{"id":36247,"date":"2024-10-01T11:30:35","date_gmt":"2024-10-01T16:30:35","guid":{"rendered":"https:\/\/www.projectmanager.com\/?p=36247"},"modified":"2026-04-24T16:10:45","modified_gmt":"2026-04-24T21:10:45","slug":"resource-allocation","status":"publish","type":"post","link":"https:\/\/www.projectmanager.com\/blog\/resource-allocation","title":{"rendered":"What Is Resource Allocation in Project Management?"},"content":{"rendered":"

Projects require many resources. Everything from the people you\u2019re working with and the equipment they\u2019re using, to the materials and other supplies you need to even the site where you\u2019re working falls under the umbrella of project resource allocation. Let\u2019s explore what resource allocation is, why it’s so important for project management and what tools you can use to better allocate your project resources.<\/p>\n

What Is Resource Allocation?<\/h2>\n

Resource allocation is the process of scheduling resources such as labor, materials or equipment to complete tasks. Organizations need resources to carry out the processes they operate normally and to execute operational and strategic projects to achieve specific goals.<\/p>\n

This means the resource allocation process is integral in project management and strategic planning. Here\u2019s a quick overview of the importance of resource allocation in these two areas.<\/p>\n

Resource Allocation in Project Management<\/h2>\n

Resource allocation is a step in the larger project resource management process that involves estimating resources, procuring resources, allocating resources and tracking resources<\/a> until the project is completed. The main objective of the project resource allocation stage is to ensure that resources are spent as efficiently as possible to minimize costs and avoid delays.<\/p>\n

If a project team overspends resources on a task, the whole project schedule and budget might be affected as these resources need to be acquired again, generating additional costs and possibly extending the project timeline.<\/p>\n

Once you\u2019ve acquired your project resources, you should use project management software to plan how they\u2019ll be allocated. That way you can coordinate them with your project schedule and distribute them across your team. In ProjectManager<\/a>, for instance, you can manage your project schedule, team and non-human resources in one place. Build your schedule on a Gantt and track your resource distribution, progress and labor costs in one software. Try it free today!<\/p>\n

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ProjectManager has advanced resource management tools and features. Learn more<\/a><\/figcaption><\/figure>\n

Resource Allocation Example<\/h2>\n

To better understand resource allocation, let\u2019s look at a real-life example. In this case, we\u2019ll review the construction of a 10-story office building located in an urban business district. The timeline for the project is 12 months. As with most construction projects, the first stage of execution involves site preparation, foundation work and then structural construction.<\/p>\n

This work will be done across multiple teams, including engineers, architects, construction workers, electricians and interior designers. These organizational resources must be effectively utilized<\/a> to make sure that skilled personnel, materials and equipment are deployed at the right time to avoid delays and cost overruns. The project has been divided into phases, teams assigned to work from site preparation to final handover and contingency plans are drawn up to respond quickly to unexpected issues that could impact the project scope.<\/p>\n

In terms of resource allocation, labor<\/a> will be first listed and the roles and responsibilities of team members will be defined. The number of people required is then added, such as one project manager, 20 construction workers and so forth. The utilization timeline is determined and tasks are outlined.<\/p>\n\"Resource\n

The same is done for materials. They\u2019re listed and the quantity needed is determined as well as the duration of their need in the project. The tasks in which these materials are used are also defined and any resource constraints<\/a> affecting their allocation are identified.<\/p>\n\"Material\n

The next organizational resource<\/a> to be allocated is equipment. Again, the needed equipment is listed, the number of each noted and the timeframe in which the equipment will be used in the project as well as the tasks they\u2019ll be used for.<\/p>\n\"Equipment\n

Finance is also a resource and it requires the same breakdown. Financial resources are listed, the allocated budget calculated, the timeframe estimate and the purpose for the funds are defined.<\/p>\n\"Financial\n

Resource Allocation Template<\/h2>\n

While project management software is a better tool to use for resource allocation, those not ready to upgrade can use this free resource allocation template for Excel or any of our free resource management templates<\/a>. It lists all the resources required to execute the project, their role, quantity, duration, tasks and more.<\/p>\n\"Resource<\/a>\n

Resource Allocation in Strategic Management<\/h2>\n

Resource allocation plays an important role when an organization is planning its business strategy for the future. This is described in a document known as the strategic plan, which outlines the key goals and objectives of the organization for a period from three to five years.<\/p>\n

These goals and objectives are accompanied by an action plan detailing the actions, projects and strategic initiatives the organization will take to achieve them. All of these require resources<\/a>, which need to be acquired, allocated and monitored.<\/p>\n

Why Is Resource Allocation Important?<\/h2>\n

As difficult as it might be to allocate resources correctly over the life cycle of a project, it\u2019s an essential part of any thorough project management plan<\/a> and should be done in the planning stage of a project. This keeps costs down, maximizes productivity and helps with team morale. It also facilitates client satisfaction by achieving the best outcome and successfully delivering the project.<\/p>\n

What Is a Resource Allocation Plan?<\/h2>\n

A resource allocation plan describes in detail what resources will be utilized for each project task, noting quantities, specifications and due dates for their utilization. There’s no standard way of making a resource allocation plan, it might include a variety of resource management charts such as a resource allocation graph, project calendar, Gantt chart<\/a> or any other diagram that can be used to visualize how resources are allocated over a project timeline or a project task list.<\/p>\n

However, here are some basic elements that should be included in any resource allocation plan.<\/p>\n

1. Identification of Resource Requirements<\/h3>\n

List all the resources by type, such as human, financial, physical and technology resources. This resource inventory is a critical first step in planning which resources are needed and when.<\/p>\n

2. Overview of Current Resource Availability<\/h3>\n

To ensure that resources are delivered when they\u2019re needed, they have to be available. Therefore, it\u2019s important to understand the availability of resources. For example, human resources managers must know their working hours, when there are holidays, PTO and vacation time.<\/p>\n

3. Resource Schedule<\/h3>\n

Create a timeline, which is a detailed schedule that outlines when each resource will be needed and for how long. Add milestones<\/a> to indicate important dates, such as the end of one phase and the beginning of another. This will help track resource allocation and progress.<\/p>\n

4. Cost of Resources<\/h3>\n

The next step is budgeting these resources, which requires estimating the financial funding for each resource, including salaries, materials, overhead, etc. Keep in mind that any budget limitations may affect resource allocation decisions.<\/p>\n

5. Resource Tracking Tools and Techniques<\/h3>\n

Once the project is underway, resource tracking<\/a> is essential to avoid delays and cost overruns. Methods for tracking resource usage and availability must be determined. Performance metrics should also be defined to assess the effectiveness of resource allocation.
\n<\/a>
\nIn most cases, the resource allocation plan is part of the resource management plan<\/a>, a document that guides all the project team’s resource management efforts.<\/p>\n

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Get your free<\/p>\n

Resource Allocation Template<\/h3>\n

\n\tUse this free Resource Allocation Template for Excel to manage your projects better.<\/p>\n\t\t