Estimating and allocating resources is a core component in planning and executing almost any project. Though your team may be well versed in resource management, there are some issues that are difficult to identify at the project level and you could unexpectedly find yourself in trouble. Fortunately, a portfolio view provides project managers and sponsors with a more comprehensive level of insight into resource conflicts, constraints, inefficiencies, and waste, enabling you to resolve resource problems and improve your project performance.
Poor optimization of craft labor spend. Vendors often perform vital project functions, filling roles and providing services that don’t exist within the organization or aren’t available internally when they’re needed. However, it’s important to monitor external resource expenditures and ensure vendors’ time is well utilized. The most efficient usage occurs when craft labor needs are synchronized across the entire portfolio. This allows you to limit trip fees and travel charges, and also minimizes the time needed to issue keycards to access onsite locations, create login credentials for systems the vendor will use as part of their work, and other onboarding activities that consume your staff’s time.
Overutilization of specialty expertise. When working on projects that involve regulatory oversight – onsite inspections by local permitting authorities, for example, or validation/calibration activities to ensure equipment is within set operating specifications – or that require vendors with specialty credentials, there’s sometimes a tendency to overestimate the level of expertise necessary to complete the assigned tasks. Overutilization of these niche contractors may be difficult to spot at the project level but an assessment of the full portfolio will help you uncover trends that could be costing your company more money than necessary.
Decreased cost effectiveness of recurring resource use. Past labor decisions don’t always remain relevant as market conditions and your organization’s strategic goals change. Looking across the portfolio, you may discover that outside services you once used sporadically are now contracted on a regular basis. Understanding your consumption enables you to evaluate the feasibility of bringing those skills and expertise in house. Would it cost less to add headcount rather than pay for vendor-provided staff? Could you expand the knowledge base of your existing team to encompass these areas? By training your employees or hiring new workers, you may increase the cost efficiency of your resources.
Uneven allocation of resources. A portfolio view delivers insight into how resources are allocated and utilized across the organization. Be on the lookout for trends such as a division that regularly consumes resources at a higher rate than expected, or that uses resources inefficiently. An assessment of your portfolio may reveal that divisions with close relationships to project sponsors have a history of consuming resources that don’t align with their responsibilities or their level of project involvement or financial backing. This is often difficult to determine when reviewing any one project but may come to light when viewing resource allocations at the portfolio level.
Large variances between resource estimates and actual consumption. It’s not uncommon for project teams to pad resource forecasts, particularly when estimating costs for expensive niche vendors or trying to understand how the organization’s internal staffing landscape is likely to look many months down the line. Though the impact on a per-project basis may be small, these variances and artificially inflated line items are likely to add up to a significant dollar amount when compounded across multiple initiatives. It’s important to maintain awareness of not only how much money the company has committed to its project efforts as a whole, but how much of those earmarked funds aren’t actually needed and could be better used elsewhere.