Do you have a regular Monday morning meeting where your management team plans out who is doing what for the week? EPCM organizations spend a significant amount of time and effort on resource management. And no wonder – resource management is a critical, continuous exercise in projecting resource loads, along with planning and managing who is doing what on any given week or month.
Not every company plans at a level that's quite that granular – some companies with larger resource pools and projects forecast their resource needs more at the discipline level. Others prefer to plan each named person in the organization.
Regardless of the approach taken, it remains a complicated exercise that requires good process and good supporting software to do. This isn’t a challenge faced only by EPCMs, but they’re the professional services companies that we work with the most, so it’s a very familiar world to us. Here at 4castplus we obviously have to do a great deal of resource and task management with our own staff, so it’s a fairly universal affair. Part of complexity lies in the fact that many professional services companies (like EPCM) work on a time & materials basis, so the questions of ‘who is billing to what project’ is an integral part of the resource management exercise. On fixed price projects, moving resources around is less of an issue of being transparent to customers – but still requires careful internal management. However, regardless if you are an owner, contractor or EPCM – you still need a software system that elegantly handles your resource management needs.
For this posting, I’m going to throw out a few scenarios that I’d like you to chew on and get back to me on how you would expect a software system should handle them. First, here are some questions that we’re looking to answer:
- Once a project is underway and the budget is signed-off by the client, how do you then move hours between tasks on the project? Do you need to have something akin to a change order to provide an audit trail of the budget transfer?
- Similar to question 1, how do you transfer hours (and therefore budget) from one project to another?
- When doing progress measurements on a project, the earned value management calculations often show a variance in hours and budget. This often means that a task is taking longer (or less time) than expected. How would you want to handle the unforecasted variance amounts?
To bring more clarity to these questions, here are some scenarios for you to consider.
Barry has 100 hours budgeted for him on a task that is scheduled to take 4 weeks. By default, the system will evenly distribute those hours over the timespan, at 25 hours per week (let’s leave time-phasing out of this for the moment). If, after the first week, Barry only worked 10 hours on the task, what is the system supposed to do with those extra 15 hours over the next 3 weeks?
- The system can provide an auto-redistribute feature where it will take any unused time and disperse it evenly over the remaining weeks.
- This redistribute feature can also offer time-phase patterns like a Fast-S or Slow-S curve to disperse the hours.
- The system can also let the project manager override how the hours are dispersed
- The system can let the project manager add resources or move hours between resources on the task. In other words, add a new resource to the task and move those 15 hours from Barry to the new guy.
- What do you think?
In scenario 1, the movement of hours was contained to the same task. In this case, the overall budget for the task wasn’t modified, so the change was only internal and administrative. But let’s take an alternative case where, at the same time as Barry’s task, there is another task being worked on by Jay that is taking him less time than expected. By the way, Barry’s task isn’t taking longer than expected, he just hasn’t been able to dedicate the time on it because of other priorities. The project manager would like to shuffle hours between the tasks to offload some of Barry’s hours to Jay – so that she can plan the resource loading and task assignments of each person. And she would like to do this without changing the overall project budget, schedule or scope. Some of the things the system can do are:
- The system can provide a feature to redistribute the hours between resources and tasks as needed as long as the project budget (cost and billable) remains intact.
- In moving hours between tasks, the budget for each task will change. Should the system provide an audit of this change? For example, a Change Transfer?
- What would you expect the system to provide?
In another scenario, let’s say that after 2 weeks, Barry worked the full 50 hours on the task as planned. But the task is taking longer than expected and it’s only 25% complete after using half the hours. There is therefore a variance and the task is going to take more than the 200 hours planned. The earned value calculation would forecast that the task will require a further 150 hours to complete rather than 100 as originally planned (so, 250 in all instead of 200).
- By default the system will forecast 150 remaining hours, but it will stick the extra 50 hours into an Unforecasted bucket. This unforecasted amount is intended to bring visibility to the project manager that she needs to potentially account for this variance. But since it’s a forecasted variance amount, what tools should the system provide to let the project manager re-allocate it?
- Obviously the project manager can put in a change order to request more funds to account for effort taking longer than expected – but maybe they don’t want to do anything so formal
- Similar to Scenario 2, the project manager can transfer-in from another task that may be running under budget
- The system can provide a Contingency Reserve where the project manager can transfer in and out of the contingency in cases like this. The contingency would have to be either attached to the cost or revenue side of the budget. In the EPCM case, this would likely be a revenue Contingency. It would be cost from the perspective of the client.
- What would you expect in this case?
Let’s take the identical situation in Scenario 2, but presume that the project managers in the company want to view resource assignments more company-wide and require the ability to move resources and hours around between projects. If one project is humming along faster and cheaper than expected – the PM will want to shift some of that extra time & budget to another project that needs a bit of help. Since these projects require a great deal of transparency to the clients, this movement may need to be done with an audit trail. Whether to audit or not is the business choice of the services company. For a fixed price project, this is a non-issue, but on a time & materials (hourly billable) project, this introduces more of an ethics challenge. Regardless, here are the ways resources can be swapped between projects:
- The tools provided by the system would enable project managers to move hours around as required, and the underlying budgets will be updated. To provide auditing for these updates, a Change Transfer record will automatically be created so that these modifications can be reported.
- How do you handle this scenario in your company?
In all of the above scenarios, I’ve been referring to the ongoing resource management once the project has started. These tools described above will be the same for resource planning and manpower loading prior to project start. Resource management amounts to a pre-planning and ongoing exercise requiring a thorough examination of management and transparency.
I’d be grateful for your input on this. It’s becoming a significant part of 4castplus recent and ongoing product development. We want your input – it’s your ideas that really matter.