Editor’s Note: This post was originally published in February 2016 and has been completely revamped and updated for accuracy and comprehensiveness as of Oct 2019.
Investing time in better resource management can drive significant value to the business. McKinsey reported, “The rewards for optimizing portfolio management and resource allocation are significant. Recent cases suggest that companies can increase growth-related spending, cut costs, and improve margins, as well as reduce overall business complexity.”
Resource management plays a key role in both the cost and the potential success of a new product launch. If resource activities are not tightly controlled, teams face significant obstacles:
- Delays and resource constraints
- Slower time to market and loss of potential market share
- Costly overtime
- Project disruption
- Defaulting toward urgent projects over impactful projects
- Possible over-billing by suppliers
Resource management is often seen as a siloed discipline in Enterprise Resource Planning. But effective resource management bridges the gap from ERP to Product Lifecycle Management.
5 Keys to Better Resource Management in New Product Development and Introduction
1. Effective priorities: objective and transparent
Many organizations struggle to socialize priorities across silos and keep them visible to all team members. This can lead to miscommunication and mismanagement of valuable resources.
By keeping priorities both objective and clear, leaders and contributors are able to move with greater speed and autonomy to complete the project on time. Here are a few ways to keep priorities clear for everyone:
- Meet regularly with product leaders for a prioritization checkup.
- Score project priorities based on objective factors (projected profitability, current market readiness, required resources, competition, etc.).
- Create a formalized priority map, with numeric values to clarify priority levels to all team members.
- Assign dedicated resources to each project according to priority level.
2. Protect your buffers to deliver on time
An aggressive timeline is not necessarily an efficient timeline. Companies are continually pushed by shareholders and customers to deliver products faster. But aggressive scheduling can quickly overwhelm resources and impact the bottom line.
Process manufacturing has too many variables to support overly tight timelines. To make an accurate timeline and stick to it, managers need both objective task/time planning and a sensible buffer that must be defended at all costs.
The timeline begins with perfect-world projections based on ‘touch time’ instead of elapsed time, e.g. a wireframe takes eight hours of work, but might take two days to complete with interruptions and side tasks. The projected touch time, then, is eight hours. Once the critical tasks and touch times are mapped, the manager can add the project buffer (50% of the critical chain timeline is a standard starting point) to compensate for all the variables that may slow the process.
Applying these principles and adding appropriate buffers to your own timelines can keep projects moving at peak efficiency.
A few best practices for effective timelines:
- Use successful projects from the past as precedents.
- Note benchmarks for each stage.
- Map the benchmarks as gates or stopping points in a project, to assess progress, and identify additional resources needed (if any).
- Adjust planned timeframes based on past delivery times.
- Illnesses, job changes, and other unexpected life events are part of the process. This is part of what the timeline buffer covers.
- Student syndrome is real. If deadlines are down to the minute the work must be completed, many employees will wait until then to begin. This is one reason buffer time is planned into the back half of the project as a block, instead of being distributed across each individual task.
3. Clarity requires smart tracking
It’s difficult to know whether resources are allocated correctly and moving quickly unless tracking is accurate, integrated, automated, and focused on the metrics that matter.
- Project/Task Tracking: Each resource should enter their hours on a daily basis, noting time for even small projects. Not only will this improve accuracy in future scheduling and resource allocation, but it will allow supervisors to pinpoint minor distractions that steal attention from major priorities.
- Automated Integration: Eliminate dual entry and data silos by creating an integration between your project tracking and Resource Management capabilities. These do not need to be housed in the same system, but ideally both have the ability to update data in real time.
- Vendors: Designate a team leader (possibly a supervisor) responsible for tracking consultants’ billable hours. Learn more about how Selerant's Supplier Collaboration Portal can help with this.
Bonus: Capture R&D Development Hours to Receive a Tax Credit
One of the many benefits of adopting Selerant’s Resource Management tool is the ability to capture the ‘Actual’ hours R&D spends on product development throughout the year.
The actual hours are tracked and summarized by each individual contributor across the entire R&D organization. They can then be directly tied back to the specific projects, project types and categories. A summary report can be exported that calculates the sum total of all R&D development hours, which an organization uses to file with local governments to receive their applicable tax credits.
4. The metrics to double-check: Cost, quality, and time
The more massive the product organization is, and the more consultants it employs, the more it needs a double-check culture. No one person can possibly have eyes on all the hours and money moving through a project. That’s why it’s important to write check-in moments into the process.
Supervisors should habitually pause at regular intervals to verify time entered with tasks completed, including:
- Accuracy of time entered.
- Quality of work completed.
- Total time needed to complete designated tasks.
- Time needed for remaining tasks.
5. Time to close the loop: Learn and re-prioritize
The last key to effective resource management becomes the first step in the cycle. As managers track resource usage, assess timelines and delivery, and evaluate success, it becomes easier to contrast the planned vs. actual numbers and create accurate forecasts to inform new priorities.
This helps a product organization move forward in three ways:
- Continual evaluation will help calibrate total resource spend vs plan, both as the team moves through product development, and as they begin to plan new projects.
- Greater awareness of planned/actual costs across projects will allow leaders to course-correct before projects become cost-bloated.
- Projections of planned/actual may also help you determine if a project is unlikely to succeed early in the build, allowing leaders to end the project before the loss becomes too great.