What is dynamic resource allocation?
Human resources are a valuable commodity in the project business because they are usually in extremely short supply. Without resources, no project can be implemented. The project structure planning alone, i.e. what is to be done when, is only half the battle. Nevertheless, many companies plan their personnel resources only very roughly and often rather statically and thus "wastefully" into the projects. Probably simply because they lack the right tools for this.
The most expensive assets of a company are de facto almost without exception the human resources. From a business point of view, personnel as well as training costs can only be booked as expenses in the income statement, but not on the assets side of the balance sheet. From a project management point of view, however, human resources can be viewed somewhat abstractly as "production facilities", which are not available at will and should therefore be planned and used carefully. Compared to production facilities, human resources can be used much more flexibly - an engineer can also do some administrative work in between, in contrast to a lathe, which cannot simply be used as a vacuum cleaner. Nevertheless, human resources in a company are also finite, and the often too many projects are all crying out for them at the same time.
Static resource planning...
So how are human resources optimally planned into the projects? In another article, we have already dealt with this topic and have also shown the ideal case. But you can also take a look at how today's organizations typically practice resource planning and why this is not optimal. This often looks something like this:
All personnel resources (shown here in the vertical) are allocated to the projects on a daily or weekly basis. In the example, individual persons are allocated to exactly one project (shown here with numbers) every day. Thus, project no. 7 has employee Meier (anonymized here) unrestrictedly available in calendar week 13 to 19. This is at least the statement of the planning.
In certain industries, this type of planning is certainly sufficient. For example, where employees work on customer orders and can be permanently assigned to construction sites or assembly operations for longer periods of time and "do nothing else". However, the disadvantages of this type of planning are easy to see:
- Divisibility of resources is not used: Resources cannot be scheduled elsewhere for the period of the project allocation, so they cannot be shared. And this is precisely one of the strengths of a human resource compared to a material resource such as a vehicle. Thanks to their intelligence, people can divide their daily working time sensibly and work on other tasks at the same time. Especially mental work can be done in between or even on the side. Machines are much less versatile in this respect.
- Flexibility through skill-based planning is missing: Instead of scheduling generically via the skills of the resources ("I need a fitter with training X."), employees are scheduled directly ("I need fitter Meier."). Direct, person-related planning can be appropriate or even indispensable in specific business areas or situations. In general, however, flexibility is sacrificed. Resources (including people) can be replaced in certain activities.
- Linking of planning data is missing: Quite apart from the above methodological disadvantages: If the planning is done with the wrong tool (typically with an Excel spreadsheet), then there is simply no link to other planning data such as, in particular, the detailed planning of the individual projects. Then the possibility is missing that all those affected by the project can easily view the planning. Then there is no possibility for several planners to work with the data in parallel, etc.
...vs. dynamic resource allocation
Allocating resources dynamically to projects means that the allocation is linked to the project plan. In concrete terms, the resource Meier is not simply allocated to project 7 for the next 5 weeks, but works for task X on project 7. Task X stands for a process that is to be completed within project 7 and is part of the project structure. Task X has a defined duration, given by a planned start and end date as well as given time and cost budgets. All these general conditions of the task implicitly define the use of resource Meier on this task. If the project plan changes and task X is moved a few weeks into the future, this will of course affect resource planning. Thanks to dynamic allocation or consistency, such project plan changes are also immediately visible in resource planning. Of course, such changes should not be made just like that. This requires appropriate workflows with request and release and the possibility to simulate the consequences of a planning change beforehand. And this is exactly where the complexity comes in, which becomes manageable with a suitable tool like PQFORCE and which the tool cleverly "hides" behind the interface, so that everything still looks simple and understandable for the user.
"Make it as simple as possible, but not simpler"
Especially the second part of Einstein's quote should be emphasized here. In order to dynamically allocate resources to projects, you need the right systems. Because multi-project and resource management has an enormous amount to do with data management. It is only thanks to software systems that a company can get a grip on the high level of complexity (many projects, many resources, many planners,...). It is precisely this complexity that tempts many companies to make planning "as simple as possible", to simplify it and to fall back on a two-dimensional Excel spreadsheet. However, the world - i.e. the multi-project and resource management business - is in fact much more complex and should be appreciated in all its complexity and not modeled "too simply".
About the author
Dr. Daniel Hösli is Managing Director and Lead Consultant at INTRASOFT AG, whose SaaS solution PQFORCE is the leading platform for agile, project-oriented business management. He has been involved in the development of project management systems on a daily basis for 15 years in a consulting and project management capacity - both organizationally and technically - and thus has the experience from countless contacts and tasks from a wide variety of companies and different management levels.