The Money Files

A blog that looks at all aspects of project and program finances from budgets and accounting to getting a pay rise and managing contracts.

About this Blog


Recent Posts

5 Tips for (Cheap) Project Communications [Video]

5 Groups Involved in Project Contract Management

What's New in Project Procurement Management (pt 2)

7 Elements for Project Cost Management Plans

3 Productivity Tips for the End of the Week [Video]

The Different Types of Project Resources [Video]

Categories: resources, video

In this video I talk about the different types of project resources that you'll encounter on your project. 'Resources' isn't just an unfriendly way to talk about people!
Posted on: April 26, 2017 11:59 PM | Permalink | Comments (1)

Tips For Effective Resource Management From #PMICongress

Categories: resources

Dan Lefsky quote

“Far too often we see highly skilled team members deployed to the wrong projects,” said Dan Lefsky at PMI Global Congress EMEA in Barcelona. He gave an interesting presentation about resource management and here are my takeaways.

Uncover the Unspoken Calendar

The resource calendar on your project management tool probably has all the national holidays built in, but what about the unspoken dates? Lefsky explained that events like the World Cup (in any sport), the concept of siesta and other cultural events can totally throw out your work schedule. I’ve seen this first hand in a company that installed additional TVs so that workers could keep one eye on the football when they were in the office.

He also gave the example of August in France as a time when most things close down. You’d be hard pressed to get project team members to do additional hours (or any hours) when the country goes on holiday. I’ve seen that first hand too, as has he, as he currently lives in Paris where I used to live.

Manage Resource Risk

Not all resources work out. Lefsky explained that you should know the failure rates of your resources.

Another resource risk is that of availability. Have you really scheduled them at 100%? Don’t make that error. Even scheduling at 80% can be optimistic if they have day jobs and it gets even worse if their daily responsibilities change during the life of a project. Suddenly a key resource is being pulled on to other tasks and there’s nothing you can do about it. So plan for that risk if you can.

He also suggested taking into account strikes and other labour events, or at least being aware that they could present a risk to your project. They have certainly affected me when in worked in France and affected colleagues in other countries.

Finally, the weather can present a resource risk. In these days of virtual working you might be surprised that projects and businesses can grind to a halt when there’s a bit of snow, but often work does involve someone or some equipment travelling somewhere at some time. If that coincides with a weather event then you can quickly fall behind your baselined schedule.

Manage Demand

Lefsky said that it’s important to start looking at demand management. Look at what is coming into the project pipeline and what is likely to be approved, alongside what has been currently approved and what has been approved but is not yet started.

Putting this in your model can help you longer term. You are building out solid teams who want to come to work, and you can do that more effectively if you know what projects are coming up. “Ultimately,” he said, “you are building teams who need to deliver.”

Demand management is all about looking at the strategic alignment between resource acquisition and getting them into the right place at the right time.

He talked about having an enterprise resource pool with both named and generic resources to help identify the skills available and match them to upcoming demand.

Be Best In Class

Or at least understand what best in class looks like. Lefsky explained that best in class resource management functions have these features:

  • Notifications and alerts
  • Staffing algorithms
  • Diversified data collection
  • Real-time metrics.

With all of this information you can start to build economic models based on variables that help you identify what your resource needs will be in an economy with weak growth, strong growth or somewhere in between.

“A big piece of this is trying to move the process along more quickly without being able to change the structure of the organisation,” he said.

That’s an understatement! It’s fine to start with some of his simpler ideas, but getting to the economic models part is going to take some organisational commitment at a senior level.

Either way, it was an interesting and useful presentation that explained how teams can be more effective at managing their resources and the resource demand.

What are your current challenges with resources? Does anything here help you start to address them? Let us know in the blog comments.

Posted on: June 03, 2016 12:00 AM | Permalink | Comments (1)

What You Need To Know About Individuals For A Resource Pool

Categories: events, pmi, resources

An enterprise resource pool is a great way to track and manage the people available to work on projects. It’s often set up by the Project Management Office and used to work out who is going to be a good fit for the skill needs of a new project.

Setting one up doesn’t have to be a big job or particularly complex, and many project management software tools will do this for you. Dan Lefsky, speaking at the PMI Global Congress EMEA in Barcelona, talked about the things you need to include in your resource pool data set in order to get the most use out of it.

Categories of Resource

He explained that a resource pool includes two types of resources:

  • Generic resources (these could actually be non-people resources like meeting rooms, although he didn’t cover those)
  • Named resources (these are your potential project team members).

The Data Needed For Your Resource Pool

He gave examples of the 8 things you need to consider and record for each named resource in order for you to be able to usefully draw on the data to select team members for upcoming projects. These are:

1. The Type of Resource

Is the person a Business Analyst, a Project Manager, a Quality Analyst, a User Experience expert, a Tech Writer, a Developer? Or something else? This is typically their job title and doesn’t necessarily reflect their particular skills.

2. Skillset

This is where you record their skills. You’ll probably want to set up a drop down list or categories that you can tick from as searching free text fields is going to be too difficult once you’ve got all your resources on there. Skills can include programming languages, Agile/waterfall/hybrid PM methodologies and so on.

3. Experience

It’s worth noting the experience of each individual. This could include the departments they have worked on, the category of project they do, the number of years they have been at the company, or years’ experience overall in their role, the key relationships they have within informal networks etc.

4. Cost

Cost of resource is a factor. Are they charged at time and materials? Or fixed price? What’s their internal day rate when working on projects? You might not have costs for some resources because it’s moving ‘wooden dollars’ around the organisation and that’s fine, but if you intend to charge clients for resource time then you’ll need to know what each person costs.

5. Location

Where is the resource based? For some projects it might not matter because they can work virtually, but for others it might have a significant impact. You could categorise these, Lefsky said, by onsite, offshore, onshore, nearshore or remote. Or you could list the city where they work (or do both).

6. Maximum Availability

This could change depending on their other commitments but it’s definitely a useful piece of information to have for some resources. For example, where an individual also works as a team manager, they will have certain management responsibilities that take up some time. These are things, speaking from experience, like approving timesheets, managing team’s expenses, team-level reporting, 1-to-1 meetings and performance reviews, dealing with sickness absence and so on.

You can’t allocate these people to your project 100% of the time. In fact, it’s not sensible to allocate anyone to your project 100% of the time. Note down what time they have outside their normal responsibilities that can be allocated to project work.

7. Manager

Knowing their line manager is helpful for resource requests.

8. Resource Breakdown Structure

Lefsky talked about positioning resources in the Resource Breakdown Structure (RBS) as this lets you see their security permissions, areas of control and similar. If you have a formal RBS then this could be worth doing but if you don’t, you could just as easily create another categorisation for security clearance if that was important to you.

Gather all this information and start to populate your enterprise resource pool. When you get started you’ll probably just focus on the people who spend a lot of time working on projects, but it’s worth expanding this if you can, and if you are going to take an enterprise-wide view of portfolio management. It’s a big job, and you have to reconcile the fact of treating individuals as ‘resources’ who can be put into little boxes and categorised, instead of the unique individuals that they are, but in large organisations particularly it can be incredibly successful.

Note that you’re going to have to continually review this. While someone’s job title might not change that often they could gain new experience through projects or develop new skills after training. Don’t let your resource pool data get out of date or you won’t benefit from being able to develop individuals or from letting them use new skills.

Do you use a resource pool? Let us know in the comments if it has been successful for you or whether – as I suspect it might be in many companies – it was set up as a one-off exercise and then not developed further, thus falling out of use very quickly. I look forward to hearing your experiences!

Posted on: May 20, 2016 02:10 AM | Permalink | Comments (7)

5 Reasons why you need a resource management strategy

Categories: resources

Posted on: February 27, 2015 10:59 AM | Permalink | Comments (0)

How to handle resource costs in Microsoft Project 2013

Categories: resources, software

Microsoft Project 2013 gives you a number of ways for handling resource costs including standard rate, overtime rate, cost per use and another field to let you accrue resources at a cost. Let’s take a look at these and see when you might want to use them.

Standard Rate

If you use resource costs in Microsoft Project at all, this is the cost field that you will find the most useful. It’s, as you would expect, the normal pay rate for someone or something over a time period. For people, Project will default to a per hourly rate but you can use a different unit of time if you want – just change the setting. Or you can work out their hourly rate based on their monthly or weekly rate and enter that if you want to keep everyone standard by calculating hourly rates for all your resources.

Non-people resources are not calculated on an hourly rate. Instead, they are worked out by price per unit. You’ll have to work out what units you want to use. Use the Material Label field to record what unit you have set. For example, if you are hiring a software testing lab at $1500 per day, you can use the Material Label field to record ‘daily lab fees’. Then Project does the calculation for you – quantity multiplied by standard rate.

Cost per use

Only use this if you have certain resources where you only pay each time you use the resource, and it’s a flat fee. An example would be a call out fee for a plumber for your new office conversion. Each time you call on the plumber, Project will calculate the hourly rate plus the call out fee. You can also use this for delivery charges.

Overtime Rate

Another field that does exactly what it says, but it doesn’t apply to non-people resources. Leave it blank unless you pay your team members overtime for hours worked above and beyond their contracted hours. If you do want to use the overtime function, you’ll have to assign overtime hours to the resource, otherwise Project will assume they are either salaried and don’t get any extra payments or that they earn the same amount regardless of how many hours they work.

Of course, you don’t have to use Project to calculate overtime payments for your team, and it can get quite complicated to keep on top of what’s an overtime hour assignment and what’s normal working time. But if you are expecting Project to calculate your total project budget for you, you’ll need to make time to record all this data otherwise your expense figures will be out.

Accrue At

This field is only useful if you are bothered about when the money is spent. On many projects, this won’t make any difference at all, as your project sponsor will only be interested in the overall budget and estimate to complete. But there might be times when you need to know if you’re paying out the money in advance or after the job is done.

You’ve got three choices here:

  1. Start
  2. Pro-rated
  3. End

They are pretty self-explanatory. ‘Start’ means the cost goes at the start of the task, so you’ve paid upfront. ‘Pro-rated’ means it is spread out across the duration of the task. And ‘End’ means you pay when the work is completed.

It’s fine to record this level of detail in your project plan for expense tracking purposes, but you’ll need to know how to read the reports to interpret it! That’s beyond the scope of this article. But hopefully this has given you a flavour of how to use the different resource cost settings in Microsoft Project and you can choose which ones (if any) are useful to you on your project.

Posted on: January 20, 2014 05:26 AM | Permalink | Comments (0)

"If you can't be a good example, then you'll just have to be a horrible warning."

- Catherine Aird