Invitation to discussion: Making optimal use of resources
Making optimal use of resources – not as easy as you might think. Timm Bauten (Director Management Consulting and Solutions):
Around the turn of the year I read an interesting Gartner research piece about resource utilization („Overutilization of Your Team Is Reducing Productivity and Delaying Business Value“, 16 August 2017, G00333105).
Ideal Resource Utilization
Would you have thought that that in most cases 75% utilization of your IT resources is better than 85%?
That with only slightly lower capacity utilization, a value for the business can be generated up to 30% faster?
According to the research, “application leaders often mistakenly believe that high team utilization delivers more work. Yet teams with lower utilization can reduce the time it takes to deliver business value by 30% or more. Application leaders should encourage teams to plan to work at 75% capacity to maximize throughput.”
The research goes on to state, “An everyday analogy of this phenomenon is a traffic jam (see Gartner Figure 2). When the traffic density (or road utilization) is high, a minor crash has an immediate effect on the flow of traffic — it slows dramatically or stops completely. When the traffic density is low the same event does not lead to a dramatic slowing of the flow of traffic. And it comes as a surprise to many road users to learn you don’t need 100% traffic density to see this effect. Traffic jams start appearing when roads reach 70% or more utilization.”
Even though the Gartner document offers an interesting new approach for me and gave me the opportunity to think about the topic in a structured way: I thought the decision “75% or 85% as a target utilization rate” is still far from the problems that many companies have in managing their IT resources.
Why Resource Planning?
I think we all agree that resource management is an essential topic in IT management. On the one hand, resource utilization is a key driver of IT efficiency and thus of costs. A clear (and realistic!) allocation of resources can also support prioritization and avoid frustrations in communication between business and IT.
And of course, this is also required for estimating the project costs and thus for the approval process.
A comparison between planning and the actual usage via time reporting, closes the circle and can then improve future project planning.
Efficient resource planning is made more difficult by both natural complexities and avoidable errors.
One of the natural causesthat are difficult to avoid is certainly the fact that many resources are used overarchingly (relating to project/service/admin, organizational units, etc.). And that further data, relevant for planning, are derived from completely different contexts (training, holidays, illnesses, etc.).
Avoidable errorsinclude issues such as serious overplanning, a lack of motivation on the part of employees to be committed and – very often – a too high interval of resource planning (because, among other things, it is too time-consuming). Especially the search for a “perfect” solution (e.g., weekly resource planning) prevents the achievement of a realistic and sufficient solution (annual planning of resource demands, monthly planning of resource deliveries).
In addition, there are uncertainties in the processes, e.g., the question of when and in which granularity the planning should take place. (At the time of the project idea? In the approval phase? Between launch and approval?).
Ingredients for Lean and Effective Resource Management
Four connected components generate a lean and efficient resource planning:
So how can we achieve a resource management system that absorbs the complexities and avoids mistakes?
There are several important components:
The essential mistakes must be avoided.
- In my opinion, quality assurance and thus the binding provision of the service by the employees, can only be achieved through a voluntary commitment, i. e., involving the employees in the planning. Self-planning makes sense here.
- Especially at the beginning, resource planning should be kept as simple as possible and meaningful in terms of content. It is therefore recommended to start with an annual planning of resource demands and a monthly planning of resource deliveries.
First of all, resource management must be integrated into all relevant aspects and implemented comprehensively.
- This can only be managed with a specially designed and flexible tool, if you want to avoid extra effort and errors through multiple data entry, data synchronization, etc. It may be possible to integrate existing tools from other areas via interfaces. Excel or separate tools for project and service planning do not seem to be able to solve the problem satisfactorily.
- The tool must be able to present different views for different roles (e.g., to facilitate communication with the business or the integration of project costs into the overall IT costs) and control the essential approval processes to ensure that the data is up-to-date.
- Efficient Implementation
A partner who is familiar with the topic company-wide can identify and resolve process ambiguities at an early stage. he process that has been used for 15 years is not always the right one…
I am looking forward to your feedback:
- Are there any essential aspects missing? Does the description of the situation match your experience in IT/project management?
- Are the conclusions correct?
- What other or perhaps completely different solutions do you see?
Please leave your reply or comment below the German version of this article(the use of English is ok there) to keep the discussion in one place. Thank you!