What is Resource Allocation? 5-Step Process
Whether a company is managing its daily operations or strategizing a new project, effective resource allocation must be put in place. By apportioning optimal resources and managing them, businesses will be able to accomplish their objectives.
Project management teams that effectively allocate resources will also have visibility into the assets they have and minimize any potential delays to their business plans.
What is Resource Allocation?
Resource allocation is the practice of assigning assets to support a business's objectives. Essentially, these assets are all of the things that a company needs to complete a job or project.
The most common resources managers often need are-
- Staff - People who have specific skill sets that a project or operation needs to function.
- Supplies - These are tools, equipment, and appliances, such as software and forklifts.
- Facility Space - There must be a workspace, such as an office or warehouse facility, where staff can congregate and do work.
- Consumables - Materials that are often replaced quickly. For example, pens, printer paper, and car fuel are consumables that employees will use for their operations.
- Capital - Businesses need money to fund their endeavors.
Businesses must manage these different resources to ensure that their project has exactly what it needs at the right time.
5 Steps of Resource Allocation
Organizations can productively and accurately allocate their resources by following 5 key steps.
1. Map the Timeline
Projects generally will go through different phases once it is set in motion. For example, a company that is building a new apartment complex will have a design phase where the space of the structure is planned out, and then it will go into the construction phase where the property is built.
Executive teams must identify all the phases of a project and then estimate how much time it will last. It is also helpful to establish milestones for each phase so that management can have clear visibility into whether they are meeting their goals.
Next, the important tasks of each phase need to be documented. This helps executives see what they need to get done and how they can do it.
2. Identify Necessary Resources
Now that the business has a timeline for the project, they must identify what types of resources they will need to complete each task. The company that is building an apartment complex, for example, would have to need skilled architects and construction workers, as well as building materials, portable lights, and paper.
Executives who do not have past knowledge or experience with their project should research the different phases to find out what resources are necessary.
3. Find the Resources
With a comprehensive list of resources needed, management can effectively look for them.
When finding available people to work on a project, it is important to find those who are not working on other assignments, are planning to be absent for vacation, or are restricted due to time zones. This will minimize any project delays caused by unavailable staff in the future.
4. Assign Resources
At this stage, the organization should begin requesting resources, such as sending a procurement order to the finance team. They should also hire the teams they need and plan out their budgets.
5. Track the Project's Progress
Managers must regularly monitor the project's schedule because any changes or delays can affect the established resource allocation plan. For example, if the weather is causing construction to halt, managers must look into extending construction contracts or purchase weather-appropriate gear.
Some of the common changes that should be monitored are altered business goals, fatigued team members, and unexpected time-off requests. Managers who identify these factors quickly can make adjustments promptly and lessen their impact on the allocation plan.
Common Challenges to Resource Allocation
Various challenges can impact how resources are allocated and managed throughout a project. The most common ones that businesses need to be aware of are-
Availability of Resources
Oftentimes, an organization will have multiple projects running at the same time. This means a project manager from one assignment will need to share the same resources with another project manager.
This can be difficult if there are a limited number of resources that need to be shared. Having a detailed schedule that indicates the specified time a project can use a resource could help assist with this challenge.
There are many factors that businesses cannot predict when starting a project, such as natural disasters and team members going on sick leave.
It is important to have a resource management team that is equipped to respond to any uncertainties that may arise throughout a project.
Shifts in Priorities
Priorities for a project may change, especially if a business is working on more than one assignment simultaneously. Sometimes a specific project will have to be prioritized due to timing or other pressing factors, leaving the other project to be put on pause.
For a project to successfully deliver results, it needs a stable foundation of resources. Businesses that effectively plan their resource allocation will be able to ensure that they have the right assets and can minimize delays to their project's performance.