The Financial Leader’s Monthly Action Plan: Optimize resources through better planning

We’ve released an eBook titled “The Financial Leader’s Monthly Action Plan.” Each month, we are posting excerpts here on our blog.  For the month of June, the theme is “Optimize resources through better planning.” 

Optimizing human resources can help your organization enhance customer service, raise employee satisfaction, save money, and improve profits.  

To optimize resource management, consider the following strategies:

• Invest in automation: Using a resource tool that is integrated with your timesheet application automates resource management and aligns it with business goals. Simultaneously comparing timesheet and salary actuals with budgets, plans, and variances will give your project managers deeper insights into any adjustments that need to be made. 
• Empower your team: Identify a core group of skilled individuals who will form the backbone of your business. Prioritize their schedules and coordinate them with your project managers to gain the right skills in the right place at the right time. 
• Minimize distractions: Help your team focus by minimizing concurrent tasks and reducing unnecessary meetings. Let them channel their energy where it matters most. 
• Set rules of engagement: Establish clear policies and procedures to guide resource allocation and project execution. A documented process and consistent rhythm keep everyone on the same page. 
• Visualize success: Ditch the messy whiteboards and complex spreadsheets that require a lot of time to input data. Resource planning tools like Unanet’s ERP offer intuitive interfaces for clear visualization of skill sets and capacity. This centralizes planning, bringing stakeholders together around a single source of truth. 
• Proactively communicate: Share critical skills needs to stakeholders as soon as possible to allow for schedule adjustments and targeted recruitment. 
• Plan resources across the project lifecycle: Track non-project absences (vacations, leave) across the project to avoid scheduling conflicts with key team members. An automated tool like Unanet keeps everyone informed of who is available and when so you don’t plan a critical activity when your best research analyst is on PTO. 
  

Metrics that drive efficient resource management  

Metrics are your efficiency roadmap. Follow them to navigate strategic resource allocation, optimize utilization, manage costs like a pro, and ensure seamless coordination of skills and schedules throughout project lifecycles. Here are a few metrics you can use to enhance resource management: 

• Utilization percentage: Hours billed divided by total available hours. This metric measures the efficiency of resource utilization. 
• Burdened cost per person: Base salary, fringe benefits, and other compensation (bonus) plus applicable percentage of corporate overhead and G&A rates. This metric is the total cost of employing an individual. 
• Actual net labor multiple: Actual revenue derived by direct labor cost. This metric gauges the overall profitability of projects. 
• Wrap rate: Fully burdened labor rate divided by direct labor rate, expressed as a decimal. The wrap rate determines whether projects are priced competitively while maintaining profitability. 
• Realization rate: Billable time recorded divided by actual time paid by the customers (more often “billed”). The realization rate measures the efficiency of turning billable hours into revenue. 

These metrics will help you make important financial and resource management decisions for your business. For example, a 100-person company with a bill rate of $200/hour might want to find ways to optimize resource allocation enough to increase utilization by 1%. That increased percentage might seem low, but it will result in a notable annual revenue increase. 

100 resources × 1920 hours × 0.01 (1%) × $200/hour = $384,000 annual revenue increase 

Resource management maturity model 

How mature is your firm’s resource management practice? Use the assessment below to determine where you stand. By answering truthfully, you can identify areas of improvement and take steps to make it all the way to the highest level. 

Suggested resources 

Click on the following link and learn how to uplevel your resource management skills: 

• Business of Projects eBook  
• The Financial Leader’s Monthly Action Plan
• Benefits of Maturing Your Project Management Discipline 
• 5 Steps to Resource Management Maturity