Resources are finite, so project managers need a reliable way to negotiate resource constraints without derailing their projects. But how should it be done? What are the constraints to watch out for and how can you solve them?
In this article, we’ll define resource constraints, explain how they impact resource management, and share tips for how to handle them.
What are resource constraints?
Resource constraints are an inevitable part of managing projects. Since projects are temporary endeavors with fixed start and end points, they are limited by:
- Time: Most projects have at least a high-level deadline (e.g., shareholder expectations, external policy) that dictates how many people work on it and for how long.
- Scope: Even though your stakeholders may wish for it, you won’t be able to include everything under the sun as part of the project (as projects are temporary).
- Cost: Most projects have a fixed budget that limits how many hours team members can spend on project execution.
The limitation of the iron triangle is that you can only achieve a maximum of two of the three elements. For example, if you want to reduce costs and shorten your schedule, you’ll have to cut scope. If you can’t make any changes to scope or cost, then it will take longer to execute the project.
Negotiating the tradeoffs of this so-called “iron triangle” constitutes the bread and butter of a project manager’s responsibilities. You will often set baselines for these three constraints and monitor how actuals data stack up against your estimates.
How do resource constraints affect resource planning?
The resource planning process requires developing a strategy for how to work within resource constraints.
The first step in resource planning is to identify your project budget, timeline, and desired scope. Then, you’ll determine how to deploy resources to achieve your project goals. These resources include people, equipment, materials, and budget.
I’ve seen project managers draw up beautiful resource plans outlining the dream team they’d like to see tackle a project. In reality, the dream team can be difficult to assemble.
While you should absolutely negotiate for what you need, don’t put forth a resource plan that requires so much adjustment that you’ll end up wasting valuable time rightsizing it in the critical early stages of project execution. You may even lose a potential resource by refusing to consider alternatives to someone already committed to another effort.
Instead, allocate resources to your project in consideration of team members’ availability, the skill sets that are required for execution, your ability to access necessary equipment, and a realistic project cost estimation.
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5 tips to handle resource constraints and ensure effective resource allocation
If resource constraints are inevitable, how do you allocate resources properly without risking portfolio and project health? Here are some tips on how to handle resource constraints:
1. Implement a robust project selection and prioritization process
Finite resources preclude organizations from taking on every project they'd like. Establish an objective decision-making framework to prioritize correctly ensure that you’re assigning resources to your most important projects.
Examples of that decision-making framework might include: alignment with organizational goals, any external dependencies or deadlines, cost-benefit analysis, and estimated complexity.
2. Allocate resources to critical project components
To ensure effective project execution, optimize your resource plan around those project components that are critical for success.
Identify the critical path—i.e., the sequence of tasks that represents the longest path to project completion—and make sure those tasks get staffed correctly. If your critical path slips, then the project timeline slips. (Pro tip: you can use resource planning software like Float to help you plan your project from the beginning.)
From a budget standpoint, make sure you allocate funds to the project elements that are essential for delivery (e.g., a piece of heavy equipment may be essential for completing a construction project.)
3. Build in contingencies
When you’re making your resource plan, don’t sell yourself short. Make sure to build in sufficient slack for your schedule and cushion for your budget to account for unforeseen emergencies. Barring more specific project and organizational data, 10% contingency is usually a safe bet.
Also, be sure to develop backup plans for how you’ll address project risks. For example, what if a key team member becomes unavailable during the course of the project? What if a key supplier falls through? I typically assume something won’t get done on time and then develop a plan B and a plan C to address that risk.
Fortunately, tools like Float offer scenario planning capabilities so you can map out different contingency plans and understand their impacts to project timeline and budget. For example, you can scenario plan with tentative tasks and placeholder roles or use scenario forecasts for capacity and budget.
4. Manage stakeholder expectations
Be transparent with stakeholders about the decisions you are making with regard to resourcing and get their buy-in upfront. To be clear, clients don’t necessarily get to choose the specific team members that will work on their projects, but they should agree on relative prioritization of projects and tasks.
You’ll also need to ensure that stakeholders align on project scope definition to avoid potential misunderstandings later in the project life-cycle. To manage expectations, you’ll want to err on the side of caution by underpromising what you can deliver. Trust me—it’s better than the alternative.
5. Monitor and control resource allocation throughout the project life-cycle
You can use a resource planning software like Float to help you keep on top of resource allocation as the project progresses. You can use Float to track key metrics related to resource constraints, including team utilization, resource availability, and time spent.
Resource utilization rates tell you what percentage of time people are allocating to your project versus the other projects on their plate.
Note that team members shouldn’t be spending 100% of their time on project work. They're only human and need time in their schedule for things like sick leave, paid time off, or career development.
Your organization should set a sustainable utilization rate–one that avoids underutilization and lack of engagement yet also averts overutilization and burnout.
You can use Float to keep tabs on resource availability across your project team. You can also view time tracking data in Float to see how much time people are spending on your project versus others and also forecast any shifts in planned work across the portfolio. You’ll gain insight into how time spent impacts project costs, which helps you to make better decisions on resource allocation.