Most businesses today are operating with limited resources. Budgetary considerations, labor shortages, and a snarled supply chain all mean that companies must do everything possible to maximize their constrained resources.
Resource allocation can transform business operations, helping teams work more efficiently and reach their productivity goals. Resource allocation is a simple but vital concept: in its essence, it means strategically assigning all available resources to complete every project.
This article will examine the theory and practice of resource allocation. It will also touch on some examples of resource allocation in project management, as well as the implementation process.
What Is Resource Allocation?
Resource allocation is the process of taking stock of all available resources and strategically assigning them so that they perform optimally. It’s closely related to resource planning since it entails taking a data-driven, concrete approach to using resources in relation to project scope. A strong understanding of the project budget, project schedule, and project team is critical for workload management and overall allocation strategy.
Resource allocation is critical in any business, but it is especially important in software development, network security, and IT. The more complex the field is, the more crucial it is that project managers correctly allocate resources. While allocating all resources correctly is critical, it's equally important to identify the right resource.
For example, a team of developers could be allocated to complete a software deployment over the course of the month, but it may be more prudent to spread that work out and allocate your resources more judiciously through resource scheduling so that no other projects suffer.
Along with resource utilization, the resource allocation process is a vital part of resource planning. It's one of the most critical project management tools that contributes to the overall profitability of a project.
Resource Allocation in Project Management
Today, more project managers are adopting a fully data-driven approach to resource allocation, recognizing that this can drive greater productivity.
The allocation of resources starts with a careful assessment of which resources are available. “Resources” is a broad umbrella term that includes human resources and financial resources, as well as tools, materials, and software.
Once the project manager has taken stock of the availability of project resources, they assign those resources strategically, ensuring that every employee is working in the area they excel in to do the best possible job—and so that the project can be completed efficiently. The same strategic approach applies to assigning funds and tools to different tasks.
Trends in IT Resource Allocation
Resource allocation can become a significant challenge as companies scale and remote work becomes more common. Managing decentralized teams can also complicate capacity planning.
According to Vishwas Mahajan, the founder of Whizible.com, project managers are using AI, cloud-based tools, and automation to respond to these challenges. Mahajan points out that AI-driven predictive analytics can accurately forecast a project's resource needs, while cloud-based resource management tools can facilitate collaboration when teams operate remotely.
This dovetails with Gartner's predictions about the top IT trends in 2024. Gartner anticipates greater use of intelligent or business applications that use AI and connected data to improve workflows in every facet of the IT sector. Gartner also predicts a move towards an "augmented connected workforce" or a greater adoption of smart tools to improve workplace analytics and schedule resources. You can expect to see this approach play out in project management systems and resource allocation.
Resource Allocation Examples
Resource allocation is crucial in every industry, but it is imperative to project managers tasked with overseeing technical projects—like software development, mobile app development, and network security implementation. These projects are complex, tend to change quickly, and are at constant risk of scope expansion.
A good project manager knows how to keep these projects on track without scope changes, going over budget, or taking resources from other equally important projects. Bear in mind that "resources" broadly refers to human resources and software, servers, networks, cloud computing, and energy. This piece focuses on optimizing the potential of your human resources, but the tools below can also be applied to any and all of your other resources.
Here are some examples of what resource allocation looks like in technical fields.
Mobile App Development
Mobile app development has many moving parts, making planning difficult. Project managers need the technical expertise and the requisite soft skills, like communication and team-building, to plan for these projects successfully.
For example, a company developing a new mobile app must adopt a strategic resource allocation plan. Such a plan begins with assessing the development team and deciding who has skills in areas like UI/UX design and testing. It also means determining which employees have experience deploying mobile apps.
An effective project manager can assign employees the tasks they’re best suited for based on their experience, knowledge, and availability.
Software development usually entails balancing the needs of multiple clients, all while managing cascading product iterations. Making the software development process run smoothly means juggling labor constraints, time pressures, and finances and being prepared to reassess priorities on an ongoing basis.
To the extent possible, the project manager should look ahead to identify potential roadblocks as well as periods of high demand. This can mean assessing each employee for weak spots and making predictions about shifting client demands. Successful project managers can often predict which elements of a project the client is likely to change their mind about—thus building in extra time and resources to address a course change mid-project.
Creating backup plans and emphasizing agility can help. Processes like resource leveling, for example, may be reimagined as an ongoing process. Resource allocation software can ease this process.
As businesses implement a new or upgraded network security system, resource allocation can ensure that the project gets done quickly, efficiently, and at a reasonable cost.
Successful implementation of network security systems requires both hard and soft skills. Not only is it crucial to implement firewalls, encryption, and intrusion protection, but it is also vital to train every team member in the correct security measures. A good project manager can assign these tasks correctly and create benchmarks to confirm they have been carried out correctly.
How to Allocate Resources
There are a few key steps involved in allocating resources effectively. Although the process differs from one business to the next, every project shares these fundamental stages.
1. Define the Project and Establish Benchmarks
Resource allocation starts with a well-defined project. The project manager must carefully limit the project’s scope to avoid mission creep, which could lead to increased use of resources and disrupt the initial plans.
Part of defining a project is determining the project’s desired outcome and establishing benchmarks. The project manager will evaluate key steps in the process and assess the resources necessary to complete each project phase. They will also consider all the resources required for a successful project—the human resources, the servers, facilities, cloud resources, and whatever else is needed to meet goals throughout the project lifecycle.
2. Determine Current Resource Availability
The project manager should assess which resources are currently available and which will continue to be available throughout the lifespan of the upcoming project. For example, perhaps the team’s most experienced software developer is free now, but she will be busy working on another project in two weeks. Or, perhaps the best UX designer is needed on another project now but will be free soon to work on another project.
3. Build a Plan for Allocating Resources
The project manager will assign personnel based on the available resources to carry out the essential steps identified in step one. At the same time, funds and supplies will be allocated for each project stage. The more detailed the plan, the more effective it will be.
Building some cushion into every project planning stage is a good idea. Often, projects run longer than expected and require more resources than initially thought. Successful project managers will account for potential overallocation. They will also lay out a clear plan for allocation and make it visible to the whole team to avoid miscommunication.
4. Track Resource Utilization
Resource allocation is an ongoing process. Once the project is underway, a good project manager will track resource utilization and monitor whether it meets expectations. If some resources are being overdrawn, the project manager must resolve those issues and redesign the initial allocation plan.
5. Review and Assess
The final step in project management happens when the project is completed. Take stock of what worked and what didn't work. Did the team have all the necessary resources, or did the initial resource allocation need to be adjusted? Did the team meet its projected timelines? Did they stay on budget?
The answers to these questions can help maximize client satisfaction, avoid scope creep, and drive more effective resource allocation decisions for the next project.
Resource Allocation Tools & Software
Several software tools can take the guesswork out of resource allocation. Modern resource allocation software is data-driven and, in some cases, powered by AI for a smooth, intuitive, and effective process. The following are some of the best project management software tools on the market that help organizations outline overall resource allocation.
Mosaic is powered by artificial intelligence and designed to integrate smoothly with existing software. The tool analyzes historical data and automatically generates resource allocation plans based on team availability, project tasks, and detailed forecasting.
The tool is so detailed that it can even recommend which employee to assign to each role. And, like most AI, Mosaic continues to learn on the job, so it will get more effective the more frequently it is used.
Resource Planner is a great choice for anyone managing multiple projects with a large number of employees. It stands out for its forecasting capability, which helps project managers anticipate upcoming projects and plan their resources accordingly. A convenient dashboard also groups together all ongoing projects and team members, providing visibility into current operations.
Resource Planner has solid budgeting and time-tracking tools so that project managers can monitor whether each project is staying on track – and make any adjustments as needed.
Runn excels at giving managers a big-picture view of every project. The resource management software lets users see every employee’s schedule and availability at a glance. The tool’s forecasting and scheduling abilities increase visibility into project length and cost while allowing decision-makers to quickly view or change personnel assignments.
Runn is easy to learn and implement. It’s a great choice for anyone juggling multiple projects simultaneously since it provides a broader view of the organization.
Hub Planner lets you view schedules, list project benchmarks, and assign employees to specific tasks. But the tool stands out for its resource tracking.
Hub Planner’s features make it easy to track resource utilization after a project gets underway. Its robust reporting feature provides data-driven insights into ongoing resource use while also tracking time sheets and vacation requests.
Hire Project Management Professionals for Dynamic Resource Allocation
When you manage distributed teams, it’s important to use strategic planning to allocate resources effectively. Efficiently planning, conceptualizing, and overseeing projects can help teams stay on track, create the best possible deliverables, and even reduce costs. This process does come with some challenges.
Revelo can help your teams meet these challenges and overcome them.
We match businesses with developers with the right skills to stay on task and appropriately manage their resources. Our developers are rigorously vetted for technical skills, soft skills, and English proficiency. That means that they have the technical skills—and the communication skills—to be effective members of any project.
At Revelo, we handle every onboarding aspect– payroll, benefits administration, taxes, and more. Ready to get started? Contact Revelo to learn how we can support more effective resource allocation and efficient teams.