Why Resource Management is the Name of the Game in Project-based Companies?

Project-based companies get work as an outcome of a successful bid for the customer's work beating other players in the fray to finish as the winner.

And by the very nature of the business model in such companies, the key to operational success is resource management.

At times getting work is easy but executing it is tough!

Here are some reasons why resource management is so crucial:

• The company may not have the right quantity and quality of people needed to execute the project so they may have to hire people in quick time or move people from elsewhere and then back-fill them. As hiring is done "just in time" cost of hiring may be much higher than usual.
• In case the positions are billable by hour or week and they remain open for long, the delay in hiring has a direct impact on the revenue.
• In case of a fixed-price project if the positions remain open for long, the delay in hiring creates pressure on the existing team as they will need to stretch. This may, in turn, lead to team motivation and productivity issues and even attrition which increases the pressure even further.
• The people deployed on the project may not have the needed skills so they will need to be trained on that skill at a fast pace. Not only will the accelerated competency building not really that useful it also pulls people away from working on the project during the time they are away in a training.
• People engagement and motivation is important in projects especially in those projects where the skills are rare and/or the schedule commitments are very tight. Loss of a team member can easily put a well-running project into a major crisis.
• Getting and retaining people in certain skill-sets may be tough as the prospective candidates and existing employees in that skill may realize that the project they are being hired for or working in respectively may be a one-off project. So the question on their mind would be - "what will I do after this project?"
• There is always a conflict between the organizational and individual interest in respect of skill development. Company would encourage employees to go for a very high level of multi-skill and cross-skill development.
• On the other hand, for an individual it  makes no sense to be a "jack of all trades and a master of none" as that will dilute his value in the job market. The positive side is that the individual can multi-skill and cross-skill to a certain extent so as not to remain a "one-trick pony" which can jeopardize the career in case the one skill the individual has looses its demand in the market.

In such companies, putting people into a project the very first day billing starts and taking out on the very day billing stops is the ideal situation be in. This leads to zero revenue loss.

As this may not be possible in reality, the goal should be to minimize the delay in putting people in and in taking people out from the project.

Maintaining the current allocation of people across the various running projects and "on bench" and the plan for moving people across projects in the next few months is a sine-qua-non to even survive in such a business.

The farther it can be planned the better it is, though the plan needs to be updated constantly. And that is so, since resource management is the name of the game in project-based companies!