Process Improvement

How to Calculate Effective Resource Management in Complex Projects

Written By: Ray Waldron
May 3, 2024
10 min read

Proper resource allocation is the foundation of successful project execution, especially if you handle complex project management that involve a degree of uncertainty and unpredictability. Ensuring teams have access to the right resources at the right time can minimize risk and improve workflow efficiency. But allocating resources when you're dealing with a labyrinthine network of teams, suppliers, and stakeholders isn't without its challenges.

Each project needs a well-defined resource plan that aligns needs with resource availability, project timeline, and budget. Calculating resource requirements is critical for avoiding bottlenecks and developing alternative approaches to allocation if a problem occurs.

When you know how to calculate resource allocation and apply the data to project management, it's easier to manage risks and enable projects to continue without interruption.

What is Resource Allocation?

Resource allocation in project management involves the strategic use of time, money, and manpower to maximize efficiency and meet project goals. It requires careful planning to ensure every task and phase is well-resourced, crucial for the success and timely completion of complex projects. Effective resource allocation is key to managing constraints and prioritizing tasks to support the project's overall objectives.

Understanding Resource Allocation in Project Management

Resource allocation involves sourcing and distributing resources across project tasks and timelines. The more complex the project, the more people, time, finances, equipment, and supplies you'll need to complete it. Complex projects also involve more risk, which requires careful forecasting and planning to mitigate.

Learning how to calculate resource allocation percentage accurately helps you visualize the resources you'll need for a project. For example, if a two-week manufacturing project requires 100 combined work hours to complete, and the assigned team has 150 combined billable hours per week, the team will need to spend 33% of their time on the project to complete it.

Of course, project management is rarely that straightforward. No resource, human or otherwise, operates at 100% efficiency all the time. Resources are also typically spread out across several projects simultaneously, meaning availability varies according to project timelines. So if the manufacturing team is already using a portion of their time on other tasks, they may not have enough hours available to meet an additional deadline.

Calculating resource allocation percentage in advance allows you to check project requirements against current resource use to determine availability. This shows whether it's possible to complete the project on time and within budget using the resources you have or if more people, equipment, or supplies are required.

How to Calculate Resource Allocation

Calculating and planning resource allocation is like being a reporter. You need to determine who and what is required for the project, when and where those resources will be needed, why you're assigning them, and how you'll bring everything together.

To answer these questions, it’s essential to plan how to do resource allocation in project management. Follow these steps in advance to create a blueprint to follow throughout the project:

  • Identify required resources. Refer to the project plan to determine the amount and types of resources you'll need. Consider resource demands across the project as a whole, then drill down to the task level to clarify exactly when each resource must be available for successful task completion.

  • Manage resource conflicts. Compare resource needs to current use. If critical resources are unavailable, consider alternatives that will enable you to move the project forward with minimal impact on budget or timeline.

  • Determine where to obtain resources. Complex projects may require a combination of internal and external resources. Evaluate internal resource availability first, keeping efficiency and reliability in mind. Then, leverage external support to fill gaps as needed.

  • Consider potential issues that could affect timeline and resource availability, such as equipment breakdowns, shipping delays, or employee absences. Be mindful of events like vacations or federal holidays that could affect employees' and vendors' schedules.

  • Be prepared to reallocate resources. Whether issues arise or project needs change, you may have to shift resources to other tasks or adjust task order to prevent delays.

How to Show Resource Allocation in Excel

Spreadsheets can be helpful in resource planning and management in some projects. Excel (and its Google equivalent, Sheets) is an accessible and inexpensive option for keeping track of project details and determining how to solve potential resource allocation problems.

With Excel, you can:

  • Create a resource inventory with details like type, name, availability, and cost

  • Record project details relevant to resource needs, such as timeline and budget

  • Document project tasks, who they're assigned to, and when they need to be completed

  • Correlate resource needs with task requirements

  • Apply conditional formatting to highlight critical project and resource information

  • Create filters and pivot tables to visualize resource data like employees and supply availability

  • Use formulas and charts to forecast resource use and identify potential conflicts or bottlenecks

  • Visualize different resource allocation scenarios to determine the most efficient approach

  • Leverage macros to automate reports for regular insight into resource use throughout a project

Showing resource allocation in Excel can work well for small teams and simple projects. But the risk of errors from manual data input, transfer, and updates can create confusion as project complexity increases. Tracking resources across multiple projects can become difficult, which may lead to allocation problems and task delays.

How to Allocate Resources in Project Management

A robust project management platform enables you to forecast resource requirements, track resource use for large project loads, and generate reports to guide future plans. These solutions provide the flexibility to experiment with allocation methodologies and determine the best solution for your most complex projects.

Several common approaches to resource allocation planning offer frameworks for applying data from project management tools:

  • Critical path separates critical and non-critical project tasks to enable strategic prioritization. Team members start with tasks that must be completed before other tasks can begin, which minimizes conflicts and delays.

  • Critical chain zooms out to the bigger picture to consider tasks and resources in the context of the entire project. This approach emphasizes resources and incorporates buffers to allow flexibility in resource use. Team members are encouraged to emphasize efficiency and only use buffers if absolutely necessary.

  • Resource leveling modifies a project's schedule to accommodate changes in resource availability. Tasks may be lengthened, shortened, or moved around, which may impact project deadlines.

  • Resource smoothing adjusts resource use and availability to ensure deadlines are met. This may require bringing on more resources if internal resources are at capacity.

  • Prioritization matrices score tasks based on prioritization criteria, such as industry regulations. These visual tools highlight the highest-priority tasks to inform strategic resource allocation.

Solving Common Resource Allocation Problems

Allocation methodologies aim to minimize risk and mitigate problems, but complex projects are rarely without issues. Ninety-one percent of project managers say their organizations face project management challenges, which means you'll likely face issues during your project. With this in mind, you can plan to be proactive in how to solve common resource allocation problems.

  • Overallocation is usually a matter of assigning employees more work than they can handle. Current workload, the number of billable hours, and inherent human limitations affect how much time team members can dedicate to new projects. To avoid piling on too many tasks:
    • Visualize team availability with project management software
    • Meet with teams to discuss current and past resource challenges
    • Leave a buffer to account for delays and unexpected changes in availability
  • Under-allocation occurs either when you don't assign enough resources to a project or assigned resources aren't fully utilized. Projects that lack resources suffer from delays, bottlenecks, and quality issues. Low resource utilization wastes money and reduces efficiency. You can solve both problems through advanced planning that clarifies high-priority tasks and the resources required to complete them. Following the plan helps teams stay focused and move through tasks in the correct order.
  • Mismatched allocation occurs when employee skillsets don't align with task requirements, resulting in resources being mismatched. Teams may still be able to complete the assigned tasks, but they'll be less efficient than colleagues with relevant experience. Prevent delays by reviewing available skills and reallocating employee resources. If you discover significant skill gaps, consider investing in upskill or reskill programs to better equip teams for future projects.

  • Changes in Resource Availability: Access to resources can change unexpectedly in the middle of a project. Familiarizing yourself with current resource issues in your industry, such as high demand for certain supplies, can inform project planning. If you encounter a truly unpredictable change, see if you can reallocate resources from other projects or tasks to minimize delays.

  • Changes in project goal or scope: Client change requests that pop up when a project is already well underway may make working within budget and time constraints difficult. Make sure you have a process in place that provides time to review request details, discuss changes with teams, and reallocate resources as needed. Share this process with clients before initiation so they understand what change requests are appropriate in light of the project's scope.

  • Delays and bottlenecks: Calculating resource allocation in advance should alert you to potential delays or bottlenecks. Failing to account for these issues can put projects over budget or cause work to extend past deadlines. Perform a detailed analysis during project planning to identify risks associated with resource availability. Use your predictions to add time and resource buffers that enable you to adapt should you need to reallocate or acquire additional resources.

Case Studies: Real-World Examples of How to Solve Resource Allocation Problems

For the Office of the Chief Technology Officer (OCTO) in the District of Columbia, resource allocation issues stemmed from a lack of technical resources required to develop the custom enterprise applications that manage information and services for the district. Financial constraints made it difficult to obtain more resources, so workflows remained time consuming and expensive.

The department decided to implement Quickbase to manage its business problems and challenges. The customizable web-based platform enabled OCTO to streamline workflows, visualize critical data, and improve resource use. As a result, the department was able to manage high-volume application development and reduce overall project costs.

{algo-rhythm}, a boutique digital agency serving clients across industries, experienced similar challenges. Its existing project management tool didn't support the efficient workflows necessary to maximize resource use, and the company struggled to meet deadlines.

COO Jason Hornay landed on Quickbase as the best solution to centralize project and resource information, including critical data like project and task status and employee schedules. Thanks in part to better data visibility and resource use, {algo+rhythm} saved 40 employee hours a month and increased job profitability by 20%.

Meet Resource Allocation Challenges with Dynamic Project Management Tools

Understanding how to do resource allocation in project management enables you to visualize resource needs and availability and anticipate potential challenges. Prior planning and strategic resource allocation mitigates risk so teams can approach complex projects with clarity.

The right custom project management software enables strategic calculations for successful resource allocation no matter how many resources you're juggling. With Quickbase, you get a dynamic solution that includes resource forecasting, capacity planning, and tracking tools to help you optimize resource use and address potential challenges. Try it for free today.

Picture of Associate Content Marketing Manager Ray Waldron set against a lochinvar background
Written By: Ray Waldron

Ray Waldron is an Associate Content Marketing Manager at Quickbase.