Benefits of Resource Allocation in Project Management

“All companies have many opportunities. The difference is about the allocation of resources and priorities.” – Michael J. Silverstein

Rightly said. As resources are significant investments for any organization, allocating and utilizing them effectively is the key to gaining ROI and profitability.

But it is often easier said than done, right?

To accomplish competent resource allocation, managers need to consider employees’ skills, qualifications, cost rates, schedules, and other attributes. It helps to utilize them effectively, diversify employee skillset, and ensure that projects are delivered on time and within budget.

This article elucidates the benefits of competent resource allocation and how a resource management solution can facilitate it.

But first, let’s begin with the basics.

What is resource allocation in project management?

Resource allocation is the process of identifying and assigning resources to various projects/activities for a specific period. A robust resource allocation strategy enables the uniform distribution of the available resources to multiple projects.

Let’s understand it with an example of an IT project that requires design architects who are often few in number and expensive for system design work. In addition, they need to be involved right from the start of the project for the design work, making it crucial for delivery. So, the question of whether a design architect can be deployed fully to a single project or shared among projects often arises.

This decision on resource allocation in an organization depends on various factors, including the architect’s availability, projects’ priority order, cost, and so on.  Nevertheless, with the right resource allocation plan, one can tap into the maximum potential of resources and ensure a project’s success.

Now that the concept of resource allocation is clear, let’s understand its benefits in detail.

How is effective resource allocation beneficial for project delivery?

An efficient resource allocation process allows you to plan and prepare for projects in advance and ensure high productivity.

The following are key benefits of resource allocation in project management.

Reduces project resource costs significantly

Resource allocation helps in identifying and allocating the best-fit available resources to each project. Moreover, efficient allocation enables managers to go beyond matrix boundaries and deploy cost-effective global resources.

It allows organizations to build the right mix of senior critical resources and junior employees. This helps reduce the overutilization of niche skilled resources and provides non-critical resources an opportunity to diversify their skills. Moreover, a judicious mix of resources with different cost rates also helps control the overall project costs.

Maximizes profitable resource utilization

When employees spend most of their available time in non-billable or admin activities, it causes billing losses and impacts profitability. Therefore, resource managers should ensure that they are allocating them to billable tasks for most of their available time.

Using real-time data and forecasting, managers can mobilize resources from non-billable to billable or strategic work and avoid under or overallocation in advance. Thus, it facilitates optimum utilization levels of resources and improves business efficiency.

 Prevents overutilization and burnout of resources

Managers often overlook resources’ schedules or availability before allocating them to various jobs. It leads to the booking of resources across multiple projects beyond their capacities, which causes overutilization and eventually burnout.

Proper allocation facilitates the assignment of resources to projects and tasks based on their schedules and availability. It also helps managers determine instances of overallocation. That way, they can take course-corrective measures to optimize workload, avoid burnout, and prevent productivity losses.

Facilitates diversification of employee’s skills

Well-planned resource allocation helps deploy resources on different multi-faceted projects. It gives them an opportunity to build secondary and tertiary skills along with their primary ones.

Furthermore, managers can provide hands-on experience to employees through on-the-job/shadowing opportunities to help employees refine their current skills and acquire new ones. This will help them diversify their portfolio and ensure billability.

Boosts employee morale and productivity

An efficient resource allocation approach entails assigning projects or tasks to employees based on not only their availability but also interest. Considering employees’ preferences during work allocation also helps employees feel more valued.

It also fosters a sense of ownership of the assigned job, thereby increasing their performance and productivity. In addition, when resources get an opportunity to work on projects that match their competency and interests, it has a positive effect on their engagement and also boosts their morale.

Enhances client satisfaction

Proper resource allocation in project management helps ensure that projects are not staffed with under/over skilled resources. It also prevents issues like sub-par deliverable quality, stakeholder disagreements, budget/timeline overruns, etc.

When a project is delivered per the client’s expectations, it helps retain their trust and loyalty. This way, it helps maintain the organization’s reputation and enhances client satisfaction levels.

For a successful resource allocation process, organizations need appropriate tools and techniques. Let’s look at how advanced resource management can help streamline resource allocation.

How can advanced resource management software help?

Saviom’s resource management tool provides various functionalities that help deploy the best-fit resources to each job. It offers centralized visibility into all the resource-related information such as qualifications, skills, experience, availability, cost rate, etc. Further, the advanced filter option of the tool allows managers to identify cost-effective and skilled global resources.

Since all the resource-related information can be viewed on one platform with real-time updates, it helps prevent issues like double booking or overallocation.

Additionally, the What-If analysis or scenario modeling functionality of the tool helps create multiple scenarios, compare outcomes, and determine the best-fit resource plan for the project schedule. This enables leveraging the available talent pool to generate maximum ROI in a multi-project environment.

Using the tool, managers can also view real-time utilization heatmap and forecast vs. actual reports and get visibility about the utilization of resources. This enables them to track each resource’s performance and ensure no resource is over/underutilized. Thus, it facilitates managers to optimize the resource health index.


It is established now that resource allocation undoubtedly forms one of the cornerstones of a project’s success. Though it may seem challenging, creating an appropriate allocation strategy and leveraging a suitable resource management solution can help ensure successful project delivery.

So, what’s your move to streamline the resource allocation process?

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