10 Tips for Resource Estimation in Project Management

Resource estimation

What is the trickiest part of project management for you? Today remains competitive; organizations have to deliver projects under various constraints, such as limited budget, time and effort, and predetermined scope. Similarly, human resources are another big constraint that should be kept in mind and managed effectively. But how can you do that? If the project managers are sure of the resources they would need for successfully executing the project, then the battle is won. But the question is: how to do resource estimation accurately? Here resources mean all the assets needed for a business to run successfully or meet the established organizational objectives. However, doing this resource estimation for various projects is not as simple as it may sound. Before talking about the steps to estimate resources, let's see what is meant by resource estimation.

What is Resource Estimation in Project Management?

When you evaluate how many and which different types of people or resources you may need for an upcoming project, that is termed resource estimation. These resources could include employees, tools, equipment, material or supplies, machinery, etc. For example, if a website creation project is coming up, you will need to determine how many designers, programmers, and content writers you need. Besides that, you also need to finalize an estimate of the machinery, equipment, or tools needed to execute the project. This process of determining the type, quantity, and quality of all resources required for a task or project is termed as resource estimation.

Tips for Resource Estimation in Project Management

The number of actual resources you need for executing a project, depends on how productive are the team members? Their skill set, the feedback from the client and stakeholders, and how many iterations you end up doing? Resource management is the key step in project management, and how you calculate your resource requirement makes a huge difference. Here are some tips to do accurate resource estimation.

1. Be Aware of the Scope and Project Volume

If the team leads and project coordinators have a clear understanding of the scope of the project/task before doing resource estimation, then there are lesser chances of failure. It's important to know what that particular project is about, the associated activities, deliverables, and schedule? Knowing all this beforehand will help you gauge how many resources are required and competencies. Calculating the scope of work or a project means defining the tasks, sub-tasks, deliverables, challenges, and timelines. Accurate calculation helps predict the cost of resources, duration, effort, potential roadblocks that may delay the project, etc.

2. Know the Resources Well

As per the project management standards, no employee can be 100% utilized. On average, project managers expect 80% utilization for their resources. But having said that, some people could be a little less or more productive as compared to others. Resource and project managers also need to consider any planned leaves, vacations, average sick days, etc, that impact productivity and deliverables. This is the reason that having the right awareness about your team, their plans, interests, competencies always helps in doing resource estimation.

3. Review the Task List and the Work Breakdown Structure (WBS)

When a project begins, one of the first steps in creating a WBS. That gives you a list of all the tasks and sub-tasks in a project. The resources required for a particular project will always be tied to the WBS and task list. That is why creating the WBS is very important before beginning any project. Also, once the WBS is made and reviewed, only then should you proceed to identify resource availability. This way, you will know which resource suits which task or work.

4. Give a Heads-up to the Project or Resource Manager

The next step is to provide the resource details and requirements to the resource or project manager. This will help them to identify the best fit resources for their project. Then, resource planning and scheduling can be done depending on the priority. Using a resource management tool enables project managers to estimate resources accurately and send the resourcing requests to the resource manager. If you use a project management tool, the process will be documented and reviewed easily. This eradicates any conflicts and helps in precise resource estimation and seamless resource management.

5. Check Availability of Resources

It is impossible to estimate the resources needed in any project without checking their availability. To deliver high-quality projects, you need the best resources who possess the required skill set. Otherwise, you won't hit the bull's eye. Hence, you should first check if the kind and number of resources you need are available or not. Also, check if you have sufficient staffing, the right type of tools, the number of machines and equipment needed, etc. This will help you get an accurate estimate of the resources you may have to outsource.

6. Reuse Previous Project Resource Plans that Worked Well

If you have any good examples of successful projects, then reuse that project resource template. Some leading resource management tools like eResource Scheduler save the template along with all details, which can be used later. You can also use some role-based templates to input how long you need a person in a particular role. For example, a programmer or content writer, and then you can easily allocate resources for an upcoming project by using that template.

7. Evaluate Historical Data

Data from previous projects have a big role in resource estimation or when the project budget is being decided. Thus, when calculating the resources needed for a given project, remember to review historical data and assess the reuse of resources. Your project would probably not be something that the organization hasn't done before. So, if you find any previous projects similar to the one you have, you can check what type and quantity of resources were used. In addition, using such historical data always provides you with a starting point, which may be beneficial in saving your effort.

8. Project Cost

This is another important factor to consider. It's good to look at the project's scope of work, schedule, and resource requirements to estimate the project cost precisely. When you have all such important elements defined, you can easily estimate and find the entire cost range. You can also find the historical data regarding past project costs for the same or similar clients to make a comparison. This will help you to have more precise data and closer resource estimation.

9. Explore Outsourcing Projects or Tasks for Short-term Opportunities

Hiring permanent employees can be tedious and expensive. You can also consider hiring contingent resources such as contractual or temp workers or freelancers only for particular project duration. You can also consider a vendor who can take up a specific project. On-demand workforce or resources do not require any lead time and overhead costs. If you use resource management software, you can easily use multiple filters to identify cost-effective resources from the global organizational pool. This helps in assigning resources at a considerably lower cost while maintaining the project quality.

10. Risk Factors and Challenges

After you have a complete insight into the project requirements, you should also identify various unforeseen risks and challenges that may crop up. Think of everything that can derail the project and determine how to avoid it. You should also calculate a buffer for resourcing needs at this stage as a team member could go on sudden leave or a scoop creep might happen, which may enhance the workload.

To Conclude

Accurate resource estimation is a very important step in project management. You should identify all the required resources in a given project and check their availability before beginning. Resource estimation helps identify the overall resource costs, timelines, risks related to the projects, and a lot more. To summarize, it can help project managers to gauge various aspects of their future projects.

Implement a Top-Rated Solution eResource Scheduler for Resource Management and Resource Estimation

Implementing the right tool for resource management can bring a huge change in how you operate. If you wish to use your team members optimally while gaining the best utilization numbers, implement eResource Scheduler. This tool can work as an online platform or repository of all your resources, projects, and data. It offers you real-time visibility of the projects and resources and their performance. You can easily track and analyze the utilization metrics, gain insight into each project or resource's profitability at every level. The software also allows gaining visibility into the cost of bench-time. So, log in to this project management tool and easily spot the projects that bring down your company's profits and which ones bring growth. Have any specific questions? Sign up today for a free trial and confidently choose this award-winning tool for resource estimation.

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