Resource Allocation in Project Management

Introduction

In project management exists a tight connection between results and resources optimization. An inadequate planning of resource allocation might lead to a non-manageable or non-reasonable budget formulation.

Each organization must wisely allocate resources to avoid delays, rework, nonconformity and to ensure an overall company efficiency in the long run. All companies face the same dilemma at one point, how best allocate resources. Allocating resources to wrong ideas or projects that eventually fail will lead to wastage. On the other hand, not allocating resources in the right ones can lead to even greater opportunity costs. Under and over allocation are the main problems that arise in a non-planned resource allocation scenario.

Is critical to have a planned approach in RA to manage a project portfolio effectively. Being able to allocate the correct resources, in terms of skills and quantity, to the right ideas, projects and products should be the final goal of each project manager.

Resource Allocation

The process of assigning and managing assets in order to support an organization's strategic goals is called resource allocation. In project Management, is the scheduling of activities and resources required by those activities taking into consideration both the project time and the resource availability. It involves balancing competing commitments and priorities in order to determine the most effective course of action to best utilize a limited pool of resources and maximize the return on investment.

Three Core Resources

Land: Natural resource required in production process, land, mineral, forest, oil and water resources.

Labour

Capital