Putting the strategy in resource management - Part 1 of 3Digital Project Management
Resource management is an area of project execution that many organisations struggle with. The fundamental need to have the right people in the right place at the right time is difficult to consistently meet. There are many reasons for these difficulties, but organisations often create an environment where challenges are more likely to occur simply by not being strategic enough in their approach to resource management.
When organisations conduct their annual planning and project selection processes the result is a series of new initiatives that commit significant project resources for the next year or so. In addition, resources are being committed within operational areas of the business to manage and operate the outputs of those projects – support resources for new systems, sales staff for new products, etc, etc. Effective resource management requires alignment between those commitments – both project and operational, and the actions taken to meet evolving resource needs – hiring, contracting, training, and so on. That’s what I want to look at in this article.
A strategic resource management approach fully integrates resource planning and management into the annual planning and project selection process. That includes three distinct elements:
- Resource loaded business casing – consideration of resource needs when developing business cases, including ability to find, hire and retain specialist resources.
- Portfolio modelling – looking at the resource impacts of a particular mix of projects compared with another. This should include capacity and capability planning considerations
- Detailed resource planning – a full plan for addressing resource needs throughout the portfolio lifecycle, integrated into the individual project plans for the initiatives within the portfolio.
Let’s look at each of those in more detail.
Resource loaded business cases
A business case is intended to be an objective summary of the major elements of a proposed initiative, with a particular focus on the ability of that initiative to generate a satisfactory return on investment (ROI). When a project requires specialised resources, either for project execution or to support the product or service after project completion, there is the potential to undermine that ROI.
Most business cases will include an estimation of project costs, and that may well include standard resource costs, either in terms of money or effort. However, not all resources are created equal. If a project requires a specialist function then the costs will be relatively higher than if more general roles are needed. If the specialist role exists within the organisation there will likely only be one or two people with that accountability so they need to be focused on areas where the biggest return can be secured – assigning them to lower value work will have a serious opportunity cost. The business case must accurately reflect the need for those specialist roles, and the return that the initiative can generate, in order to allow for appropriate decision making around approvals.
If the required resources aren’t available within the organisation then things become even more complex. Specialist functions must be sought in the marketplace and recruited, either on a temporary or permanent basis. That may require working with a vendor if the skills are not readily available within the market, and will likely involve a cost premium which must be factored in to the ROI calculations. This approach adds risk to the impacted initiatives and that must also be used as part of the determination over whether the business case justifies the investment.
For post project resources – those needed to support the project outputs in production, the considerations are the same, but the decision becomes more complex. Resource needs may not occur for several years, and may continue for a number of years beyond that point, requiring projections of resource availability and cost that extends for potentially up to a decade. These must therefore be reflected in the business cases with a reflection of the uncertainty associated with them and the related risk that exists for the project downstream.
It should be obvious that this level of detail in business cases requires involvement from organisational HR functions. By ensuring HR has an active role in supporting and validating resource related projections in all business cases we help to create a ‘level playing field’ for those business cases. There will still be many assumptions, and those assumptions will inevitably be flawed, but we will have a better ability to consider the relative costs, complexity and difficulty of supporting the resource needs of the different proposals. That provides valuable information to the next stage of the process, portfolio modelling.
Read more of this in part 2.