7.4 Techniques for Basic Resource Allocation

Allocating the right people and budget to the right projects is one of the most critical and complex tasks in Project Portfolio Management (PPM). Even if an organization has a clear vision and a well-balanced portfolio, execution can stall without a sound approach to resource allocation. This section explores methods for assigning and coordinating resources across multiple projects, focusing on techniques that can be quickly adopted by teams new to PPM while laying the groundwork for more advanced practices.

7.4.1 Skills Inventory and Matching

1. Building a Skills Database
   • Why It Matters: Understanding the capabilities and proficiency levels of your workforce is essential for effective resource allocation. A central repository—whether a simple spreadsheet or a module in a PPM tool—helps you see who is available and qualified for specific tasks.
   • What to Include:
     • Core competencies (e.g., programming languages, data analysis, cloud architecture).
     • Certifications or specializations (e.g., AWS certification, PMP, Scrum Master).
     • Experience levels (junior, mid-level, senior).
   • Action Item: Periodically update this inventory to account for new hires, skill upgrades, or role changes.
2. Project Requirements vs. Available Skills
   • Assessing Fit: When new projects are proposed, map out the required skill sets and compare them to your inventory. Identify gaps or shortages early so you can consider training, reassignments, or external hiring.
   • Prioritizing Critical Resources: Certain specialists (e.g., data scientists, security experts) often become bottlenecks; proactively schedule them to avoid conflicts and prevent overload.
3. Cross-Training and Skill Development
   • Future-Proofing: By systematically cross-training employees, organizations create flexible resource pools that can adapt to new demands.
   • Balancing Assignments: Cross-functional teams are more resilient because they can redistribute tasks when one member is at capacity or absent.

7.4.2 Resource Leveling and Scheduling

1. What Is Resource Leveling?
   • Definition: Resource leveling is a technique used to resolve over-allocation by adjusting project timelines, task assignments, or both. The goal is to keep resource usage consistent with their availability without pushing them into overtime or exhaustion.
   • Why It’s Important: Overstretched resources are a leading cause of project delays and quality issues.
2. Techniques for Resource Leveling
   • Adjusting Timelines: If a key specialist is only available for 50% of a project’s duration, you may shift start or end dates to accommodate.
   • Splitting Tasks: Break larger tasks into smaller segments that can be tackled by multiple team members or completed at different times.
   • Prioritizing Critical Activities: In a pinch, focus on must-have deliverables first, deferring optional features or enhancements to later phases.
3. Tools and Methods
   • Manual Spreadsheets: Simple but prone to human error and time-consuming updates.
   • Automatic Leveling Features in PPM Software: Many tools can highlight overallocation, suggest schedule adjustments, and provide what-if scenarios for rebalancing workloads.

7.4.3 Managing External or Contract Resources

1. When to Engage Third Parties
   • Skill Gaps: If a specialized skill is urgently needed but not available in-house, contracting may be more efficient than recruiting and training.
   • Scalability: External vendors or consultants offer flexibility in scaling up (or down) resources for seasonal or temporary demands.
2. Vendor Selection and Onboarding
   • Evaluation Criteria: Technical expertise, cultural fit, cost structure, and proven track record.
   • Contracts and Service-Level Agreements (SLAs): Clarify deliverables, deadlines, performance metrics, and communication protocols.
3. Integration with Internal Teams
   • Communication and Collaboration: Ensure that external staff are included in relevant meetings, project documentation, and communication channels (e.g., Slack, Teams).
   • Knowledge Transfer: Require thorough handover procedures for any intellectual property, code, or documentation created by external vendors.

7.4.4 Tools and Techniques for Basic Resource Allocation

1. Simple Allocation Matrices
   • Overview: A table (often in a spreadsheet) displaying resources on one axis and projects or tasks on the other, with cells showing the percentage of resource time allocated.
   • Pros and Cons:
     • Pros: Easy to set up, transparent for stakeholders.
     • Cons: Can become unwieldy with large or complex portfolios, doesn’t automatically update.
2. Kanban Boards and Backlog Prioritization
   • When It Works: Ideal for teams using Agile methods where tasks flow continuously from backlog to completion.
   • Benefits:
     • Visual representation of workload, making it easier to spot bottlenecks.
     • Frequent check-ins or standups help rebalance tasks across team members.
3. Role-Based Allocation in PPM Software
   • What It Does: Many PPM platforms allow assigning tasks by role (e.g., ‘Senior Developer’), then matching those roles to specific individuals once final decisions are made.
   • Value: Speeds up initial planning by removing the need to identify exact individuals upfront. As projects move forward, roles are replaced with named resources.

7.4.5 Overcoming Common Allocation Challenges

1. Last-Minute Shifts
   • Situation: High-priority, urgent initiatives can displace previously allocated resources.
   • Mitigation: Keep a buffer or contingency plan for critical resources; maintain transparent communication with all stakeholders regarding changes.
2. Dependency Conflicts
   • Situation: A testing team might be blocked if developers are allocated to another high-priority project.
   • Mitigation: Map inter-project dependencies in your resource plan, so you can see if one project’s delay will cascade into others.
3. Accuracy of Estimates
   • Situation: Underestimating effort required for a task results in chronic overallocation.
   • Mitigation: Use historical data, standardized estimation techniques, and add buffer time to high-risk activities.
4. Resistance to Transparency
   • Situation: Teams may fear micromanagement when asked to share detailed availability or time-tracking data.
   • Mitigation: Emphasize how resource allocation visibility helps avoid burnout and unrealistic deadlines. Keep the reporting process lightweight and focused on outcomes.

7.4.6 Key Takeaways

• Allocation Is a Balancing Act: It’s not just about fitting people to tasks, but ensuring that no individual or role is consistently overburdened.
• Practical Tools First: Spreadsheets, simple allocation matrices, and Kanban boards can be effective starting points before adopting advanced PPM solutions.
• Cross-Functional Collaboration: Effective resource allocation requires ongoing dialogue between project managers, functional managers, and team leads.
• Plan for Change: Organizational priorities, market conditions, or compliance demands can shift unexpectedly. Stay agile and revisit allocation decisions regularly.

By incorporating these foundational techniques—skills matching, resource leveling, external resource management, and a pragmatic approach to allocation tools—organizations can significantly enhance their ability to deliver on portfolio commitments. In the next sections, we will explore higher-level investment management and budgeting concepts, which further shape how resources are distributed across the portfolio for maximum strategic value.