The Concept of a Project Resource

In the context of project management, a resource is any entity that contributes to the accomplishment of project activities. Most project resources perform work and include such entities as personnel, equipment and contractors. However, the concept of a resource (and the techniques of resource management presented in this article) can also be applied to entities that do not perform work, but which must be available in order for work to be performed. Examples include materials, cash, and workspace. This article focuses on the resource that is of greatest concern to most organizations – personnel. In a project management system, personnel resources may be identified as individuals by name or as functional groups, such as computer programmers.

The Purpose of Resource Planning

After a detailed schedule has been developed for a project, a nagging question remains to be answered: Will the resources required to execute the project according to schedule be available when needed? In the process of developing each project schedule, the average availability of resources should have been taken into consideration when activity durations were estimated. However, this estimating process does not guarantee that the total workload on any given resource (person or functional group) from all projects and non-project assignments will not exceed the availability of that resource during any future period. When resource overloads occur, personnel are subjected to unnecessary stress, and project activities fall behind schedule. The quality of the deliverables produced is also likely to suffer. Thus, the purpose of resource planning is to anticipate resource overloads, so that they can be resolved for the benefit of both the people and the projects.

The Range of Approaches to Anticipating Resource Overloads

The approach taken to the challenge of anticipating specific resource overloads in specific future periods depends upon the number of simultaneous projects undertaken by the organization and the extent to which people are shared across multiple projects.
If the organization undertakes only a very small number of projects at one time, or if each person is dedicated to work on only one or two projects at a time, a “short-cut approach” may be employed. The easiest and probably most effective short-cut approach is to:

• Give each person a copy of the newly-developed project schedule showing only those activities in which that person will be involved, and
• Ask the person to check the schedule against their personal calendar and other work commitments (including the schedules for the few other projects in which they may be involved) and report any obvious conflicts.

A person may realize for the first time that, during a week which is three months in the future, they are scheduled to work on five major activities in two different projects, while preparing their operating budget request for the next fiscal year and participating in a two-day training program. Clearly, “something’s got to give!” The key to this approach is that each person is given the opportunity and the responsibility to identify their own overloads.

However, if the organization shares resources (again, individuals or groups) across a significant number of simultaneous projects, short-cut approaches to the anticipation of resource overloads are inadequate. A “comprehensive approach” is required. To be effective the comprehensive approach must capture the workload associated with all projects in which the personnel are involved. Fortunately, most popular project management software systems support the comprehensive approach as described in the next section.

The Comprehensive Approach to Anticipating Resource Overloads

The first step in the comprehensive approach is called “resource loading,” and it occurs during the planning process for each new project. For each activity in the project schedule, the quantity of each resource required to perform the activity (typically measured in staff-hours for personnel resources) is estimated and entered into the project management software system. Thus, we might estimate that an activity called “Develop computer code” should require about 30 staff-hours of Linda Baker’s time and 120 staff-hours of effort from a group called “Computer Programmers.” Since the estimates are attached to the activities, the project management software has the ability to determine when the resources will be needed based on the scheduled start and completion dates for the activities. In other words, we now have a time-phased projection of resource requirements or workload for each resource (e.g., Linda Baker and the Computer Programmers). It is also necessary and possible to estimate and enter resource requirements for project-level work (such as project management) and non-project work (that is, the ongoing background process workload) for each resource.

The next step is performed periodically and must be centralized at the project-portfolio level, rather than being performed at the project level. For each resource, the time-phased resource requirements are summed across all projects (as well as the non-project workload) within the project management software system. The resulting “resource profiles” can be displayed in graphical and/or tabular format. By comparing the total workload projection for each resource with the resource’s planned availability, overloads during specific future periods become obvious.

The above description makes the process sound easier than it really is. Challenges include:

• Developing, maintaining, and applying on all projects standard ways of identifying organizational resources.
• Developing the ability, confidence, and discipline to estimate resource requirements for all activities on all projects.
• Establishing the centralized infrastructure that supports the accumulation and analysis of total resource requirements across all projects.

Resolving the Anticipated Resource Overloads

Once a specific resource overload has been anticipated in a specific future period, explicit action must be taken to resolve the overload. The action will involve either increasing the planned availability of the required resource and/or decreasing the planned workload during the period of the overload.

Common methods of increasing planned resource availability include:

If the overload is significant and long-term, use the resource analysis as the justification for seeking approval to hire additional personnel.

• Plan to use overtime
• Plan to employ temporary personnel to supplement the resource group.
• Reschedule vacations, training, etc.
• Common methods of decreasing workload on the resource include:
• Reassign project or non-project work to other people.
• Contract out work.
• Cancel or delay the start of low-priority projects.
• Delay the start of selected activities.

Most popular project management software systems provide algorithms for selecting/suggesting activities to be delayed. Typically, these algorithms will start by selecting activities in the lowest priority project that can be delayed without affecting the scheduled completion date of the project (i.e., activities with slack).

If the methods listed above cannot resolve the overload, two last-choice options that are legitimate if authorized, but that should be avoided if possible, are:

• Reduction in the scope of one or more projects.
• Extension in the duration (scheduled completion date) of one or more projects.

The key to being able to resolve resource imbalances is the ability to anticipate them. Most of the methods listed above require advanced decision making and preparation in order to implement them when needed.

The good news is that you are not required to anticipate and resolve resource overloads. Indeed, few organizations make any attempt to do so. The overloads will always be resolved automatically. The bad news is that if you fail to resolve the overload, the default solution will virtually always be the unauthorized application of one or both of the two options listed above that should be avoided; that is:

• Some of the work on some of the projects will never get done, and /or
• Some of the projects will be completed late.

And, as mentioned earlier, the people working on the projects will experience unnecessary stress that is due primarily to the inadequacy of the organization’s project management system.

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Thomas B. (Tom) Clark, Ph.D., Co-founder and former Executive Vice President of Project Success Method and Project Success Inc., Tom is heavily involved in the development and delivery of PSI’s courses. In addition to his work with PSI, he is Professor Emeritus of Management at Georgia State University. He also served the University as Chair of the Department of Management and as Interim Dean of the College of Business Administration. Previously, he was an Assistant Professor of Industrial and Systems Engineering at Georgia Tech.

Tom has provided project management consulting and training services for a variety of business, government, and non-profit organizations. Prior to beginning his academic career, Tom served in the U.S. Army Management Systems Support Agency at the Pentagon and was employed as an industrial engineer with a national firm in the printing industry. He holds bachelors and masters degrees in Industrial Engineering from Georgia Tech and a Ph.D. in Business Administration from Georgia State University.

PSI consultants have been engaged in more than 10,000 projects in 25 countries on six continents. For more information contact [email protected] or visit www.projectsuccess.com.

Rolling the Waves

My little series on the rules of Lean Project Management was supposed to end with Rule No. 4 (Humans, Humans, Humans) discussed in this blog last October. However, I will now expand my set of “rules” following Lean Project Management specialist Hal Macomber’s enlightening comments on my series in his blog (http://www.reformingprojectmanagement.com/2008/11/09/883/).

Hal observed that I left out three important principles underlying Lean PM, namely: make commitments at the last responsible moment, PDCA everything (Deming Wheel), and produce deliverables in small batch sizes of one or single-piece flow. I did not cover those, since I believed they were not unique to Lean Project Management. However Lean gives them a special slant, certainly worth presenting as additional rules or principles. To the three extra principles proposed by Hal, I will also add, in retrospect, another one: the single tasking of multiple tasks.

So let’s continue with Rule number 5 of 8 (….until we find other ones!): The Roll the Waves rule.

Hal notices in his blog that (as last planners – my addition) you should make your choices and commitments at the last responsible moment». He, and other Lean practitioners, noticed a habit on projects to lock down requirements early, to get material on order early, to grab resources early. These steps rarely help and usually add waste to the project. Further, we lose options when we act early.

I would somewhat equate this principle of making commitments when we are more certain of possible outcomes with the practice of Rolling Wave Planning alluded to in the PMBoK and very well presented by Gregory D. Githens in his excellent white paper, Rolling Wave Project Planning (https://www.projecttimes.com/wp-content/uploads/attachments/NP02.PDF). Good project managers and their team understand that it is useless to plan in detail the whole of a project when one does not have the results of the current project phase or stage necessary to elaborate clearly the next phase. For example, it is quite a waste of effort to detail the development phase of a new product before we have a clear definition of its concept and design criteria. It is also presumptuous to commit oneself on the design of a building’s foundations when the results of required geotechnical studies are not yet available.

On one of the projects I helped plan for an architecture firm, the project client ask me to be more specific on things that were planned to happen three years later; he wanted to discuss details about this period. I had to tell him then that this was useless to discuss these points further while nobody had made precise commitments about the feasibility study phase we were about to begin; these commitments were still impossible to make then, because we had yet to have his permission to enter the future project site to assess initial conditions.

The Rolling Wave Planning principles are very simple: take commitments and detail your planning for the work about to begin, for which you have all the information necessary to take proper action (very low uncertainty). These are “work packages” that you can commit to deliver with a high level of certainty for a given budget and schedule. For the work to accomplish in a later phase, most often requiring as input the results of the work packages you are working on, you should stay away from too much detail, since you do not really know what will be needed then. Rather, you can present this latter part of the project as a set of “planning packages” that will be revisited and detailed only when appropriate – when we have a clearer understanding of what has to be done and what CAN be done.

Rule No. 5 of LPM – Make your choices and commitments (promises) at the last responsible moment. Make them in the form of work packages that will deliver the desired results anticipated with a high degree of certainty….

…Roll the waves: plan the work, execute the work, learn and adapt, plan the work, execute the work, learn and adapt, plan the work, execute the work…succeed

Have you heard the news on the bailout? I mean the financial bailout of the Big Three American automakers. Recently, CEOs of General Motors, Chrysler and Ford went to Washington with a funding request to the tune of 25 billion dollars. As we know, they were unsuccessful in getting what they asked for, and were sent home to figure out what they are going to do with all the money they were looking for.

Every time I run a seminar on business cases and decision making, or consult on this topic, I tell my audience that so few people can present their case well that it is not at all difficult to stand out. Courtesy of Messrs Wagoner, Mulally and Nardelli, we have a perfect illustration of this point. If three of the most powerful executives in the world cannot do it right, who can?

Let’s learn from the four blunders they made.

Know Your Audience

\Let’s just look at the situation again: the country is in recession, financial markets around the world are devastated. Many have lost significant portions of their retirement funds. You come to the Capitol to plead for financial help, citing dire financial conditions and making a case based on the plight of millions of people, already living in less than prosperous parts of the country. When such arguments are used, it pays to be sincere and humble.

That’s the deal with those corporate jets? This one time, you should have flown coach on a budget airline. It does not matter that traveling by private jet may be more efficacious or secure, although that’s arguable, it still is a sign of irresponsible spending when your audience is the elected representatives of all Americans. How are they going to look at this but with indignation?

Develop a Set of Viable Alternatives

Whenever you’re looking for a solution to a problem, it is extremely important to develop a robust set of viable alternatives. Why? There are several reasons. First, if the alternatives are suboptimal, so will be the decision, or, as Shakespeare put it, “There is small choice in rotten apples.” Second, when you present your case to the decision makers, it is likely that new alternatives will be foisted on you if yours are weak. At that point, you will not be able to address them with diligence and the decision will be, at best, postponed.

Our three heroes had one solution in mind – the $25B bridge loan, which, they admitted, may not be enough, as they squarely blamed the economy and the credit crunch for their misfortunes, factors outside their control.

Another alternative was put before them very promptly – bankruptcy. They offered weak arguments against it, which impressed few in the audience.

What should have been presented are three or four clear investment alternatives with controls in place and enough tangible detail (implementation plan) to assure the lawmakers that this money is not going to be wasted. They should have shown flexibility and demonstrated that the presented alternatives had been carefully thought through and internalized. None of that happened.

Know Your Numbers Cold

As you present your case, you will inevitably have to answer questions on key numbers and assumptions. This is no place for vague answers because they immediately create a deep suspicion that you don’t know what you are talking about. This point is almost trivial, but it is so often ignored that it is impossible to dismiss it.

When asked a concrete question about GM’s financing requirements, Rick Wagoner offered an oration so distinctly devoid of any substance that it led to Congressman Kanjorski’s rather direct restating of the question, which still did not get him even a remotely satisfactory response. It was almost embarrassing to watch, but thanks, Rick, for illustrating my point!

Use Relevant Metrics

How will you know that your project is successful? What metrics will you monitor to ensure that the project is on track? What kind of controls are you planning to establish to ensure stellar performance of the service provider? How will you apportion your investment between the members of your consortium?

Such questions about metrics are almost guaranteed to be asked at the time of decision making. Why? The best laid plans fail not in concept but in implementation. Decision makers simply look for reassurance that the presenter of the case has given serious consideration to the key aspects of implementation, that he or she understands its challenges.

As exemplified by Messrs Wagoner, Mulally and Nardelli, sometimes one does not have to ask too complex a question to become concerned. During the hearing, Congressman Cleaver questioned the magic of the investment amount requested (“$25 billion, why not 26?”) and how it would be divided between the Big Three. The ensuing answers lacked detail, certainty and insight. The three CEOs suggested dividing the $25 billion investment based on their respective market share. What does market share have to do with financing requirements? You are right, absolutely nothing, and it is just marginally better than dividing it based on the CEOs’ height.

The current economy is such a wonderful source of case studies. A couple of weeks ago, I ran a seminar on business cases and decision making for some 130 project management professionals. To illustrate a few salient points, I asked the group to develop recommendations on how to deal with the automotive industry crisis. The participants specifically noted the need for controls and definitive plans before any financing could be provided.

Just five days later, the United States government arrived at the same conclusion.

Why refer to a standard for project management?

How can a standard for project management deliver value?
When it comes to technology we can all appreciate the benefit having standards. We plug many different devices into the electrical power receptacle and they all work. We listen to songs and podcasts from hundreds of publishers in MP3 format on our iPod. We can print from essentially any computer to any printer provided we’ve installed the correct printer driver to establish the interface.

Standardized technology enables interchangeability and facilitates international exchange of goods and services. It removes barriers to trade and promotes transfer of technology. It has the effect of reducing variety leading to increased economies of scale.

Standardization has the effect of increasing the availability of products and increasing the interchangeability of products that must perform together. Functional characteristics and methods of testing become widely understood spawning improvement and innovation.

The BSI Group, founded as the British Standards Committee in 1901, states it nicely:
“Standards help to make life simpler and to increase the reliability and the effectiveness of many goods and services we use.”

It’s really an easy stretch of the imagination to envision all these benefits of standardization applying to the processes and technology of project management. And when we consider the spin BSI puts on it, who wouldn’t strive for standardization in every aspect of their project management program.

Is there really anything ethical about purchasing? Are there companies that will actually change suppliers for ethical reasons? Whose morals and ethics are applied? All these questions lead me to believe that ethical purchasing is not a competitive strategy but something that sounds good and makes us feel even better. As project managers, we are sometimes responsible for purchasing on our projects, and we are typically involved in managing supplier relationships. Do we care if those suppliers are ethical?

To me, ethical purchasing means a few things:

• That workers were not exploited in the completion of the product or service
• That materials used to make the product were environmentally friendly
• That environmental resources were not compromised

Ethical purchasing has become a nice buzz word in the business world. Why has it become a part of business today? Because it makes people feel good. I am not criticizing those who follow the principles of ethical sourcing, nor am I criticizing those who choose to buy only from ethical suppliers. I am, however, commenting on the fact that there are multiple reasons why this is a nice-sounding concept and not a competitive strategy:

• There is no standard against which we can measure whether or not a
  company produces or purchases ethically
• Everyone’s definition of ethical is different
• Most companies do not use any specific criteria to ensure that they are
  purchasing from ethical companies
• There is no way to prove that a company is ethical without performing audits and reviews of their business practices

I find it hard to believe that most companies will not buy a particular product or service from an “unethical” supplier if that supplier offers the same product or service at a similar level of quality for less. Business is still business. As a project manager, are you going to terminate a contract with an unethical supplier? That is an individual choice. The reality is that, as PMs, we are not likely to have the power to terminate the supplier relationship.

Companies and projects make strategic purchasing decisions every day and, while I do believe that it sounds nice to say that companies buy from ethical suppliers, I always question what ethical really means. I am not advocating buying from suppliers that take advantage of their work force or have questionable business practices, but do customers really care? Would a customer prefer a lower price or the knowledge that the product was purchased ethically? It is up to each company to be the judge of that, but I would submit that most customers will not know the difference at the time of purchase.

The way to solve this conundrum is to define what ethical purchasing is and what conditions surround it. In construction, the LEED process provides various levels of certification for buildings that are constructed based on environmental considerations, with specific conditions to be met. This certification is based on an international standard. Why not do the same thing for suppliers and projects? Identify specific conditions to be met in order to be certified as an ethical supplier. This removes any confusion in our definition and provides some tangible standards to be met. We can then compare suppliers from different countries and this status may even provide a competitive advantage for some companies over others. Only then will the term ethical purchasing hold any weight.