Resource Management on a Project

Introduction

One of the biggest myths around is that project managers regularly deliver on time and within budget, successfully managing all their resources with only minor hiccups en route. Not surprisingly, it's mainly project managers themselves spinning this tall tale, with the phrase 'on time and to budget' featuring heavily in their CVs.

Fortunately, project management hocus-pocus is not protected by the Magic Circle, otherwise we couldn't reveal that this is often just a clever sleight of hand. Yes, let's put our cards on the table: many projects overrun in some way , ending up delivered late or over budget.

What is surprising though is the somewhat defeatist attitude some organizations take towards project costs and timescales. Perhaps because projects consistently overrun, some customers attempt damage limitation by insisting on starting with the lowest number possible, however optimistic. This is in the forlorn hope that they can use this opening gambit to constrain the final outcome.

Even within organizations that seem to take a lenient view of missed deadlines or blown budgets, brilliant project managers prefer to take a rigorous approach to resource management. They find this makes life easier because projects that are in good shape are easier to manage. Conversely, they know that spiraling costs and receding completion dates would undermine general confidence in their ability to deliver.

Dealing with low expectations

When an organization readily accepts slipped deadlines and cost over runs - and such places aren't as rare as you might think - it's easy to slip into the same easy-going rut. At first it's a good life. There's a relaxed attitude to delivery and everyone works with the urgency of the day-after-tomorrow. However you'll find that your project becomes steadily more difficult to run.

Soon it becomes clear how time consuming and ultimately frustrating it is to constantly re-plan. Eventually it becomes tempting to give up any semblance of management and let the project deliver itself. Which, of course, is a recipe for disaster! It's much more productive when your effort is invested in planning, organizing and tracking resources, rather than constantly reacting to one crisis after another.

So, even if you're working in an easy-going place where nobody gets hot under the collar about deadlines and budgets, don't simply fall into line behind your colleagues. However others are behaving, it's still important for you to have a good grip on resource management.

It's not only about money

Resource management is not just focused on money; it's about all kinds of resources, especially people. It's about knowing what resources are needed to complete a project. It's also about managing those resources to bring about a successful delivery. This includes understanding lead times, identifying bottlenecks and arranging for resources to be in the right place at the right time.

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WHAT IS resource management? The art of knowing what resources you need to deliver successfully and then getting the best out of them.

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Resource planning is an integral part of your overall project planning.

You can't manage your project if you're not managing your resources.

In the remainder of this chapter we'll take a look at tools and techniques for managing project resources, starting with the first job of preparing estimates.

Don't underestimate the importance of estimating

Estimating is at the heart of resource planning. You'll be using estimates to arrive at your best prediction of the resources required to deliver your project. You'll need to know both the types and quantities of these resources. A brilliant project manager will also have a good feel for how reliable these estimates are.

Before we look at how to prepare estimates, it's worth considering who should provide them. As with other aspects of planning, the golden rule is to involve the people who'll be doing the actual work, but don't simply leave them to their own devices. You'll need to guide them in this task to get the quality of estimate you're after.

When it's not possible to prepare estimates with the people who'll be doing the work, you'll need to identify who's best placed to help you with this task. Unless you really understand the detail, don't simply produce the figures yourself. If you take this shortcut, you'll end up with an educated guess rather than an estimate, and it will probably all end in tears.

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Tip: When you need an estimate, ask for optimistic and pessimistic figures.

This gets people thinking. An average of the two numbers is a reason able starting point for your estimate.

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Estimating accuracy

Estimates produced in the early days of projects are prone to be inaccurate. Initial predictions can be out by a factor of 200-300%. Typically, the precision of estimates will improve throughout the course of the project.

Before launching into a resource estimating exercise, it's important to establish the level of accuracy you want to achieve - and whether it's really achievable. For example, if you're involved in preparing a bid for a fixed-price project, you'll want to have a relatively high degree of confidence in your quote. If, on the other hand, you've been asked to provide an early ballpark figure that can be refined later on, you might be able to live with a minimum-maximum range.

The level of accuracy required determines how much time you'll need to invest in the estimating exercise. No matter how much effort you put in, the results will not be sufficiently accurate if they're based on vague requirements. So if you need tight, reliable estimates, you also need clearly defined and agreed requirements. If you're after a starter for ten, it's not necessary to pin down requirements to the same degree.

At this point, a word of caution is needed. Customers have a habit of seizing on ballpark figures and then immediately treating them as fixed-cost commitments. Or similarly , only the lower end of a range of costs sticks in their minds. You'll also find that any assumptions, attached conditions or caveats are somewhat conveniently forgotten.

It's no wonder projects overrun in these circumstances.

A brilliant project manager must hammer home any assumptions and caveats. Having been burned when a minimum-maximum range is quoted, we favor budgeting on the basis of the upper end of the estimate. There's often initially a drawback with this approach - a sharp intake of breath from the customer - but longer term, there's less likelihood of disappointment.

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PM School of Hard Knocks:

Estimates are normally quoted with a plus and minus percentage. The minus option never materializes.

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Estimating techniques

The best estimating techniques to use will be dependent upon the specifics of your project and the field you're working in. For some projects, sophisticated estimating tools will be available. For others, gut feel and prior experience will play more of a role. But, whatever kind of project you're responsible for, we'd recommend you work through the following process.

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1. Determine how you want your resource estimates organized and presented. In particular, organizations often have standard resource categories that a project manager needs to follow. For example, it's common to find that costs need to be broken down by capital and operating expenditure at least; and people resources by specific job roles.

2. Break up the estimating exercise into manageable chunks. Your estimators will find it easier to provide meaningful resource estimates if they are presented with bite-sized pieces of work to consider. Try to relate these units of work to specific project deliverables.

3. Get estimates for each piece of work. Make sure you know how the estimators arrived at their figures and that you're happy with any assumptions they've used along the way.

4. Produce your summary estimate. Aggregate the estimates for the various pieces of work, to provide an overall resource projection.

Highlight any key assumptions that have been used.

5. Validate your estimates. Check your figures by finding at least one other way of arriving at resource estimates for your project. For example, compare this project to a previous one that's similar. You could also get an independent review from another project manager.

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Common estimating pitfalls

Whether you've got a sophisticated estimating tool or are using the back of an envelope, there are some common pitfalls that are just waiting to trip you up as you prepare your resource estimates. Keep an eye out for the following.

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Top estimating snags:

_ Bowing to pressure to replace carefully estimated figures with more palatable numbers provided by someone senior.

_ Treating the project scope as fixed and agreed when it's woolly and not signed off.

_ Thinking that estimates inherited from someone else are rigorously researched and carefully calculated.

_ Taking estimates provided by project team members at face value.

Not factoring in excessive caution or optimism - or perhaps simple inexperience.

_ Missing out chunks of work completely or not understanding all the steps required to complete a task.

_ Estimating the effort required from highly skilled people, when a mixed-ability team is actually going to do the work.

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Building resource contingency

At the start of a project it's not possible to fix what will be delivered, how long it will take and how much it will cost. The best you can hope for is to set one or two of these in concrete. For example, you could fix the costs and timescales but vary what you deliver to fit within those constraints.

Alternatively, you could fix the deliverables and vary the time and cost.

Resource contingency is something that's added to estimates to guard against things requiring more work than expected or simply to reflect the fact that an estimate isn't that reliable. Contingency is usually built into individual work packages or added en bloc to one or more general pots.

It's common to incorporate contingency at both levels.

Understanding how much is already built into individual, detailed estimates is part of deciding how much additional contingency you should allow for the project as a whole.

Work package contingency

The first kind of contingency is about ensuring realism regarding the amount of effort required to complete each individual piece of work.

Depending on the nature of the work involved and who's prepared the estimates, you might add varying levels of contingency to selected work packages. The Optimistic who's been looking at a risky piece of work might get a 50% loading on his resource estimates, while nothing is added to the Pessimist’s estimate for repeating a bit of work that's already a known quantity.

This kind of contingency gives you a more realistic resource estimate for completing your project, on the basis that each individual work package within the overall project proceeds broadly to plan.

Pots of contingency

More general contingency is added to deal with significant events that could impact on your project. For example, an unfortunate misunderstanding about scope might be uncovered. This contingency is usually placed in a central pot, but it can be held in other ways such as by resource type or project stage.

Your contingency will often be challenged by your customers or whoever is paid to worry about the costs. If cutbacks are proposed, you need to be prepared to explain why the contingency is needed and what the implications would be if it is taken away.

You should review your contingency as the project progresses. This involves accounting for any contingency that's been used and reviewing what you need for the rest of the project. As a healthy project unfolds, contingency levels should go down.

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The Real World:

Customers have short-term memories when it comes to removing contingency. When you can't keep on track they'll forget they left you with no room to maneuver.

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Use your contingency wisely

When a task is handed out it must be accompanied by an estimate.

However, if you include the contingency from the beginning, you'll find that the work expands to fill the time allocated and the cushion will be immediately lost. This 'wriggle room' should be used only if things don't go according to plan. Sometimes it won't be needed, sometimes it will, and sometimes it won't be enough. Overall, you can expect the use of contingency to even out over time.

Your central contingency funds should be used only once you've exhausted all other options. They should be used for managing significant adverse events - but not for outright catastrophes. For example, if you discover your customer is expecting a fully carpeted house for the price quoted, you could meet the additional costs out of your general contingency funds. On the other hand, if you find that the house has a major structural problem, you'll need to deal with this as a major project exception.

Preparing a resource schedule

Once you've got to the point of having estimated what kinds of resources are required to deliver your project and how much of each type of resource is needed, you're ready to start building a resource schedule.

Your resource schedule is all about making sure that you get your resources in the right place at the right time. This might sound simple, but there's quite an art to this - especially when you take into account that it's unlikely everything will go according to plan.

A resource schedule describes how much of each resource you intend to use over time. You can think of it as a table with a row for each resource type and a column for each week or month of your project. Each table cell will record how much resource you plan to use for that resource type, in that week or month.

By looking down a column, you can use your schedule to show what particular resources you'll need in any given period. Each row also provides a picture of how a type of resource gets used over time.

There's a close relationship between your resource schedule and your project schedule. In fact they need to be developed in tandem since one doesn't make sense without the other. Most planning tools will help you to generate the resource schedule.

In particular, project managers know that resourcing constraints will have an important influence on timelines. This is a fact that's overlooked by some who come unstuck after publishing a schedule first and only then start to think about how the project is going to be resourced.

A difficult balancing act

In preparing a resource schedule there are trade-offs to be made between resources and timescales. While remaining committed to supplying something that's fit-for-purpose, a project manager needs to strike the right balance between the cost of delivery and the time required to achieve this. Typically, constraining resources is likely to lengthen timescales and vice versa. Our quality see-saw illustrates this trade-off:

Cost-------^-------Time

With quality remaining pivotal, if you put pressure on costs you can expect timescales to go up and when you put pressure on timescales, costs go up.

Your starting point is to understand your customer's priorities.

Often they'll have a particular delivery date in mind and sometimes they'll put specific constraints on the budget. Using these priorities you're looking to get the optimum balance between resources and timescales. You may need to discuss some of the options with your customers. Make sure you get beyond the idea that they want your project to be both cheap and quick!

Book early to avoid disappointment

A brilliant project manager is always forward thinking to ensure resources are on hand when needed. This involves making an early booking and reconfirming availability nearer to the planned start date.

Inevitably things will not always go according to plan and a project manager must deal with unexpected changes in resource availability.

This is especially true where people are concerned, for example when they're delayed on another assignment. Be ready to work around these problems, but avoid the temptation to reassign work to whoever happens to be available. If you use the wrong type of resource for a job, it's a recipe for rework.

Always keep a close eye on resources that are in high demand com pared with their availability. This might be an expert with a particular set of valuable skills or some equipment that has limited capacity. You might have to base at least part of your resource schedule around the availability of these resources.

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The Real World of PM:

Regular overtime and weekend working by week two of a project is a sure sign that the resource schedule doesn't stack up.

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Even when you book ahead you may run into resource bottlenecks. If that happens look again to see whether there's an alternative resource that you could use. Also investigate whether there's a way of reordering the work to smooth out your resource demands.

Lead times and ramp-up

It can be easy to overlook the time it takes to get resources on board and fully effective. However, these two things have undone many resource schedules. Lead time is the time that it takes to get a resource on board. Ramp-up is the time it takes for a resource to be fully effective.

Lead times might range from a couple of days for recruiting an internal team member to weeks for an external consultant or even months for a new product to be procured by a government department. Sometimes it's not just the type of resource that matters but how much you need. You might be able to source one expert with some niche skills in a few days but if you need a dozen of them you could be searching for weeks or months. It's essential that you make a realistic assessment of the lead times for each of your resources and then build this into your resource schedule.

You must also allow for the fact that, once our source arrives, it's unlikely to be fully effective from day one. The most common example is the need to induct a new team member, but ramp-up time also extends to things like equipment commissioning, software installation and office facility set-up.

When looking at inducting new team members, it's important that you also account for the time that will be lost to existing team members as they spend time bringing the new arrivals up to speed. Be careful not to underestimate this effort - it can be considerable.

Avoiding resource overload A brilliant project manager won't start off with a resource schedule in which all the resources are fully loaded for the duration they're used, especially people. This is because resources rarely operate at their full capacity.

Be sure that you understand how much effective time you can really expect from your team members. By the time holiday, training, sickness and socializing are taken into account, somebody assigned to you full-time might average only the equivalent of four days' work a week at best. So if your resource estimates suggest you require a team of five people, in reality you're probably in need of six or seven.

However keen you are on sweating your resources, there are things a brilliant project manager must factor into a realistic resource plan:

Official and unofficial public holidays. If you are running a multi national project, don't forget that these holidays vary considerably around the world.

Booked leave or unplanned leave. Check who's going on holiday and when. Include a pro-rata allowance each week or month if firm dates are not available.

Sick leave and training. Make a realistic allowance to cover sick leave and training.

Admin and other overheads. Nearly all jobs entail a degree of non project-related admin and non-productive tasks. Don't underestimate the time that these can take.

Resource tracking

Once you've worked hard on your resource schedule and your project is under way, it's important to track actual against planned resource usage. Not just because you ought to know how much your project has cost, but to help you to refine your resource plan going forward.

Most people have a natural tendency to want to please and may just tell you what they think you'd like to hear rather than what's really happening. It's essential that you have plenty of contact with your team members, even if this is informal. That way, you'll be able to compare official news on progress with what you can see happening for yourself.

Your actual against planned resource usage should feature as a standard item in your progress reports. An interesting point to note is that spending less than forecast is not necessarily a good sign. This could mean that work is not starting on time and this might be an early warning that you're falling behind schedule.

Completion is everything

A brilliant project manager keeps a close eye on what the resources used to date have actually achieved. Our motto here is: 'Progress is of interest. But completion is everything.' You've probably had experience of a task that seemed to be progressing well, with its owner confidently reporting a rapidly increasing percentage complete figure - until about 90%complete is reached. At this point, progress gets stuck at around the 90% mark - week after week.

There's a danger in relying on percentage complete as a measure of progress. People tend to be over-optimistic about what it takes to

finish off the last pieces of outstanding work, which are usually the most problematic. Instead, measure progress in terms of what's been

finished. And you need to make sure that 'finished' means that absolutely no more work needs to be done. Again, people have a habit of glossing over the outstanding finishing touches and are prone to saying something is complete when it isn't.

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The Real World of PM:

If a task is described as 'about 90% complete', it doesn't necessarily mean that it's close to being finished.

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Reporting on finished work only is a much more accurate way to measure progress, although at times it will appear that nothing's getting done. However, there's no risk of myriad nearly finished tasks falsely creating an impression of significant progress.

Measuring outstanding work A useful technique for providing a warning of extra work is to ask your team to report on the outstanding cost to complete. The key principle here is that the amount of outstanding work is a much better indicator of progress than the effort you've spent to date. Let's illustrate this with an example.

You're told that a task is going to take ten days' effort to complete and that four days will be spent on that task this week.

At the end of the week, you ask for a progress update and are told:

_ three days were spent working on the task;

_ there are eight days of outstanding work remaining.

These metrics are a valuable source of information about project progress. First, they tell you whether resources are being used according to plan. Second, and crucially, they tell you whether you're getting through the work at the rate you forecast.

So you now know that:

_ only three days out of the planned four days were spent on the task; and ...

_ only two days of productive work were actually achieved (since this is the amount by which the outstanding work has been reduced).

Summary

You'll be remembered primarily for the quality of what you deliver, but this doesn't mean that you can sit back and adopt a casual approach to resources and timescales. Your customers will certainly attach great importance to keeping within budget. For your own benefit, sound resource management leads to a far more productive and less frustrating day at the office.

You'll be able to trace much of your success here back to a well thought out resource schedule and flexibility in dealing with changing circumstances. The final ingredient is using completion as a true measure for tracking progress.

It would be dishonest to pretend that it's unusual for projects to overrun in some way - whether taking longer or spending more than planned. It's usually because resource management has been poor. So if you want to keep your customers satisfied, and you're looking for an easy life, don't loosen your grip on project resources.

Summary bullets:

_ Whatever others are doing, set your own gold standard for rigorous resource management.

_ Estimates are the bedrock of resource management. Get these wrong and you'll be building on quicksand.

_ Contingency is your lifeline - retain control over it and use it wisely.

_ Book your resources well in advance and confirm your reservation before the start date.

_ Make sure your expectations of productivity are realistic. Even the best workers go on holiday and occasionally pause for a chat with their colleagues.

_ Be skeptical about reports of progress. Demand to see the finished goods!