Resource management

Resource management: What is resource allocation?

September 13, 2023
4 min
Resource management: What is resource allocation?
Agathe Placet
Content manager

A project reflects the resources allocated and the way in which they are used. Budget, time, personnel and skills: all these parameters count, but in different proportions depending on the project you wish to deploy. 

This is where your Resource Allocation process comes in. 

Discover the importance of optimal resource management for your consultancy and the steps you need to take to design a strategic and agile resource allocation process. 

What is Resource Allocation?

Resource Allocation aims to maximize the use of limited resources (time, financial funds, personnel, etc.) to achieve specific objectives. It is an essential element of project management and strategic decision-making. 

To optimize this process, you need to consider resources in their entirety, for example : 

The challenge is not limited to identifying resources. For your consulting firm or IT services companies (Digital Services Company), the multiplicity of projects of various kinds, short, medium or long-term, is an additional imperative to take into account. 

Some projects require highly specialized skills (e.g. ERP system implementation), while others call for cross-functional know-how (e.g. a digital development project for an SME).  

Correcting a resource allocation error is not simply a matter of making a few calls to your consultants to change their assignment to a particular project. Correcting a misallocation may require you to review the entire project structure, and thus inevitably affect your customer relations. 

The importance of Resource Allocation should not be overlooked. 

How to limit uncertainty with Resource Allocation?

Effective resource management is not only a matter of organizational common sense, it is also crucial to your firm's long-term profitability and competitiveness , for the reasons we have outlined above.

The wrong allocation of resources can have serious consequences for your business:  

It can also create a vicious circle. Take the example of IT services companies , which specializes in mobile application development. The teams of developers have skills that can be mobilized for all projects. But if one project falls behind schedule (because, for example, the number of developers required was underestimated), this has a snowball effect on other projects. 

Finally, the distribution of resources directly affects the company's financial results. 

Managing and distributing resources is a complex process. The company has to take into account many variables in addition to raw resources. For example, for a consultant, it's not just a question of skills, but also affinities with certain types of project, career aspirations, etc., that are important. 

Consulting firms and IT services companies also face uncertainties : deadlines, changes in the scope of the assignment, fluctuating customer requirements are all factors likely to impact on resource management. 

After everything we've just told you, you might almost forget that resource management is actually a real opportunity for your consultancy. Projects are delivered on time, capital is better used, and so on. The quality of deliverables is improved, and customer satisfaction rises.

But these benefits don't fall from the sky, and require you to define and follow a well-defined process.  

4 steps to a successful Resource Allocation

1. Identify and prioritize resources

The first step you need to validate is to exhaustively map the resources available, such as hardware, the time available for your consultants and the budget. In the specific case of assignmentyou need to go beyond simple availability to also understand the specific skills, levels of expertise, and other projects to which each resource is already assigned.

Once you've identified these resources, you need to allocate them strategically to the various projects. Some have tight deadlines, others require rare skills, others are critical to sales, and so on. 

To do this, use your Key Performance Indicators (KPIs). They will help you prioritize the distribution of resources to the most important or urgent projects.

2. Validate resource allocation plan

If there's one thing your firm has in common, it's that the absence of team coordination is fatal. It's impossible to have an all-knowing view of resources, needs, projects, etc. You must therefore create the resource allocation plan in consultation with the various stakeholders. These may include department directors, project managers, and sometimes the customers themselves. 

Thanks to stakeholder feedback , you'll be able to make adjustments and validate the Resource Allocation plan. 

3. Rebalancing resources

Flexibility and resilience are essential features of any good resource allocation

Many unforeseen events can have an impact on the smooth running of a project : delays, sudden unavailability of a consultant, changes in company or customer priorities, etc. 

So you need to be agile, so you can quickly redeploy resources if a key resource is missing in the future. 

4. Optimize resource allocation with dedicated tools

Numerous tools facilitate resource management. Small teams often use freely downloadable matrices, such as the Gantt matrix. For small-scale projects, this is an indispensable tool for visualizing deadlines, relationships between different tasks, and so on. It's a simple way of keeping track of project progress and ensuring that resources are correctly allocated. 

However, this type of technique has its limits when it comes to large teams. When projects (and resources) pile up, this graphic representation quickly becomes unreadable and counter-productive. 

It is therefore advisable to opt for a Resource Allocation software. This tool offers an intuitive interface for obtaining an overview of different resources, current projects, etc. 

Just think of assignment software. This system is designed to take many factors into account, such as the availability of consultants, their skills and professional ambitions, and so on. 

In most cases, this type of dedicated tool offers access to a centralized, connected platform, providing you with real-time updates on resource availability, fluid information and consistent communication between the various stakeholders. As a result, resources are more likely to be deployed on time(resource scheduling).

To remember

Resource Allocation is vital for companies, especially consulting firms and IT services companies, who manage a large number of projects. Staff availability and skills, available capital, existing tools, etc. all need to be considered to ensure efficient deployment of resources. 

To do this, it's crucial to identify the different resources at your disposal and the needs of each project, so you can deploy them at the right time(resource planning). You need to proceed strategically, in consultation with your teams, and react quickly to unforeseen circumstances. A dedicated solution, such as assignment software, helps you to control resource allocation and its myriad parameters, considerably increasing your chances of succeeding in your missions and, by the same token, your customer relations. 

See you soon at Napta! 

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