Resource optimization is the set of processes and methods to match the available resources (human, machinery, financial) with the needs of the organization in order to achieve established goals. Optimization consists in achieving desired results within a set timeframe and budget with minimum usage of the resources themselves. The need to optimize resources is particularly evident when the organization’s demands tend to saturate and/or exceed the resources currently available.
When a company is managed using a systemic approach, resource optimization is strictly linked to the concept of constraint and a systemic vision of the company. Indeed, without a systemic vision of the company we are unable to identify the global effectiveness of resource allocation and we run the risk of using resources available mainly to respond to emergencies that daily occur in the various parts of the organization.
Intelligent Management sees the structure of an organization as a network of projects which cut across company “functions”, in contrast with the hierarchical view of a company divided up into silos unable to recognize precise patterns and rules of interdependencies.
When we manage a company as a network of projects we must be able to allocate the resources available in the most efficient way possible, always bearing in mind that we have to achieve the global goal.
A project is itself a system: a network of elements (tasks) that are interconnected and interdependent, that work together to achieve a precise goal. The fact that the tasks are carried out by a pool of finite resources means that optimizing the sequence of tasks is a matter of considerable complexity. (cf. the well-known problem of P vs NP).
A further level of complexity is due to the human factor connected with determining the length of individual tasks. It is well known that if we are asked by our boss how long it takes us to complete a certain task, we tend to protect ourselves by asking for considerably more time than is strictly necessary. This is made worse by multitasking (the tendency to do several things in parallel). While multitasking is very useful for computers it is decidedly counterproductive for the human mind. Finally, there is the effect of the so-called student syndrome, in other words whenever we have more time than we need to do something we will always put it off until the last minute.
An efficient use of resources to carry out a project requires us to:
The situation becomes more complex when multiple projects have to be managed, and possibly by different people. When a resource becomes unavailable, let’s say they are ill, ways to take corrective actions must be available other than just delaying the related tasks. Although ultimately the decision is taken by the project manager, the Information System can provide useful information to support such decisions. The correct way to handle multi-projects is to have a pool of resources with some degree of interchangeability and a way to communicate through different projects so as to be able to do a partial reallocation of the tasks.
Announcing Ess3ntial – our new software for multi-projects
Projects require a pool of competencies and every person in the company brings a set of competencies at various levels. When we have a way to schedule those competencies into projects, we can truly unlock the potential of all the resources available. We can facilitate teamwork by removing the barriers that prevent it, orchestrating people’s talents and skills in a time-sensitive and continuously evolving Network of Projects. By scheduling available competencies, we gain unprecedented flexibility and we accelerate project completion. This accelerates the achievement of the overall goal of the organization, financial or otherwise.
Ess3ntial is a software platform that enables managers to work with a Network of Projects at finite capacity by scheduling competencies according to their availability. The engine of the software is the Critical Chain algorithm, appropriately modified by Intelligent Management to account for multiple projects and to manage levels of competencies. We started from the math; we wrote the algorithm, built the code and developed it into a software solution. Moreover, we have introduced a statistical understanding of Project Buffer variation that allows a true insight into project progress, far from the fallacies of the three-zone, spec-induced and tampering-prone management approach.
See our blog posts:
Deming and Goldratt: The Software
Resource Optimization: Don’t Make the 100% Mistake