Operational Excellence

Resource Allocation: Defining its Importance, Benefits, and Impact

Written By: Ray Waldron
March 14, 2024
10 min read

Let’s face it - resource allocation isn’t an easy process. Even the most seasoned project managers struggle with its specific nuances. Amidst this struggle, there is a silver lining - the challenges are compelling project managers to rethink their strategies and methodologies, inspiring them to embrace digital solutions in project management.

According to the Project Management Institute (PMI), organizations waste about 11.4% of investment and resources due to poor project management. This spotlights the need for effective resource management, and project managers are increasingly under pressure to deliver successful outcomes using the available resources.

With the increasing complexity of modern projects, technology is redefining the benefits of resource allocation: how we manage projects, offering tools for automation, digitization, optimization, and tracking. This means the right tech stack can make a massive difference in resource allocation, ensuring visibility into the availability of resources and supporting seamless tracking of all resources.

What is Resource Allocation?

Resource allocation is the process of sourcing and distributing resources during a project. It’s a continuous process in project management, as project managers need to oversee the utilization of every resource to minimize waste, improve performance, avoid cost overruns, and achieve project goals using the allocated resources.

As difficult as it might be, resource allocation is integral in project management and accounts for up to 25% of the processes. Project managers must strategize how to allocate and use resources efficiently to stay within budgets. This includes knowing how to redistribute the available resources effectively in case of unexpected changes.

The Backbone of Resource Allocation

The typical resources in projects include human, financial, and material resources. You must know your team members' skills for efficient workload management. Financial resources require proper planning, reporting, and analysis for effective cost control, while material resources, like supplies, office space, and technology, must be used well to minimize waste.

This calls for effective resource planning and allocation, which involves understanding project needs and tasks for seamless matching. It makes it easy to assign the right people to the right functions while ensuring resources are available whenever needed for a job. More importantly, it allows you to gauge your capacity to make sound hiring, leasing, and training decisions.

Key Benefits of Resource Allocation

When done right, resource allocation can positively impact your project. It can help you be more efficient and ensure equitable distribution of resources, resulting in more value. To realize these benefits, project managers must tactfully implement a solid resource management strategy.

Here are the benefits you’re likely to derive from a result-oriented resource allocation approach:

Simplified Capacity Planning

Effective resource allocation simplifies capacity planning, allowing you to prepare for project execution and implementation based on the expected utilization rate. It gives a vivid view of all the resources you need for a task, process, or project, improving task scheduling and delegation. It also allows you to predict future gaps between demand and capacity, making it simple to anticipate new requirements and adapt to evolving project needs.

Improved Collaboration

When resources are properly allocated and utilized, collaboration becomes easier, as there is no mismatch in distribution. The result is synergy among team members, enabling productive cross-functional teams, fostering knowledge-sharing, and creating a positive work environment.

A resource allocation strategy supports communication with all stakeholders. It helps team members understand their tasks and the resources they need to accomplish their goals. This facilitates better decision-making, particularly when resources need to be redistributed or shared to meet project deadlines.

Better Cost Control

Proper resource allocation also helps control the overall project cost by preventing mismatch, underutilization, and overallocation of resources. When project resources are misallocated or underutilized, they lead to unnecessary expenses and significant wastage, which impacts the bottom line.

For example, overstaffing a project with limited needs increases labor costs. Similarly, using multiple solutions to manage your project can inflate your bill. With strategic resource allocation, you can invest in cross-functional training to keep your workforce smaller or use a dynamic work management tool to centralize your operations.

Timely Deliveries

Misallocation of resources usually results in delays due to overburdened teams, inadequate resources, and misaligned interests. Proper allocation can ensure the project progresses according to plan and teams have the support they need to reduce the risk of schedule delays.

When resource allocation aligns with the project schedule, it is easier to ensure resources are available when needed for efficient task execution and on-time project delivery. This also allows companies to focus their efforts on tasks that are most aligned with the project’s goals, contributing to positive project progress.

Enhanced Team Productivity

With sufficient support, resources, and opportunities, your team can work together more efficiently and productively. This minimizes bottlenecks and supports smooth workflows throughout the project’s lifecycle. Team members can focus on their tasks without unnecessary interruptions or delays.

More importantly, effective resource allocation allows project managers to assign the right resources to the right tasks at the right time. It ensures that resources are distributed in a manner that maximizes the potential of every team member. This can boost employee engagement and satisfaction, eventually improving project performance and team productivity.

Challenges in Resource Allocation

While resource allocation is integral to projects, it comes with unique challenges that can impact the progress and quality of the project. For instance, PMI research revealed that 23% of projects fail to deliver on time due to poor resource allocation. As such, project managers must recognize and understand these challenges to devise impactful approaches.

Project Interdependencies

Interdependencies among tasks, activities, and resources significantly influence resource allocation. For example, changes in resources for one task can have ripple effects on other tasks, leading to conflicting needs and roles.

A resource allocation strategy allows you to identify all dependencies and interdependencies. You can use mapping methods like the network diagram, work breakdown structure (WBS), dependency register, and dependency matric. Most software solutions support these methods, allowing you to track and map interdependencies across multiple projects.

Skill Shortages

Many industries and sectors experience skill shortages due to an aging workforce, economic fluctuations, changing technology, and other challenges. This makes it difficult to plan and execute projects. For instance, up to 61% of project managers in the construction industry say they face delays due to labor shortages, while 88% of those with open positions struggle to fill them.

You can mitigate this challenge through workforce planning and workload management. Analyze your team members' skills and abilities and strategize how to leverage them across the project’s phases. Also, invest in training programs and apprenticeships to upskill your team. Embracing diversity and inclusion can help you tap into a broader talent pool, too.

Competing Priorities

For most project managers, navigating competing priorities is a daily experience, and it’s not just ticking off items on a checklist or to-do list. Instead, you need to analyze the impact of each activity or task on the broader goals of the project.

Work with all stakeholders to identify their priorities, create a schedule, set realistic deadlines, monitor progress, and allocate resources appropriately.


Poor communication can result in several problems, including overallocation, under-allocation, inaccurate forecasting, and more. For instance, it’s common for suppliers to deliver materials that fail to meet the requirements of a project. The lack of clearly defined deadlines, roles, deliverables, and expectations leads to errors and confusion, impacting resource allocation.

Project managers must ensure team members have access to accurate and current resource plans and requirements. This is easy with digital project management software that centralizes communication and improves file sharing, allowing team members to collaborate in real-time.

Outdated Technology

Some industries, such as manufacturing and construction, have been slow in embracing digital solutions. As a result, most projects operate in a reactive mode when managing resources. Organizations should instead rethink their tech stack and invest in customizable and scalable web-based solutions to handle today’s project challenges. With the right tool, you can improve forecasting, access business intelligence, and gain real-time visibility to improve resource allocation.

Technological Solutions for Resource Allocation

Technology has become a crucial resource in managing the complexities of modern projects. Yet, a PMI survey showed that only 26% of companies use resource management tools to estimate and allocate resources. The right technology solution provides an agile and cohesive plan for resource allocation, simplifying every aspect of tracking and distributing resources.

Here are technology solutions you should consider to ensure efficient resource allocation.

Planning Tools

Centralized planning tools allow you to visualize all your resources on one platform and streamlines the distribution process based on a task’s urgency, importance, and impact. Such tools include:

  • Gantt charts: With a Gantt chart, you get a clear visual of all your tasks and their dependencies in a central place, improving resource availability assessments and improving scheduling and distribution. It also coordinates the utilization of resources for productive workload management.

  • Kanban boards: These boards can assign work and allocate resources. They enable you to see each team member’s workload, making it efficient to allocate resources based on individual capacity and helps team members prioritize work.

  • Task lists: A list gives a view of all the tasks in a phase or project. You can view the list based on urgency, priority, impact, resource utilization, etc. This way, you can channel resources more effectively to those tasks that make the most impact.

  • Project calendars: A calendar is useful in keeping everyone aligned with the project schedule and monitoring the capacity of team members throughout a work week. With easy visibility into team members' availability, you can redistribute resources to areas or tasks that need additional support.

With planning tools, you don’t need to invest in disparate solutions to access them. Digital project management software like Quickbase allows you to access and customize these tools in a single place. Plus, you can leverage integrations to gain deeper insights into team capacity, performance, workload, and more.

Project Dashboards

As noted, resource allocation is an ongoing process in any project and requires tracking to ensure efficiency. So, once you have distributed resources, you can use real-time dashboards to monitor their utilization across your entire project portfolio. A dashboard includes a set of reports that provide an overview of resource allocation, utilization, and availability.

With this data, project managers can make informed decisions on future allocations and redistributions to ensure resources are used effectively. Depending on your configurations and filters, the dashboard can also show resource costs, demand forecasting, conflict alerts, project timelines, etc. Such insights let you make adjustments to the resource plan easily as needed.


Time and employees are integral resources in achieving a project’s goals. As such, with efficient timesheet tracking, project managers can get better visibility into the availability of team members and the time it takes to complete each task. This data lets you plan your resources to ensure all tasks are completed on time and within budget. Timesheets also allow you to adjust resources based on which tasks are taking the most time and may have challenges.

Concluding Thoughts

Proper resource planning and allocation are crucial to the success of any project. Project managers must ensure resources are allocated and utilized effectively to achieve the desired objectives while minimizing costs. Toward this end, they must ditch linear and traditional methods, focusing more on tools that streamline resource allocation and allow for easy visibility into processes.

Start a free trial today to learn how Quickbase can simplify your resource planning and allocation process.

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.