Cost is a constraint for every business. And when you’re working with a fixed annual budget, prioritizing investments will take you a long way towards reaching your goals. But what happens when you’re expected to achieve more with the same amount of resources as last year (or even less)?
That’s when increasing resource utilization becomes crucial to your team’s success. At its core, this practice revolves around becoming more effective about how resources—whether natural, capital or human—are being allocated in order to maximize profitability per unit.
For natural resources, improving utilization usually revolves around reducing waste from raw materials as per Rosabeth Moss Kanter’s example below.
“The idea is unlock the hidden value of something that would otherwise be wasted. Used tires — a major pollution problem — are being used by Cemex in road beds in Mexico and by Brazilian artists in Sao Paulo to create attractive, comfortable furniture.”
With human resources, things become a bit more complex as utilization improvements can come in many forms. For example, reducing downtime by ensuring that each person always has something to work on, matching the right person to the right assignment based on their skills and experience, sharing people across teams and projects, developing talent and so on.
Start with benchmarking and work towards capacity planning.
In line with Peter Drucker’s famous quote that “if you can’t measure it, you can’t improve it”, we believe that performance management starts with understanding where we are today and working towards a clearly-defined goal. As such, improving resource utilization begins with analyzing historical data and measuring ongoing performance—and that’s where a solution like Project Online can help you measure capacity as well as demand for resources across your organization.
Utilization data enables organizations to effectively undertake capacity planning, based on granular data on how resource groups and/or individuals perform. And once you’re in planning mode, you’ll be able to forecast, manage and control resource utilization moving forward to deliver more with less.