One of the most common problems we all encounter while projects are running is resource shortage. What can be done if that happens to your project?
Resource leveling is one good approach I talked about before. But if your project has a deadline that you can’t stretch by an inch, what do you need is resource smoothing.
Read this article to learn what resource smoothing is, how it differs from resource leveling, and how to improve your project profitability with it.
What can you gain from resource smoothing?
Resource smoothing is one of those helpful optimization techniques that help you adjust your project activities to match the available resources.
It ensures that the project gets completed within the resources you budgeted for it. The key goal of resource smoothing is uniform utilization of resources and timely project completion.
Typically, resource smoothing is applied after resource leveling to optimize project costs and use your resources more efficiently (this is where employee utilization rate comes in handy).
Ultimately, resource smoothing is a great method for dealing with the unavoidable delays in projects we know all too well.
By using resource leveling together with resource smoothing, you can reconcile time constraints and resource limits while delivering high-quality work.
What is resource smoothing?
Also called time-constrained scheduling (TCS) or resource-constrained scheduling, resource smoothing is a product management tool for optimizing resources in the project.
The idea behind resource smoothing is adjusting all the activities of the scheduled project to the requirements for resources, ensuring that they don’t go beyond the resource limits already pre-defined during planning.
At the beginning of a project, you set time schedules and then can adjust resources to manage limited availability in a given time.
Resource smoothing works well when time constraints are prioritized over product planning.
The objective of this technique is to complete the work within the required end date and at the same time avoid the peaks and drops in resource utilization.
Resource smoothing vs. resource leveling - what’s the difference?
Project end date is the source of the critical difference between these two tactics.
In resource leveling, the project’s deadline isn’t fixed and can easily change. In resource smoothing, on the other hand, the finish date needs to remain the same. Resource smoothing also allows to occasionally pause activities within the specified timeframe.
In resource leveling, you tend to schedule when resources are either over- or under-allocated. Contrary to that, resource smoothing scheduling is set up when resources are allocated evenly.
The primary constraint in resource leveling is the available resources. In resource smoothing, the main constraint of the project is its end date.
Resource leveling usually happens at the initial stages of the project, and resource smoothing is most often carried out after resource leveling.
- The project’s finish date is fixed.
- Scheduling is set up when resources are allocated evenly.
- The main constraint of the project is its end date.
- It’s most often carried out after resource leveling.
- The project’s deadline isn’t fixed and can easily change.
- Scheduling when resources are either over- or under-allocated.
- The primary constraint is the available resources.
- Usually happens at the initial stages of the project.
Example resource smoothing flow
Step 1: Critical path method application
A PM can start with the Critical path method to analyze the project at hand and determine its critical path.
I’m not going to explain the critical path theory in detail here, but the important thing is that in the end, you understand what your resource constraints are and how they can impact your project.
Step 2: Resource leveling
The next step is the application of resource leveling. Now you can see the maximum number of resources per activity.
To reduce the allocation of resources in places where you don’t need them, you will need to expand the duration of an activity. Note that this will increase the duration of the entire critical path.
Step 3: Resource smoothing
After applying resource leveling, it’s time to focus on the end date and apply resource smoothing.
After following all the steps, you get a resource-constrained schedule where the resource allocation is fully optimized.
5 resource smoothing strategies for an IT company
1. Project prioritization
Imagine that you’re approached by two different clients with two different projects. It just so happens that you have resources for realizing only one of them.
So, which one should you proceed with?
The one that gives you a better profit margin and increases your bottom line.
But how can you know that if you don’t have a tool that allows you to simulate different scenarios with different hourly rates?
This is where a product management solution comes in handy. It gives you all the insights for resource leveling and allocations to prioritize projects correctly.
2. Clarity about employee utilization rate
If you put someone in a demanding project, placing them in another challenging project with overtime is a bad idea.
Planning employee availability with their capacity and motivation in mind is critical if you want to maintain a high level of the work delivered.
It’s important that their availability is visible to other people as well, so the employee never ends up in a stream of demanding projects.
This will also make them calmer because they know what their future looks like. They’re motivated because they know their well-being is taken care of.
The process becomes fully transparent when team members know exactly what’s happening. This can become an important point in employer branding, especially if you struggle to attract IT experts (and who doesn’t?).
3. Bird’s eye view of your project and company
Having a bird’s eye view of everything happening in your company - including project profitability, resource allocation, and utilization rate - is critical.
That way, you can focus on areas where resource smoothing can make a real difference. Otherwise, you might apply resource smoothing where it’s not really needed or not going to make a big impact on your profit margin.
4. Excellent financial reporting
Financial reports show you whether the resource smoothing activity actually works and brings you benefits.
Here’s why it’s important:
It often happens that when you’re pressured by a deadline, you stop paying attention to the actual resources involved. This might lead you to get experts with very high hourly rates and dramatically reduce the project’s profit margin.
Luckily, reporting comes in handy here because you can run an informed retrospective and learn whether what you did had an impact on the profit margin - and by how much. You will get all the insights and lessons learned to use in the future.
If you don’t carry out a retrospective after the project, you cannot consider the project as finished. You need these insights to use them in your next project and improve how you work.
5. Use a tool for smarter resource smoothing
You can get all of the functionalities essentials mentioned above in Primetric.
Book a demo with me, and I’ll show you how you can use these data and insights to boost your resource smoothing strategy and ensure the optimal utilization of your resources while your project runs and within schedule.