By John Koehler May 17, 2019 A business that wants to be successful in today’s economy will need to understand the resources that it uses, how they function in its business model, and how to make the most out of them. This guide will introduce business managers and owners to the concept of economic resources, discuss some of the challenges that they present, and lay out strategies that every business professional should understand for managing and evaluating resources. By studying business administration, managers and owners can set their companies and themselves up for success. What Is a Resource?In the context of business and economics, a resource is any factor that’s necessary to accomplish a goal or carry out an activity. In short, they are the components that a business needs in order to do business. Resources often include employees, working space, equipment, or capital. Understanding precisely what your business uses is critical in order to ensure that you are making the most of the resources available, and not missing any holes in your business model. Types of ResourcesA business’s resources can be broken down into several different kinds. Some of the most commonly used include:
These are just some of resources that many businesses use every day; this is not an exhaustive list of resources, since every business has its own unique needs. When thinking about the resources that your own business uses, try to consider the things that it needs to keep going, both on a day-to-day scale and in the long term. What Is Resource Management?The resources that a business uses can be broken down into various types. Resource management is the process of allocating resources in order for a company to complete its work in the most efficient way possible. This process is often done by people with training in project management who have the expertise and background to make these kinds of judgments calls on behalf of a business. As business manager or owner, it’s up to you to decide how to best utilize the resources you have available, figure out what additional resources you might need, and determine where resources are being wasted in your business model. Resource management is a necessity for any business that wants to remain competitive with its rivals. Resource Management Key TermsSome key terms often used in discussions of resource management include:
Benefits of Resource ManagementGood resource management can enable a business to excel in its domain. Some of the benefits of managing resources efficiently include:
Ultimately, businesses that practice good resource management are able to produce higher quality work more quickly and with less overhead. It’s clear that every business should take a serious look at its own practices to find the most efficient systems of resource allocation. Challenges of Resource ManagementResource management can be a boon for your business, but that doesn’t mean that it will come easy. Effective resource management can be difficult for a few reasons:
Good resource management can have a huge payoff for your company, but it can also be very difficult to do reliably. People who are trained in performance improvement are better situated to identify and address inefficiencies within a company’s resource management plan. Resource Management Strategies and TechniquesResource management comes with some challenges, but there are also techniques and strategies that can help you overcome these difficulties and lead you towards efficient resource allocation. For business owners and managers who feel uncertain about how to wield resource management strategies, pursuing an MBA can help you learn how to effectively utilize these strategies and know which technique is best-suited to your situation. Resource PlanningResource management, as a term, refers to the overall idea of making informed decisions about where to place resources in order for your business model to run efficiently. Resource planning, however, refers to a particular strategy that can make your resource management more effective. Resource planning involves identifying every resource that will need to be used in order to complete a project. As a strategy, resource planning is often done best when you listen to the input of employees. Speak to the people who are going to do the work on your project and find out exactly what they need to succeed. By doing this before beginning on a project, you can make sure that your teams have everything that they will need before work begins. This may cut down on hiccups in project execution and help your teams become more efficient. Risk ManagementUnexpected events that crop up during a project’s execution are some of the most serious challenges associated with resource management. However, by tallying possible risks before a project begins, considering the likelihood of each individual risk, and developing a risk management plan, it’s possible to smooth out some of the bumps that surprises may cause. Consider some of the risks that companies often face in their day-to-day operations. These might include things like:
Risk management involves identifying the kinds of risks that a project may face and allowing for flexible resource allocation as needed, in order to stop these risks from derailing a project entirely. Estimating and ForecastingEfficient resource allocation often requires that managers and owners understand exactly how much of a given resource a project will need. However, this kind of knowledge is only available after the project has been completed. This is where estimating and forecasting come in. Accurate estimates of the resource demands of a particular project or task can help a company to inform its resource management strategy. Estimates are rarely going to be 100% accurate. However, by evaluating past estimates against actual resource requirements, and asking employees to document their resource usage thoroughly, it’s possible to hone your forecasting process and understand your resource needs more clearly. Resource LevelingResource leveling, also known as resource smoothing, is the process of reallocating resources to avoid underutilization and prevent burnout. For example, if one team is finishing its project ahead of schedule, while another is lagging behind and becoming stressed, resource leveling would involve shifting some of the underworked team’s labor over to the delayed project. By doing this, you could ensure that your labor is being used efficiently while avoiding resource-overallocation. Agile Project ManagementAs we noted above, perfect resource allocation forecasts are extremely rare, if not impossible. However, agile project management can help to mitigate the effects of imperfections in the forecasting process. Agile project management involves approaching a project with a broad vision, rather than a single, well-defined goal. Instead of laying out a rigid project plan, agile project management requires making small course corrections along the way. The end result is that teams that operate under agile project management are able to adapt to changing conditions and handle surprises without being tied to a fixed resource allocation from the beginning. List of Resource Management ToolsIf you are a business owner or manager, resource management is not something that you have to do alone. There are a wide variety of tools that can help you to allocate resources more efficiently. Additionally, while having tools is helpful, a degree in business intelligence can further equip you with the experience, training, and skills that you need to make the informed resource allocation decisions. Nevertheless, below are a few popular resource management tools to help you keep projects running smoothly:
John Koehler is a senior marketing specialist on University of Arkansas Grantham's marketing operations team. John is passionate about enabling education opportunities and a positive experience for prospective students. John holds a Bachelor of Science in Business Administration degree with a concentration in Marketing from Rockhurst University.
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