At first, information was scattered across the workplace
In an organisation of a 1.000 people, resource allocation is carried out on many different levels. This guide is an overview of up-to-date resource allocation information of a relatively big organisation, as well as the benefits that can be gained from it.
The organisation's own personnel and billable work
Our example organisation works mainly on projects that are invoiced by the hour. The green line in the chart indicates the capacity of the organisation’s personnel. It shows the maximum number of working hours that the personnel can get done within a typical work day.
The blue area, respectively, indicates the booking situation (resourcing) in billable projects. The chart shows the invoicing rate of our example organisation as an area in relation to the capacity.
By setting an average targeted invoicing rate for the people, we can also see a forecast in relation to the set target. The yellow line indicates the targeted invoicing rate, which the blue area of billable resources tries to achieve with the help of organisational actions.
The forecast naturally depends on the length of the projects, as well as their predictability. A 4-12-month forecast is relatively common for project activity.
Our example organisation is striving to gain the set targeted invoicing rate by project sales, hourly invoicing and successful resourcing. Our example organization utilizes its invoicing rate for living, to manage its payroll, pay invoices and maintain its ability to function.
An organisation that works on projects invoiced by the hour should breathe the information provided by these resource charts, such as actual resource information, when managing its resources, production and sales on a regular basis.
From money to working days
Besides billable projects, an organisation of 1.000 people also develops and educates itself, prepares products or services and administers. The darker area in the chart indicates the resourcing of the personnel in internal or non-billable projects.
The joint area of invoiceable and non-invoiceable resources makes up the forecast of the organization’s utilization rate. It reveals the workload of their personnel in relation to their capacity.
As the invoicing rate approaches the utilization rate, the personnel only work on invoiceable work. This is a great moment to stop and ask, whether education and development are at an adequate level in the organization.
Enough work, enough play
Enough billable and internal work are necessary for our example organisation to function and develop. Enough vacation and absence days are necessary for the wellbeing of the personnel. The resource management of absence days is also important to our example organisation because of the availability forecast and invoicing potential.
The green resourcing area in the chart indicates absence days.
The joint area of the resourcing of different kinds of project work and absence days makes up the forecast of the resourcing rate of the organisation’s personnel. The chart indicates the high level of commitment of the people to the organisation’s actions.
Too great a difference between the capacity and the resourcing rate results in cost inefficiency. The organisation may also be incapable of predicting resource allocation or is not willing to do it.
Name-calling isn't ugly
It’s not always possible to identify all roles when allocating project resources. The pink area indicates the unnamed allocations in the organisation’s project database.
Now the joint area of the chart indicates the forecast of the organisation’s forecasted resourcing rate. Our organisation uses it to predict needs over a longer time span and to communicate acute deficiencies in projects.
The same laws apply to the forecasted resourcing rate and the resourcing rate. Still, the target is set deliberately, offering backup for surprises and protecting the personnel from burn-out.
The forecasted resourcing rate may rise remarkably in the future, exceeding the capacity. That’s when there are more project needs than human resources in the organisation. These needs can be met by recruiting so called future talents, adding externals or shifting the focus from non-billable projects towards billable projects.
Nothing is as uncertain as uncertainty
The organisation strives to constantly sell new projects, whereas the so-called prospect projects keep confusing the project allocation situation with certain probabilities.
In the chart below, the gray area indicates resources allocated to persons and unnamed roles (including the organisation’s own personnel and externals) in uncertain projects. These uncertain allocations are also scaled by the probability of project acquisition. Additional statistical information can be drawn from such a large mass of projects and used to predict future capacity.
Resource allocation is not simple
The resource allocation of a project portfolio of a large organisation is far from easy and there are a lot of questions. It’s essential to an organisation to be able to keep their resource allocation information up-to-date, define targets for their project activity and to manage their actions with their resourcing situation and targets in mind. A successful throughput of projects is fundamental to all this.
This article is a brief summary to this theme. Download the Resource allocation of 1.000 people -guide to read more.