Introduction
Resource management is one of the nine knowledge areas whose practices are defined extensively in the Project Management Institute’s standards. The literature is filled with descriptions of “best practices” in resource management. And software vendors rave about the resource management capability of their sophisticated tools. So why do resource management issues continue to be the number one challenge to organizations that practice project management? From inadequate resource forecasting to resource contention issues, conflicting resource priorities to inadequate information on what resources are available; our research has shown that project management professionals have significant resource challenges that impact their organization’s effectiveness.
So what do we make of this seemingly contradictory project world in which we live? What are the root causes of these resource challenges and what can be done about them? And how do best-in-class organizations manage their resources differently from the rest of us? The Center for Business Practices recently conducted a survey in order to understand the issues surrounding resource management challenges and to see if we could find some possible answers to those questions.
Resource Management Maturity
Portfolio resource management includes the processes that allow an organization to effectively assign the appropriate resources (number and skills) to successfully execute the projects in the portfolio. It helps to ensure that the organization’s resources are allocated properly to meet the business needs. It also provides management with information for forecasting future resource requirements (Pennypacker, 2005).
In our survey, we asked respondents to rate the level of portfolio resource management maturity of their organizations on a scale from 1 to 5. The following describes the practices needed for each level of maturity, and the results are shown in Exhibit 1.
Level 1: The organization may recognize the need for a resource management process consisting of identifying resource requirements and “reserving” them; however, there are no established practices or standards in place.
Level 2: There are documented resource management processes in place, considered standard practice for large or highly visible projects. They are not organizational standards used on all projects. All documented processes are repeatable.
Level 3: All resource management processes are in place, documented, and repeatable. The processes are considered organizational standards and are being used by nearly all projects. Management fully supports the resource management processes and has institutionalized the procedures and standards.
Level 4: Resource management processes and standards, used by nearly all projects, are integrated with other corporate processes and systems. Integration includes the resource planning process with the project management office and human resources management process. Measurement processes are in place to provide resource performance data for management decision making.
Level 5: Resource management processes and standards, used by nearly all projects, are integrated with other corporate processes and systems. Resource management improvement processes are in place and used. Lessons learned are regularly examined and used to improve documented processes. Processes are in place to measure resource management effectiveness and efficiency. There is a mandate to comply with all documented and repeatable resource management processes.
Exhibit 1 – Resource Management Maturity
Organizations are very immature in resource management. Over 74% of organizations are at Level 1 or 2 in resource management maturity, which means that there are no organizational standards for resource management. Our research further shows that as organizations mature in their resource management practices, in general their organizational performance improves (see Exhibit 2).
Exhibit 2 – Organizational Performance by Level of Project Management Maturity
To ascertain the level of performance of organizations, we asked survey respondents to rate how well their organizations exhibit seven performance characteristics on a scale from 1 (not at all) to 5 (to a great extent). The performance measures include the following:
- The organization’s strategies are executed according to plan
- The organization’s shareholders are satisfied
- The organization is financially successful
- Projects are completed on schedule and on budget
- Project customers are satisfied
- Project resources are allocated optimally
- Projects are aligned to the organization’s business strategy
- The organization works on the right projects
The data about clearly shows that, for each of the performance measures, organizational performance improves as the resource management maturity of the organization improves.
Resource Management Challenges
Earlier research by the Center for Business Practices (Pennypacker, 2006, 2007) revealed “resource management” to be the number one challenge of organizations. We wanted to understand what specifically about resource management was most challenging, so we looked at three components of resource management: Resource Planning and Estimating; Resource Prioritization, Allocation, and Scheduling; and Resource Execution, Monitoring, and Controlling. Exhibit 3 shows the most significant resource management challenges in each of those components. Survey respondents were asked to rate how significant resource management challenges were in their organizations on a scale of 1 (not significant) to 5 (extremely significant).
Exhibit 3 – Resource Management Challenges
Resource Management Practices
We wanted to get a sense of which resource management practices were and were not being used in organizations. We derived the list of practices based on standard resource management practices described in the Project Management Institute’s standards A Guide to the Project Management Body of Knowledge (PMBOK® Guide) (2004) and The Standard for Portfolio Management (2006). Exhibit 4 shows the standard practices that were least used by organizations. Survey respondents were asked to rate the extent to which their organizations exhibited the following characteristics on a scale of 1 (not at all) to 5 (to a great extent):
Exhibit 4 – Resource Management Practices
Miscellaneous Organizational Characteristics
Exhibit 5 shows several organizational characteristics of interest. In particular, note the disconnect between the last two items: that decision-makers assume there are enough resources to complete projects approved, but in fact, there often aren’t. Survey respondents were asked to rate the extent to which their organizations exhibited the following characteristics on a scale of 1 (not at all) to 5 (to a great extent):
Exhibit 5 – Organizational Characteristics
High-Performing versus Low-Performing Organizations
To identify organizations as high-performing or low performing, we first asked survey respondents to rate how well their organizations exhibit seven performance characteristics on a scale from 1 (not at all) to 5 (to a great extent). The performance measures include the following:
- The organization’s strategies are executed according to plan
- The organization’s shareholders are satisfied
- The organization is financially successful
- Projects are completed on schedule and on budget
- Project customers are satisfied
- Project resources are allocated optimally
- Projects are aligned to the organization’s business strategy
- The organization works on the right projects
We then take the average of the results to each measure of performance to determine an overall organizational performance rating. Those organizations that rank in the top 25% of overall organizational performance are specified as “High-performing Organizations.” Those organizations that rank in the bottom 25% of overall organizational performance are specified as “Low-performing Organizations.” We look at high performers versus low performers to determine whether there are any significant differences in their responses that might help explain their difference in levels of performance.
Exhibits 6 through 9 show the practices and characteristics that high-performing organizations exhibit significantly more than low-performing organizations. Survey respondents were asked to rate the extent to which their organizations exhibited the characteristics on a scale of 1 (not at all) to 5 (to a great extent).
Exhibit 6 – Resource Planning Practices with the Most Significant Difference between High-Performing and Low-Performing Organizations
Exhibit 7 – Resource Allocation Practices with the Most Significant Difference between High-Performing and Low-Performing Organizations
Exhibit 8 – Resource Allocation Practices with the Most Significant Difference between High-Performing and Low-Performing Organizations
Exhibit 9 – Miscellaneous Organizational Characteristics with the Most Significant Difference between High-Performing and Low-Performing Organizations
Conclusions
- Resource management maturity is low in organizations.
- There is a direct connection between the level of resource management maturity and the performance of organizations.
- There are significant challenges in all components of resource management, but particularly in resource planning and estimating.
- Organizations fail to practice many of the resource management standards noted by the Project Management Institute. In fact, organizations don’t seem to even practice some basics consistently, such as creating staffing management plans for their projects. But high-performing organizations are significantly more likely to practice these standards than low-performing organizations. Those standards in particular include:
o Resource career plans are used to effectively use and train employees.
o Information about potentially available resources is used for estimating resource types.
o Staff assignments are effectively negotiated with functional managers.
o Scope of work and resource data is used in estimating activity durations.
o The organization has a centralized pool of resources.
o Resources required is used to determine the duration of activities.
o Project performance reports provide information on resource performance.
o Resource leveling is used to keep resource usage constant.
o Resource reallocation from non-critical to critical activities is used.
- Other characteristics of note that high-performing organizations exhibit significantly more often than low-performing organizations:
o The organization has a strong, effective PMO.
o There is a clear organizational culture for sharing resources.
o Stakeholder roles/responsibilities are clearly defined.
o Effective portfolio reporting capability exists.
o Resources understand project management practices..
- There is a significant disconnect between decision-makers who assume that there are enough resources for all projects when, in fact, there often are not.
