With the variety of time-sensitive activities your project team needs to monitor and manage from the early planning phases throughout the rest of the project lifecycle, you may discover that assessing resource allocations at a high level is a low priority. Oftentimes, it doesn’t seem all that important to look at resource utilization and forecasts strategically across the entire project portfolio. If projects aren’t routinely running out of resources before they’re complete, then why bother?
But understanding and optimizing resource allocations from the portfolio perspective does more than prevent over-utilization and shortages. It’s also a vital step in eliminating waste, prioritizing the right initiatives, and driving financial performance.
Why aren’t project teams monitoring resource allocations across the portfolio?
In some companies, the people tasked with planning and executing projects are completely focused on their individual initiatives and have only limited visibility into higher, portfolio-level data. Many teams simply don’t have the right data to inform their allocation strategies. Even when the information is available, a lack of real-time insights can similarly hinder strategic resource assignments. Trying to use data that’s weeks or months old isn’t ideal for accurately tracking resource utilization and identifying potential issues in time to fix them.
Large enterprises also have multiple projects and teams working simultaneously, which makes it more difficult for individual project professionals to identify and assess resource conflicts or restraints that may be present in other initiatives. Without a way to see outside their own efforts, these siloed teams will likely encounter resource allocation challenges when a delay or issue in one project creates unexpected utilization or availability ripple effects in other areas of the portfolio.
What happens when project teams don’t have portfolio-level resource data?
A lack of comprehensive visibility into resource allocations across the full project portfolio opens the door to various risks. One concern is that individual project groups won’t recognize when an instance of seemingly minor resource over-utilization could drain the extra bandwidth another project team thinks is still available. The resulting gap could push multiple projects into jeopardy.
Another problem is that, without understanding where resources are underutilized, the organization may have inefficiencies and waste that could have otherwise been avoided. The increased costs and lost opportunities that accompany poor resource allocations and utilization further erode individual project performance and overall portfolio health.
How does portfolio-wide optimization of resource allocations address these issues?
Using portfolio-level data to inform project resource allocation decisions provides important benefits. Your team’s resource assignment strategy can finally incorporate key elements outside the project’s parameters, such as potential conflicts with other initiatives, utilization concerns related to contingency plans or market pressures, and other risks external to the effort.
Resource allocations can also be driven not just by the projects that are active today but also by wider strategic goals tied to the organization’s long-term objectives. For example, an initiative that’s expected to generate funding for a future project can be properly prioritized when allocating resources to ensure the portfolio’s financial performance continues to serve the company’s needs.
Finally, there’s tremendous value in the collaboration that portfolio-level resource planning builds across your project teams. Heavy workloads and aggressive schedules frequently interfere with members’ ability to maintain communication with their peers who are orchestrating their own initiatives. Optimization of the portfolio’s resource allocations involves sharing progress updates and working collaboratively to solve problems as a larger team. Cross-functional collaboration also gives teams the opportunity to identify and address potential resource conflicts and bottlenecks before they become major—and more expensive—issues. Nurturing these communication channels ultimately helps reduce redundancies, improve efficiency, and increase overall portfolio performance.
PMAlliance, Inc uses a team of highly experienced and certified professionals to provide project management consulting, project management training and project portfolio management.