Successful Resource ManagementThe Step-by-Step Guide
Today’s Most Significant Resource Management Trends and Challenges
It’s a process that’s alive and never stops. In addition to staffing projects to meet the needs of the client and their desired outcomes, a resource planner also has to keep one eye on the financial targets of the business, maximizing utilization rates and hitting margin targets.
Yet, while it can feel daunting, there is a set of best practices that have emerged that will help you improve control and tackle the challenges of resource management head on.
The next few chapters will provide actionable tips so you can develop a plan to capitalize on current trends and the latest thinking in resource management.
IN THE NEXT SECTION
We will provide tips to improve the most important metric in resource management— utilization
4 Steps to Improve Your Utilization Rates
Increase billable hours and increase revenue.Utilization rate is a metric used in professional and creative services to reveal your employees’ efficiency and productivity, which is based on the percent of time spent working on productive activities.
Most services organizations monitor two types of utilization: total and billable.
- TOTAL UTILIZATION
This metric measures the percent of time your paid resources spend on any productive work, including business development and proposal-writing.
- BILLABLE UTILIZATION
This metric is the percentage of a paid resource’s time you can bill to clients. Billable hours reflect time spent specifically on revenue-generating activities (i.e., project tasks, client meetings).
Billable utilization rates in particular are critical for services organizations. The more billable hours, the greater the potential revenue that can be generated from those hours. Also, the greater the billable utilization of a given resource, the more margin you’re able to generate from that resource. Utilization can, therefore, have a significant impact on both your top and bottom line. For a 100-person services team, increasing billable utilization by one hour per week, per person, at an average realized bill rate of $200 per hour increases annual revenue by $1M.
The demand for resources usually starts in the sales department. Visibility into an accurate pipeline is critical for the appropriate allocation of resources. If you know what is coming beforehand, you will be able to manage your supply against demand and get the right resources on the right projects at the right time. As such, it is critical for businesses to have a well-designed integration platform that connects your Customer Relationship Management (CRM) solution to the solution you’re using for resource management, providing the insights needed for accurate planning.
In very well run organizations, resource managers participate early in the sales process. They help plan and scope out projects before submitting to clients; providing input on timelines for delivery of projects based on resource availability, as well as the best resources for each project based on skills.
Progressive resource managers also automate the creation of projects within their services delivery technology platform during the sales process. They automatically create a project when a certain sales stage is reached, creating alignment with the teams generating new business. This allows resource managers to begin scheduling out far enough in advance to either staff or hire for an upcoming project.
Great resource managers are incorporating skills tracking information into their systems and planning process and for good reason. This allows you to staff the absolute best resource for the job. As work increasingly requires highly specialized skills, detailed skills tracking will be required to effectively manage your resource pool. Without a clear way to determine which skills your business has in your resource pool and which skills will be needed to complete upcoming work in the sales pipeline, resource managers will be unable to proactively address skills gaps through hiring and training and will be blindsided by discrepancies that impact project timelines and client satisfaction. Incentivize your teams to maintain their skills profiles in order for them to land the next great assignment they are seeking.
Sharing resources is the practice of leveraging different types of roles across multiple parts of the same organization. It has become easier in the age of remote and off-site project delivery. Shared resources are by definition more highly utilized across larger teams. Oftentimes, these resources can become very efficient in executing repeatable tasks. They are also typically in lower cost locations, which helps you bolster both utilization and margins.
You can take advantage of this type of sharing by centralizing resource management across teams, offices and even geographies. You can also leverage your internal global network, or build one through partnerships, so you can tap into a global resource pool. Once you achieve this, you can effectively scale up (or down) while protecting your employees from either burnout or reductions in force.
Help your new hires be successful, for both their personal goals and your company’s goals. While it may be tempting to throw your newest resources directly onto projects so they can start generating revenue, consider a three-month boot camp program to help new hires ramp up and build their skills. Resources who attend boot camps have been reported to shave 14 months off from the time they start to when they reach 100% of utilization goals.
One highly successful professional services organization recently revealed that before instituting their Boot Camp, resources took 12 months to achieve 60% utilization and 18 months to achieve 75% utilization. However, the cohort of resources that started with a three month Boot Camp took only 4 months to achieve 75% utilization.
Is your employee incentive plan encouraging collaboration? One of the best ways to do this is to include a team goal, such as revenue attainment, in addition to an individual utilization goal. This keeps team members focused on getting a project done in the most efficient manner and more quickly get to the next project to help achieve your revenue goals (and get their bonus).
IN THE NEXT SECTION
Do I have an effective resource strategy?
The best resourcing strategies today enable managers to quickly tap trusted networks independently, at speed and scale. Here are three ways to determine if you have an effective resourcing strategy that will set your organization up for success:
YOU CAN DYNAMICALLY SCALE UP AND DOWN BASED ON DEMAND.
Part of the challenge with effective resource management today is the speed of work. We can only expect the trends of quicker kick-offs and shorter client engagements to increase in the future. If a client comes to you with a new project, how long will it take you to pull together the right resources? This needs to be days, not weeks.
YOU TRUST THE TALENT YOU ARE TAPPING.
It’s natural to turn to third-party companies that provide quick access to contractors and freelancers to help fulfill specialist needs. However, the risk is you haven’t worked with these people before and you don’t know anyone who has. They are often ranked by volume of work completed, not quality. Moreover, you don’t know who is ranking them. It is paramount that you develop a network of sub-providers that you trust to uphold your standards of work.
YOUR MARGINS IMPROVE.
If your resourcing strategy involves hiring, training and onboarding all new talent, your margins are going to take a hit. It will take months before your new resources are able to hit target utilization rates. An alternative strategy is to develop relationships with sub-providers and contractors that you can tap to fulfill incoming demand. A network approach allows you to leverage resources needed for very specific projects without the downtime on the bench that will erode your margins.
Mastering Resource Management
The steps discussed within this eBook will help you more effectively staff projects, balance the competing staffing priorities that every business experiences and develop a capacity plan that can keep projects moving forward. Remember, mastering resource management is a continual process.
After implementing the steps we have detailed here, resource managers must continuously learn about their team’s skill sets and the skills needed to deliver each project type offered by their business, be organized and prescriptive in all data entry they are in charge of and be aware of the management and delivery teams’ goals for utilization and staffing.
By improving how you deploy your resources, increasing your company-wide utilization rates and effectively using a distributed workforce, resource managers can quickly experience noticeable improvements within their organization. The long-term result is a more profitable and successful approach to doing business only made possible through thoughtful, strategic improvements.