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Project management

Resource allocation: how to complete projects on time and on budget

Rachel Hakoune 8 min read
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Managing a project from start to finish is no easy task. Although project management software is more accessible than ever, a lot of projects still struggle to come in on time or under budget. In fact, many outright fail.

And projects can fail for many reasons, but a big one is poor resource allocation. You don’t have an infinite supply of each resource, so you need to know how to use each effectively without running out.

Below, we’ll explain further what resource allocation is and why it’s vital to managing projects. Then we’ll give you a few tips on how to improve your resource allocation management on so your projects succeed.

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What is resource allocation?

Resource allocation is the process of strategically planning and managing your project resources so that you can complete tasks based on their availability and capability.

In other words, it’s the process of maximizing the returns on your resources.

Imagine you and your friend are building a rocking chair for your neighbor. But you only have one toolbox. You have one saw, one hammer, one piece of sandpaper, and one bottle of wood glue. Resource allocation involves determining how to best split those tools between members of the team to build a high-quality chair as efficiently as possible.

So, if your friend can hammer in nails more quickly than you (and without hurting themselves), you’d allocate the hammer to them. Meanwhile, you might be more efficient with the saw. And maybe you split the piece of sandpaper in half. Resource allocation saves the day.

What kinds of resources do you have?

Resources comprise any assets that you can use to make progress on a task or project.

Project managers have 2 kinds of resources that they have to allocate:

  • Tangible resources: Tangible resources are resources you can see or touch. They include financial resources, labor, machinery, real estate, and software.
  • Intangible resources: Intangible resources are a more abstract resource. They include ideas, intellectual property, and skills.

Who’s responsible for resource allocation?

In small and medium-sized organizations, the project manager is most often the person responsible for making resource allocation and strategic planning decisions.

Larger enterprise organizations, though, may have entire departments dedicated to project management. Said departments may have resource managers on staff whose primary job is allocating resources adequately. See how can help any size organization resource management with a free trial.

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Why is effective resource allocation so vital to project success?

Proper resource allocation helps you achieve the most results with the least possible use of resources. In fact, a 2009 study found that as an organization’s resource management practices mature, its overall organizational performance tends to improve.

Sure, this was a decade ago. But do you really think robust resource management processes have gotten any less important — especially given the increasing number of resources and variables organizations must consider? On the flipside, improper resource allocation can cause plenty of problems, such as wasted money, dissatisfied employees, and lower work quality.

Say you run a restaurant. You have a server on staff who is fast, friendly, and excellent at upselling customers. They bring in hundreds of dollars more in revenue per week than your next best server.

One day, your host quits, and you need someone to fill the vacancy. Proper resource allocation is knowing that the last person you’d want on host duty is your star server. You can’t split them between both positions, either, as that would burn them out.

Instead, you’d look for another server that isn’t performing as well to fill the host position.

A few challenges resource allocation helps you overcome

    • Conflicting projects: Few organizations never have competing priorities, yet all organizations have scarce resources. Resource allocation can help you catch problems in allocating such scarce resources among several projects. For example, if you have a limited number of employees with certain necessary skills, you can put one project on hold to prevent employee burnout.
    • Resource availability: Resource availabilities can change. This is especially true when it comes to your team members. People get sick, get pulled onto another project, go on vacation, or need additional training to take on a role. Good resource allocation software can help you keep track of resource availability and make better allocation decisions should availabilities change.
    • Scope changes: Project scope can change, and, in our experience, almost always does. When this happens, your needs for certain resources might also change. Having a robust resource allocation process in place makes adjusting to these changes much easier.

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How to allocate resources effectively

Allocating resources properly is tough, especially for large projects. Here are some tips on how to do so.

#1. Determine project scope and resources

Project scope influences what resources you need and how much of each. Knowing the scope helps you assign tasks to the right people when that time comes. So, before you give your team their to-dos, know the project’s goal, budget, and timeline.

Additionally, you’ll want to make a list of every available resource. Most organizations have multiple projects running at once, which leaves limited resources in some areas. See if you can move task priorities around to get the resources you need within your budget.

Cheeky little note here — You can track budgets with super easily: budget template

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#2. Evaluate your human resources objectively when assigning tasks

It can be tempting for managers to assign certain tasks based on their rapport or relationships with team members.

Not a good idea.

Resource allocation is all about efficiency. You must rely on objective evaluations of each team member’s skills and abilities to allocate their talents properly.

For example, say your project involves creating a complex website. Your best bet is to assign only your best web developers to the project, even if you’re friends with some of the more novice developers. Using, for instance, you can quickly assign team members to tasks.

Then, you can see how good they really are as you monitor project progress — this is great for future resource allocation decisions. task assignment

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#3. Use project management software with resource allocation features

Software makes everything easier, especially when it comes to tools for project management. In fact, the Project Management Institute found that 66% of companies that use software stay within budget on projects.

But you want to make sure your software has the resource allocation functionality to aid in maximizing returns on your resources. We’d recommend this resource allocation template. resource allocation template

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#4. Create a backup plan

Projects change. A lot. The budget, scope, and timeline are all candidates for changes throughout the life of a project. Always have a Plan B if you want to be prepared for these changes.

Returning to our website example: your client may suddenly want new features or functionality. You’ll likely need to allocate more developers to the project, especially if you need a particular skill to implement these new features.

#5. Don’t over-allocate your resources

Over-allocation is simply giving too much work to one resource. If you over-allocate, you’ll end up with a less productive resource. Once again, human resources offer the clearest look at resource over-allocation. If you split one person between too many projects, you can overwork them. That means more stress, lower quality work, and the chance that they quit.

To avoid over-allocation, you’ll either have to assign more resources to a task/project, substitute resources, or deprioritize certain tasks for the time being. task prioritization

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#6. Review your resource allocation process regularly

Continuous improvement is the name of the game in your resource allocation process. Analyze each project after its completion to see how effectively you allocated and utilized resources, and whether or not you met deadlines and budget constraints.

Prioritize resource allocation for better performance

Creating an effective resource allocation plan is the key to ensuring a smooth project process with on-time and on-budget delivery. It helps get you the best possible return on each of your resources by decreasing delays in work, adapting to scope changes, and more.

Follow the tips mentioned above to create a resource allocation plan that carries your projects to success. Make sure that you use a project management software platform with resource allocation functions — like the one included with It makes the process much easier.

Rachel Hakoune is a Content Marketing Manager at Originally from Atlanta, she is finding the balance between southern charm and Israeli chutzpah.
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