7 tips on how to raise your profits with resource management

Your resource management Nirvana

My advice is to apply a structured approach and start by looking at your resource management Nirvana, i.e. what is your cradle to grave perspective on resource management in your company? You begin your Nirvana exercise by asking yourself two simple yet all-encompassing questions: in an ideal world, what do we want to obtain and what do we want to avoid?

The answer to these questions will be your lighthouse throughout the resource management implementation project. Every time you make a decision on how to roll out parts of your project, take a step back and decide how this fits into the overall plan. And to make your journey easier, do remember that Nirvana will not happen in the beginning, it may happen eventually but not right now. Nirvana is merely your lighthouse.

When you start on your resource management plan, I suggest you build a pain chain clearly defining which business critical areas can be improved via resource management. Focus on these 7 core business pains:

1. Utilisation rate

Always make sure that you have as few people as possible sitting on the bench and you keep your utilisation rate high. Do this by integrating all your resource schedules in a single view, where you can easily spot periods of underutilisation. Low utilisation not only jeopardises profits, it also affects the resources themselves.

2. Billability

One thing is keeping your people at a high utilisation rate, another and just as important is ensuring that they can invoice the hours they put into a project. Do this by tightly integrating your timesheet and ERP system(s) with your Resource Management system. Integration increases data quality and prevents this from falling between chairs.

3. Finding people with the right skills

You need senior people to senior tasks but you don’t need to book them for tasks that a junior person can handle. And you need to put the people with the right expertise on each project to keep client satisfaction high and employee workload low. Do this by maintaining a skills database in your Resource Management system or integrate with an external system that holds this data. Avoid being too granular in your skills assessments – as objectivity decreases when granularity increases (e.g. what does ‘basic’, ‘good’ or ‘intermediate’ French mean – and who defines these levels?).

4. Finding people with availability

Imagine if with a click of a button you could see that Chris is available for that high-scale project instead of having to send out tons of emails to all project managers to find out. And while booking Chris, you see that Kate is over-utilised for the next month whereas Kim is under-utilised so you re-arrange their hours to give both of them a decent amount of billable hours for the next month. This is tightly integrated with point number 1. to maximise your chances of finding people with the required availability (and thus increasing utilisation), attempt to have as many of your resources in the same system.

5. Forecasting so you can take pre-emptive measures

If you combine your project pipeline with a resource management tool you will be able to spot future issues regarding too little or too much staff and you can act accordingly. If for instance your forecast shows that you have an excess in resource capacity, try and find lower margin projects as that is more profitable than having people sitting on the bench.

6. Holistic data flow

Look at how you want your data to flow and how you want your data displayed in reports to e.g. management and clients. You could consider importing data from your ERP system into your resource management tool so people can register time against their projects. This way, you can compare planned time to actual time spent and give your resource managers valuable insight.

7. Change management

You can have the most perfect resource management system ever built but if your people do not use it, all the glorious functionalities and business benefits are wasted. If you move from having isolated Excel islands into a resource management strategy it is crucial that you tell all key stakeholders from the beginning: a. what is the purpose, b. what do we want to obtain, and c. what do we want to avoid. Your people need to understand that the effort of learning a new system, while possibly painful, is coming back manifold and will ease the work processes for everybody and, ultimately, raise your firm’s profits.

With these business pains addressed you will have a sound and realistic plan for resource management in place. But isn’t this a lot of hard work just to obtain better resource planning, you may think – can I actually see this work-heavy exercise on my bottom line?

Adding thousands of £ to your profits

Let me give you an example. It is my core belief that with resource management you will quickly be able to find one extra billable hour per employee per month. If your hourly rate is £100, you can add £120,000 of additional revenue per year per 100 employees – by finding that extra hour.

Implementing best in class resource management in your firm is not easy, I admit that. But if you make sure to keep your long term ambitions high and the short term ambitions low you are on a realistic path to success and increased profit. You cannot revolutionise your core business processes from day one but you can steer towards resource management Nirvana every day in small steps. If you put your business pain chain in place from the beginning and make sure you always have your resource management Nirvana in sight you’re in the right direction towards increased profits.

This article was written by Henrik Brandt, Global Lead, Resource Management, Deltek

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