different kinds of plans concerning your capitals. Based on the first two steps, the plan has to contain a clear vision of how to optimize the present-day state of affairs and use your human, financial, intellectual, and physical assets as efficiently as possible. However, it should also include forecasting based on current risks and statistical prognosis so that the ongoing projects are in a safe place.
Undoubtedly, this step is vital for starting a new project or field of operations. However, it should align with your project charter as well as a deeper understanding of your company’s opportunities, threats, strengths, and weaknesses. This way it will become possible to make more precise predictions and take into account more factors of risks and, therefore, be more prepared in terms of risk management.
The Need for Resource Managers
In many companies, it is a common practice to hire the resource manager (RM) – a person who analyzes the current way the processes work and at what expense every issue is handled. Their task is to see and suggest changes within the organization that could make it more efficient and productive. In addition to that, they work shoulder to shoulder with project managers who know what steps are needed to be taken to make things work and often know what is necessary to make success happen.
This knowledge is shared with RM for the sake of intelligent project resource management as they are the ones to allocate the needed assets, find all that is lacking for any project, and see what can be done. The discussion may include brainstorming whether it is necessary to hire new employees or to teach the existing crew, to invest in a new project, or to expand the current one.
The questions may also be organizational and relate to some practical issues like choosing software to work with and seeing if there is a budget for more expensive programs. In such cases, it is always a good idea to research the possibility to get free programs, and as many budget solutions as possible in order to save the financial assets of the company.
Why Is Effective Resource Management Important
Now that we’ve gone over what resource management is, let’s take a quick look at why do we need to manage our resources, the smart way.
- It helps avoid unforeseen situations. Because let’s face it: most of them are not unforeseen by their nature, they are just unforeseen by us. A crystal clear understanding of where all the capital is going allows us to plan everything more thoroughly: expenses, hiring, expanding, anything. If the current state of affairs is transparent, clearly seen, and so are all the possible gaps, it is possible to solve the problems far before they appear.
- It makes the environment at a working place safe and healthy and prevents burnout. Probably all of us remember those moments when all the work done is about extinguishing the fire in one or several spheres. Wise administration will help to predict raises and quitting of employees, will make it easier to understand the workload, and be prepared for anything that can cause unproductive stress within departments.
- It makes you calm and helps you rest assured that everything that can be done is done. Some projects are doomed from the very beginning because of a lack of assets, some are anticipated and predicted to work out well, and some show a light of hope. Good RM assures that the business is getting the most it can have in any of the scenarios.
- It measures how efficient the project is. Return on Investment is a measurement of extremely high significance. It can be provided by gathering data and being aware of all the losses and gains at every point of the journey.
Resource Allocation: In Closing…
To sum up, it is undoubtedly important to remember about, save and take care of all kinds of assets you have available. Keep in mind the resource management techniques that we’ve mentioned above and try out some resource management software. A good enterprise will always be mindful of its assets, as they can be the power to rely on while growing an organization or starting a new one. While ideas and the impact your business is making are immeasurably great, all kinds of capitals at hand are always specific and ready to help.