Project, Program and Portfolio Resource Planning and Allocation - Research Paper Example

Resource Allocation Project, Program and Portfolio Resource Planning and Allocation According to the Project Management Institute (PMI), the effectiveness of resource planning and allocation notifies the strengths and efficiency of the projects, which inturn reflect the success of the organizations. To carry out efficient resourcing, there are certain processes, techniques, methodologies, and best practices in place to help the project and program managers work productively. Project resource management is the global process for managing the allocation, application and utilization of resources (people, finances and equipment) throughout the project lifecycle.  Resource management begins with project initiation, when resource needs and strategies must be analyzed, specified and accepted as part of the project "charter" (IT Tool Kit, 2010). Above definition indicates that the term ‘resources’ does not only mean human resources or labor but it also covers other requirements of the project like raw material, electronics, costs, time, efforts, etc. there can be a number of things which can fall under the term ‘resources’. Resource planning falls in the initiation phase of the project life cycle where project/program manager needs to plan a feasibility of the requirement based analysis in order to form a project team, set deadlines, figure out possibility of the assigned timeline, calculate estimated costs, etc. once initial planning is done, allocation comes in. Although the process of project and program management is mostly same, there is slight difference in how resource planning and allocation work for both of them. A program resource management is generally designed to have a direct connection to the overall corporate strategic plan. Composed of a series of similar projects, the goals of all projects within the program are typically consistent with one or more enterprise level strategic components (Tech Republic, 2005). Since project management is headed by project managers, resource allocation or assignment of tasks have to be handled by him in order to achieve the desired goals of the overall project. There may be over of under availability of the resources which he has to manage to achieve the three major elements that build the project; scope, budget, and schedule. This is a little different than the program management, according to which program managers have to look at the bigger picture where they have to check the availability of the resources as per all the active projects. If some resource is engaged with a particular project, he has to manage the conflict between project managers to not engage same resource in some other project. To understand project/program resource management clearly, we also need to understand portfolio management which is like an umbrella over program management, below which falls project management. Portfolio Management is the responsibility of the senior management team of an organization or business unit. This team, which might be called the Product Committee, meets regularly to manage the product pipeline and make decisions about the product portfolio. Often, this is the same group that conducts the stage-gate reviews in the organization (Crow, 2004). Portfolio management is a strategic division of an organization which is focused towards improving the workflow and integration of the teams, resources, budges, and timelines. If we just focus on the resource management irrespective of project or program, we note that project timeline and resource management is directly proportional to the success of the project/program. Resource management involves a resource plan formed at the project planning phase of the project lifecycle for estimating the required resources in order to achieve the project deadlines. Workflow of Resource Management Although in the project planning phase estimates are taken in account, resource planning is not done on gut feeling rather there is a process which helps the project/program managers to figure out the resources which should be used to perform tasks, manage the required skill set, understand the knowledge gaps, obtains resource commitments, and arrange settlement and action plan of work to be done. Below is a process flowchart which describes how it all works: Figure 1: Resource Management Flowchart In most of the organization, there is a separate team just for managing the resources. This team has a pool of resources to place on each project. For determining project resource funding levels, project resource requirements, and estimate work efforts. Project manager coordinates with program manager for estimating the required resources as per the project scope and assigned funds. Program manager keeps a track of all the resources that can be available; he has to see if resources are equivalent to the demand or estimated requirement. Incase of shortage of resources, program manager has to arrange from the available recourse pool. If the program manager is short of resources, than there is a requirement for negotiating the schedule and scope of the project with the relevant stakeholders. Next step is where resources are identified and procured for the project. Project plan, project schedule and scope management documents are used to identify which areas would need how many hours of resources for getting the work done on time. This also requires identification of the skill set resources may have to match the requirement. If there are any gaps between availability and requirements, training plans can be formed to enhance the skills and knowledge set. Once this is decided, resources are allocated. Final step is to attain and record resource commitment for the project to balance the scope and schedule with staffing levels. This requires written commitment from the resources allocated on the project as part of the project plan. Tools for Resource Planning and Allocation Resource management is a key element to activity resource estimating and project human resource management. Both are essential components of a comprehensive project management plan to execute and monitor a project successfully (PMBOK, 2004). In the current time when budgets are limited and available resources are short, successful organizations use ample number of tools for resource planning and allocation in order to accomplish project milestones. There are many tools from which managers can achieve synergies among the project such is project schedule, statement of work (SOW) and work breakdown structure (WBS). Project schedule records the activities and the availability of the resources precisely when they are estimated to be required and avoid clashes between resource allocations. Since the schedule aligns the resources with the requirements, it avoids the risk of resource conflict. Project schedule also allows forecasting the completion date of the activities and feasibility of possibility of completion of activities on time and with the available resources. Project managers can find the most effective way of resource allocation to the project as per the availability. It tells the relationship between the resource availability and timescale. Project schedule works with two basic techniques; Milestone tracking and formation of Gantt chart. Milestones are specific and measureable events through which project managers can easily depict completion of similar set of activities. It tells the periodic review of the progress of the project. Figure 2: Example of Tracking Milestones Another technique used by the project managers while scheduling and evaluating their project progress is by using the Gantt chart. It is a horizontal bar chart presenting project tasks as per the timeline. Gantt chart is useful because project team can check the dependency of tasks in order to accomplish milestones. Figure 3: Example of Gantt chart Gantt chart has its benefits for the project managers such as figuring out if scheduled tasks do not overlap each other. This is a common problem which project managers face but with the help of the bar diagram which Gantt chart has, it gets convenient for them while project scheduling and monitoring. Another benefit is that with the help of Gantt chart, resource assignment and management can also be handled. Project managers can assign the number of people on each task which can be easily seen on the bar diagram. Similarly, resources can check the tasks which have been assigned to them as per the dates mentioned on the chart. Project managers can not only assign human resources but also assets, tools and the estimated cost which may be required while performing a task. Third and the most important benefit is that it helps to evaluate the progress of the project. It has the ability to compare the planned schedule to the actual schedule, portraying the achievement of the expected results within allocated time. Another tool is the statement of work (SOW) which is a formal document that captures and defines the work activities, deliverables and timeline a vendor will execute against in performance of specified work for a customer. Detailed requirements and pricing are usually included in the Statement of Work, along with standard regulatory and governance terms and conditions (Schwalbe, 2009). Statement of work gives the description of what needs to be delivered by the project in terms of product and services. It is formed and provided by the project sponsor or the project initiator based on the project requirements, services needed, or the product to be deployed. It can also be given by the customers for external projects for any sort of request for proposal, request for bid, or as part of the contract. Following are the elements which are part of an SOW: Business need: These are requirements of the organization which appear from the market demand, technological advancement, economic or legal requirement. Project Scope Description: Project scope sets the boundaries of the project, describing what needs to be done and what is not part of the project. It also tells the technologies, products and services which will be used in the project and the relationship between them. Strategic Plan: This attribute links the project goals with the organizational strategic goals such that activities are not diverted from the overall strategic objectives. SOW; along with other documents acts as the input artifact to form the project charter, which it captures project requirements, roles and responsibilities, project objectives, etc. It is not only made for the overall project, but is also specific to the procurement which needs to be carried out throughout the project. It is formed from the project scope baseline and explains the requirements related to the procurement which would be required to be carried out. It is given out to sellers in order to get a commitment from them if they will be able to provide the required products and services. It carries the specifications, quantity desired, quality levels, performance data, period of performance, work location and other requirements. Figure 4: Creating WBS Another tool most commonly used and recommended by PMI is the Work Breakdown Structure (WBS). It involves subdivision of project deliverables and project work into smaller, more manageable components. The WBS is a deliverable-oriented hierarchical decomposition of the work to be executed by the project team to accomplish the project objectives and create required deliverables, with each descending level of the WBS representing increasingly detailed definition of the project work. By WBS, tasks can be managed and accomplished independently, making the resource allocation smooth and handling of roles and responsibilities controllable. Figure 5: Example of WBS Multi-project environment and its challenges for completing resource allocation Above we studied the process, workflow, and tools which are used for project/program management. However we should know that organizations do not just a single project instead there are multiple independent projects running in parallel which may or may not be interrelated or interrelated to each other. Since resources are limited and time is short, there is generally a competition between these projects and their resources for an environment called multi-project environment. In multi-project environment, projects may have dependencies for connecting through technology, knowledge-orientation, product-orientation, or interlinking by the deliveries made to the customer. At the same time, there may be projects that are independent regarding the dimensions mentioned above, but which share important resources with other projects, such as people. This creates a web-like multi-level structure that may be called a multi-project environment (Danilovic and Börjesson, 2001). As the resources are scarce, it becomes challenging to pick the desired resources from the resource pool organizations have. We can apply the demand is to supply ration to understand what it is. It often happens that certain resources (labor or non-labor) are more in demand than other because of their skills, knowledge, capabilities, expertise, ease, etc yet they cannot be assigned to multiple projects at the same time. This leaves a tough decision for managers to decide where to place which resource leading to managing the disturbance cause by shortage of supply. Managers have to be proactive in understanding which resource would serve in what project. This also depends upon the complexity and importance of the projects. Second challenging aspect is the locality of the resources, for example project server is generally deployed at the head office or data warehouse demanding requirement of project’s technical team to be located there too incase of engineering and or quick access requirements. Third challenge which may or may not be in control of the project or strategic managers is the dependency on the external environment. Managers have to be focused on the changing environment and to respond to it in a positive way. Conclusion This leads us to the conclusion that in each organization, resource planning and allocation play an important role towards the success of the project completion if proper methodologies, resources and tools are utilized. Resource allocation does not only require attention of project/program managers but also the strategic team which is looking after the overall organizational goals and objectives, let it be a single project being handled or multiple. Bibliography IT Tool Kit articles (2010), Project Management article [Electronic Version]. Retrieved on February 28, 2010, from http://www.ittoolkit.com/cgi-bin/itmember/itmember.cgi?file=assess_res_glossary.html Tech Republic (2004), Project Management vs Program Management [Electronic version]. Retrieved on February 28, 2010, from http://techrepublic.com.com/5208-11181-0.html?forumID=6&threadID=184287&messageID=1882857 Kenneth Crow (2004). DRM Associates - A  practical  approach  to  portfolio  management [Online] PD-Trak™ Solutions. Newtown Square (2004). Project Management Institute - A Guide to the Project Management Body of Knowledge, Third Edition, Published Pennsylvania. Kathy Schwalbe (2006). Information Technology, Project Management, Fifth Edition", pg. 504 Chapter 12. Mike Danilovic, Håkan Börjesson (2001). Managing The Multiproject Environment -The Third Dependence Structure Matrix (DSM) International Workshop, Proceedings, October 29-30, 2001, Massachusetts Institute of Technology (MIT), Massachusetts, Boston, Cambridge, USA Read More