“Success is the maximum utilization of the ability that you have”- Zig Ziglar
This statement holds true for resources in an organization. Irrespective of the size and complexity of a business, most managers would agree that an optimized workforce is a critical success driver of the firm.
However, due to silos of spreadsheets and legacy tools, organizations cannot track and monitor resource utilization levels, leading to over/underutilization. In addition, it can have a detrimental effect on projects and negatively impact the bottom line.
Therefore, organizations must implement measures to tap into the maximum potential of the resource pool and ensure optimal utilization. It helps enhance profit margins, minimize billing loss, and improve business efficiency. and they try their hardest to maximize it.
This blog highlights the various strategies organizations can adopt to optimize resource utilization and how Saviom’s advanced resource management software can help.
Let’s begin.
1. How can resource underutilization impact projects?
Underutilization occurs when resources are not utilized to their total capacity. For example, a developer works 8 hours daily, five days a week, and his capacity is 40 hours. However, he is underutilized if he works 36 hours on various billable and non-billable work such as BAU, admin work, etc.
This implies they are not working at their total capacity or can leverage skills properly. When this situation prolongs for a long time, they will feel undervalued and bored. This affects productivity, engagement, and morale and causes delays in project delivery.
In addition, underutilization reduces the chances for employees to diversify their portfolios or work on diverse projects. Moreover, sometimes resource managers overload a few critical resources leading to burnout and fatigue. Thus, this uneven workload distribution makes it challenging for an organization to retain its resources. It can also lead to sudden project halts and lower deliverables quality.
Now that we’ve established that, let’s look at strategies organizations can adopt to ensure efficient resource utilization.
2. Ways to optimize resource utilization
Sub-optimal utilization can reduce organizational efficiency, impacting the firm’s top and bottom lines. Therefore, it is necessary to implement specific strategies to offset these challenges.
2.1. Maintain enterprise-wide visibility of various resource metrics
Without centralized, real-time visibility of resource-centric information, managers fail to accurately track and optimize resource schedules before assigning them to projects. This can cause uneven workload distribution, double bookings, and employee burnout.
However, by maintaining 360-degree visibility, managers can view the utilization levels of the resources and identify if they are under/overutilized. They can also implement course corrective actions to optimize utilization rates. For instance, if a resource is overutilized, applying resource leveling and smoothing techniques reduces workload, thus maximizing resource utilization and increasing productivity.
2.2. Mobilize resources from non-billable to billable work periodically
When employees are primarily assigned to non-billable work, they will not be able to generate revenue or enhance profitability. It also affects their productivity and performance. For example, allocating a senior resource to a non-critical job will escalate costs and impact their morale as their skills are not optimally utilized.
Thus, managers must mobilize these resources from non-billable to billable and strategic opportunities wherever possible. Moreover, this periodic rotation of resources among different types of jobs will help diversify their portfolio and achieve optimal utilization levels. This boosts employees’ morale, engagement, and performance.
2.3. Leverage a shared-services model for uniform work distribution
The lack of visibility and foresight into employee schedules can lead to unnecessary hiring even though competent resources are available within the organization. This result in unnecessary administrative overheads and inefficient utilization of resources against their capacity.
By implementing a shared-services model, managers can optimize the utilization levels of their employees in each department. Managers can identify project opportunities across the organization’s verticals and deploy the best-fit resources to fill those vacancies. This way, the cross-departmental collaboration will help optimize resource utilization rates.
2.4. Monitor and minimize bench time of resources
A lack of foresight into a project’s ramp-down activities may increase the bench time for certain employees until the resource manager finds suitable work. When they fail to identify opportunities that match their skill set, it increases costs, results in sub-optimal utilization, hampers employee morale, and affects the ROI.
However, managers can overcome this by monitoring ramp-down activities and looking for projects for benched resources in advance. As a result, it improves billability and reduces bench time between projects. Additionally, under or partially-skilled resources can undergo training while on the bench, leading to better strategic resource utilization.
2.5. Provide multiskilling opportunities for resources
Most often, organizations are involved in numerous projects that require highly qualified personnel. In addition, the demand for specialized and multiskilled workers increases significantly, particularly during seasonal fluctuations. However, when companies are ill-equipped to handle these sporadic spikes, they lose the market opportunity and clients.
To combat this, managers can foster multiskilling and employee development programs to impart relevant, industry-specific skills and knowledge to the workforce. This enables managers to utilize employees more efficiently in diverse projects and hone their skills. This increases their productive utilization levels and also future-proofs them.
Given how organizations can optimize billable utilization, let’s look at how resource management software can help.
3. How advanced resource management software can help optimize resource utilization?
Saviom’s resource management software enables organizations to formulate an effective strategy to create an optimized workforce.
- The tool offers 360-degree visibility of all resources within the enterprise. It enables managers to examine resource profiles and their critical attributes such as competencies, skills, cost rate, etc.
- The advanced filters feature helps managers identify the best-fit project resources and ensure optimal utilization.
- The tool can translate raw data to create multi-dimensional utilization reports and heat maps. Additionally, forecast vs. actual reports helps identify help identify over/underutilization and take appropriate measures to optimize the resources’ workload.
- The tool also assists in leveraging project vacancies and people-on-the-bench reports. These give insights into project openings and inform managers when a resource will hit the bench, respectively. As a result, they can fill those vacancies by scheduling appropriate employees from the bench and shortening the idle time between projects.
All these features of the tool facilitate the efficient utilization of resources.
Conclusion
Every organization’s highest priority is to expand its business and gain more clients. However, simply hiring more people will not assist in achieving these goals. To pursue long-term growth and profits, maximizing the utilization of existing workforce expertise is critical. Effective resource utilization can usher in new market opportunities, improve operations, and meet customers’ ever-changing needs.
