Resource management refers to the process of optimizing a company’s resource utilization. This process involves planning scheduling and allocating these resources, which include tangible, financial, and labor resources such as goods, equipment, and employees.
Key elements of resource management are;
1. Resource planning
2. Resource breakdown structure
3. Responsibility Assignment Matrix
4. Resource dependency
5. Resource allocation
6. Resource leveling
Types of resource management
1. Human Resource Management(HRM)
Human resource management is the strategy adopted to manage the people involved in an organization to optimize performance and increase productivity. Proper human resource management also ensures a competitive advantage for the organization and hence contributes greatly to better revenue. Human resource management generally consists of hiring, firing, training, and motivating employees. The functions involved in HRM are categorized as follows:
2. Natural Resource Management
Management of natural resources i.e., land, water, and oil that are being consumed by the organization comes under natural resource management. Natural resources are like hidden expenses, which are often considered as mandatory, but effective management of these resources has a significant impact on the financial prospect of the organization.
3. Project Resource Management
Working in any industry is fundamentally dependent on the projects that are being carried out. These projects involve a large number of people belonging to different divisions and different resources consumed. Not only effective communication but the collaboration of such departments is gravely important.
Project resource management refers to managing such personnel and resources and ensures that a project is being carried out in the best possible conditions along with optimum performance. With proper project resource management, in-time and in-budget production can be expected.
4. Financial Management
According to Wikipedia, “Financial management focuses on ratios, equities, and debts. It is useful for portfolio management, distribution of dividend, capital raising, hedging, and looking after fluctuations in foreign currency and product cycles”. For an organization, finance management is the building block, as all other resources depend on the financial capacity of the organization.
5. Infrastructure Management
Infrastructure management may refer to managing the physical assets needed for a better office environment, or it may refer to the backend support for software in an IT organization. Infrastructure management ensures a proper environment is maintained for the working of either the employees or the software.
6. Facility Management
Facility management ensures that the people working in the organization are provided with all the essential equipment or tools that they need to work correctly. It includes two areas, ‘Space and Infrastructure’ (such as planning, design, workplace, construction, lease, occupancy, maintenance, and furniture) and ‘People and Organisation’ (such as catering, cleaning, ICT, HR, accounting, marketing, hospitality).
7. Enterprise Asset Management
Enterprise asset management is the process followed to increase the lifecycle of the asset while ensuring its optimum utilization. It involves the steps for better asset consumption to maximize usage, save money, and improve efficiency.
8. Public Asset Management
Public asset management is the maintenance of public infrastructures like airports, bridges, parks, roads, schools, and water supplies.
9. Digital Asset Management
Digital assets such as images, photos, videos, files, spreadsheets, or slide decks are one of the most important resources for an organization. DAM is a practice that is performed to manage these resources to ensure their ownership, security, and a successful operation performed by the owner.
10. Inventory Management
Inventory refers to the non-capitalized assets and stock items such as raw materials, components, or finished products. Inventory management refers to the administration of such resources, which greatly affects the revenue of an organization. The process of inventory management involves ordering, storing, and using the non-capitalized resources of an organization.
11. IT Service Management
As stated on Wikipedia “IT service management (ITSM) refers to the entirety of activities – directed by policies, organized and structured in processes and supporting procedures – that are performed by an organization to design, plan, deliver, operate and control information technology (IT) services offered to customers.” IT service management focuses on managing resources such as software or networks to provide optimum support for the customer.
Importance of Resource Management
Inadequate resource management gives birth to the following scenarios.
● Missed timelines
● Costly overtime
● Project instability
● Loss in quality due to the urgency
● Possible over-billing by suppliers
Whereas With proper resource management, you can
● Keep track of everyone and everything which is deemed to be a part of the organization.
● Ensure successful timelines by analyzing each resource
● Plan how each resource is utilized
● Experience transparency in the planning and management processes
● Foresee problems that might occur in terms of resource usage
● Gain considerable control over the project.
Benefits of Resource Management
1. Resource Utilization
A resource is useful as long as it is being utilized. To ensure that a resource is being utilized at its maximum capacity and for the longest possible time, resource management is needed. In the case of multiple utilization or concurrent tasks, resource management becomes critically important. Proper resource management in such a scenario not only ensures that all tasks complete on time, but it also ensures that the resource is being conveniently utilized. Resource utilization can be displayed through the following equation:
Resource utilization = Busy time / Available time.
Here, Busy time is the time a resource is being consumed, whereas Available time is the total time a resource is available for utilization.
Resource management hugely impacts the coordination of a project. Mostly, projets comprise of different teams involving a large number of resources. These resources are dependent on each other. In some cases, these resources may have to be consumed concurrently to complete certain tasks. The interdependency of the tasks and multiple utilization of certain resources in these tasks seems practically impossible to carry out, but with effective resource management, each resource can be monitored.
Categorized based on project tasks and their priority, it further helps to eradicate the risk of failure or task incompletion due to a lack of or over-utilization of appropriate resources. It also helps to manage remote teams and the resources allocated to them, which lets a manager in maintaining an overview.
Transparency is a major factor when it comes to coordinating teams, maintaining the trust of the stakeholders, and keeping tabs on the progress of the tasks. Resource management can be a game-changer when it comes to bringing transparency to the table.
Resource management lets you keep a record of all the resources that are being consumed or are available for consumption. These resources are then monitored to analyze the progress of the project. With controlled access to the resources, it also ensures in maintaining the hierarchy.
4. Risk management
How can resource management be linked to risk management? Well, how can it not? At the fundamental level, every risk occurs because of a resource. Either the resource is not being utilized, or it is over-utilized, or maybe it is not available at all. Resource management helps us foresee the mortality of the tasks that will be carried out in the future.
It also helps in identifying the potential risks in the case of inter-dependent tasks that consume the same resource. It helps in planning such tasks to avoid bottlenecks. All adjustments can be made in the early stages to avoid any hassle.
5. Better Control
As Francis Bacon said, “Knowledge is power”. A project manager needs to have the knowledge of who is doing what, how, and when. With resource management software, it becomes extremely convenient to acquire such knowledge.
By allocating resources based on roles and monitoring those resources, he can easily keep tabs on the progress of any given task at any moment. Gaining better control with resource management involves:
● Measuring resource performance
● Keeping an overview of the resources
● More accurate forecasting
● Controlling task execution through resource management