Navigating Resource Allocation in Times of Economic Uncertainty: Strategies for Success

Leanna Michniuk

Updated: December 19, 2023
September 1, 2023
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Resource Management During Economic Uncertainty

In times of economic uncertainty, resource allocation becomes a critical task for professional services businesses looking to not only survive but thrive. The ability to allocate resources effectively can mean the difference between success and failure. But how can organizations navigate these uncertain times and ensure they are making the right decisions? 

In this article, we’ll explore strategies for success in resource allocation during times of economic uncertainty shared by the Managing Director of the Resource Management Institute, Ryan Childers during a recent webinar.

Keep on reading to discover how to navigate resource allocation to achieve long-term sustainability.

Why Resource Management is Critical to Succeed in Today’s Economic Conditions

In the current economic landscape, effective resource management emerges as a cornerstone of success for professional service firms for the following reasons:

Control Over Costs
Labor costs the most for service providers. Smart resource management directly affects finances, making it vital for financial success.

Enhanced Projects and Service
Resource management is critical to better projects and customer service. It’s about putting the right person with the right skills in the right place at the right time. This leads to successful projects and happy customers.

Smart Resource Use
Resource management means using resources smartly. It’s like a puzzle, fitting the right person and skills where they’re needed. This makes things work well and prevents waste.

Valuing People
Organizations must be strategic about managing their people. Effective resource management means matching tasks with skills, and keeping employees content and productive. This helps the organization succeed overall.

Today’s Reality

For a growing professional services business, the current landscape brings its challenges. Outside factors, such as a downturn in the economy, can magnify existing gaps in crucial financial and resource data, revealing the need for comprehensive visibility into these aspects. This insight becomes increasingly crucial for effective decision-making and maintaining operational resilience, enabling businesses to proactively address vulnerabilities and navigate uncertainties. 

Think about how the factors below have changed the way you do business. 

Traditional Factors: 

  • Utilization pressure 
  • Capacity constraints
  • Maintaining a skilled workforce
  • Project profitability
  • Employee satisfaction
  • Customer satisfaction 

Today’s Factors: 

  • Global pandemic 
  • Remote workforce 
  • The “Great Resignation” 
  • Economic downturn 
  • Layoffs
  • Employee engagement concerns
  • AI and machine learning

What Good Resource Management Looks Like

Placing the right person in the right role at the right time brings remarkable benefits. It ensures projects are executed excellently, meeting deadlines, budgets, and maintaining high quality. This approach also helps achieve utilization targets, making the most of resources. Customers end up satisfied due to the expertise being used effectively and employee engagement improves as individuals are aligned with suitable tasks, making work more fulfilling. This synchronization of people, timing, and tasks is the foundation for dependable and successful service delivery.

Good resource management is critical for firms like yours. Read our blog, Why Resource Management is Vital to Growing Your Professional Services Business to learn more.

Effective Resource Management Requires: 

Highly skilled resource managers: Many companies tend to limit resource managers to staffing roles, but this perception falls short of the mark. The role demands individuals who are strategic thinkers equipped with specialized training. Recognizing resource management’s strategic significance empowers these professionals to orchestrate personnel allocation in ways that amplify project success and overall organizational performance.

An agreed enterprise process specific to resource management: Often, large enterprises invest considerable time attempting to create resource management processes from scratch, believing their circumstances are unique. However, the wiser approach is adopting an industry-standard framework that can be tailored to individual needs. This practice not only streamlines resource management but also establishes a common vocabulary and training baseline across the organization.

Effective use of process automation technology (PSA/PPM software): The synergy between process and technology is pivotal. The process should drive the use of technology, not the reverse. Resource managers play a pivotal role in fine-tuning the configuration and utilization of automation tools like Professional Services Automation (PSA) software that includes Resource Management software. This ensures that these tools seamlessly align with the workflow and process requirements, amplifying efficiency and accuracy in resource management.

10 Best Practices for Resource Management

To build a more resilient operational flow for your professional services organization today and in the future, follow RMI’s best practices below. 

  1. Use a centralized approach to resource management with transparent visibility enterprise-wide to all available resources
  2. Benchmark operational efficiency using 2080 for your utilization denominator. Adjust for different work situations e.g. type of work, vacation standards, etc. by adjusting your targets
  3. Implement a documented resource management process with supporting training
  4. Focus on the metrics that matter: project performance, utilization, customer, and employee retention/satisfaction
  5. Build and operate a Resource Management Office (RMO) to manage resource management for your enterprise 
  6. Invest in your resource managers’ training and career paths
  7. Let your process requirements drive a use-case-driven selection process for automation tools. Process design should precede PSA/PPM tool selection
  8. Leading delivery organizations have a robust capability for capacity planning/forecasting to meet the dynamic needs of the business
  9. A properly designed skills database and process will include defining skills by role, implementing regular updates by employees, and conducting proper validation of employee data by management or SMEs
  10. Processes should be developed to better balance priorities for project allocations between the need for business efficiency (utilization) with organizational objectives for employee engagement and retention

Resource Management Processes 

“Big enterprises often waste valuable time trying to develop their own RM process because they are ‘unique’.  Adopting an industry standard which you customize is simply better and enables a common taxonomy and training standard.”

What is JITR? 

Comprised of six dynamic processes, each finely tuned to address the intricacies of modern business, JITR redefines how organizations optimize their resources and is ideal for a professional services organization. These processes, outlined below, encapsulate a comprehensive strategy that seamlessly aligns workforce capabilities with project demands, ensuring optimal efficiency, flexibility, and productivity. Used by hundreds of of enterprises worldwide, JITR is a scalable commercial-grade solution for resource management that enables a common taxonomy for resource management.

Skills Inventory

The skills inventory process of JITR is a fundamental building block of effective resource management. A properly designed skills inventory database and process will include defining skills by role, implementing regular updates by employees, and conducting proper validation of employee data.

Keep these questions about employees in mind: 

  • Who do we have? 
  • What do they know?
  • Where are they?
  • Are they available?
  • What do they want to do?

Putting the Foundation in Place for a Skills Inventory Process

Create a unified and standardized list of roles and skills across various units and departments. This list should be shared and discussed with both supply and demand stakeholders.

Implement technology such as a PSA software to centralize skills data. The Resource Management Office (RMO) should take the lead and oversee the skills database.

Strike a balance in the number of skills required for effective work planning. Categorize and subcategorize skills logically for clarity.

Leverage skills data to facilitate task assignments, capacity planning, and evaluations of team strengths and weaknesses in skill areas.

Establish comprehensive policies and procedures for updating skills to ensure their relevance aligns with evolving business needs.

Three Steps to Improve Forecasting and Capacity Planning

Resource forecasting and capacity planning improves an organization’s ability to proactively meet the needs of our future demand, ensure effective utilization of our team, and has a positive impact on delivering projects on time and on budget.

Step 1: Establish a Process and Baseline

  • Define the parameters of inputs and outputs (data capture, analysis, and reporting)
  • Determine who needs to be involved and held accountable (see step 3)
  • Document your forecasting process and educate those responsible
  • Establish a baseline (either new or something historical where you have source data and assumptions documented)

Step 2: Execute the process

  • Educate people on the process and the value in doing it
  • Put appropriate interlocks in place to support the process
  • Get your resource management process enabling technology solutions in place 
  • Execute the process and measure accuracy/progress
  • Review forecast vs. actuals and re-examine disparities and drivers of those disparities

Step 3: Ensure accountability and continuous improvement

  • Consider metrics to measure and hold people accountable
  • Use of a forecast accuracy index can be helpful. This can be applied to delivery, sales, and other responsible parties.
  • Make continuous improvement a must-have and set progressive targets for forecast improvement and accuracy.

Final Words

While not always easy, proper resource management can be the guiding light professional services firms need to get them through a turbulent economic environment. With the right tools and guidance, you should feel confident in setting up your firm with the right resource management processes in place to come out on top. 

About RMI

The Resource Management Institute (RMI) is dedicated to the advancement of resource and workforce management thought leadership, best practices, and standards.

RMI is currently welcoming new members! Interested in joining? Visit their website to learn more.

About BigTime Software

BigTime provides robust resource management software, streamlining project assignments, aligning skills, and optimizing workforce allocation. Its user-friendly interface offers comprehensive visibility for informed decision-making, enabling efficient operations and successful project outcomes. 

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