Inefficient project management processes waste nearly 12% of organizational resources. Unfortunately, most processes can’t be changed by the time projects start. To truly set projects up for success, companies need to start upstream of project management.

Before project managers start planning project details, companies should invest in a strategic resource allocation tool that helps them forecast their resource needs and analyze the gap between capacity and demand. This will help organizations better determine which initiatives benefit them most and which they shouldn’t take on.

This article will highlight companies’ top challenges when allocating resources and planning projects and discuss how resource allocation tools can help improve project and business outcomes.

Challenge 1: The organization takes on too many projects, including ones that don’t advance strategic business objectives

In many organizations, the vast majority of projects are planned in silos – in departments or teams where no one consulted one another. Planning projects in silos is a common saboteur of success. Of course, each business unit (BU) or function will independently plan and execute some projects for their function. However, when an organization doesn’t look at its proposed projects in aggregate, it will likely encounter two issues.

The first is competition for resources between function areas. Business leaders and managers often have unrealistically long to-do lists. Some items on their to-do lists require the same limited resources (e.g., people with particular, in-demand skills). It’s too easy for those resources to be overcommitted and overscheduled without sufficient visibility and a higher-level view.  When this problem isn’t identified in the planning phase, it’s likely to cause project delays and bottlenecks in the execution phase.

The second issue with siloed projects is wasted effort. Without a holistic view of all projects company-wide that support a particular initiative or objective, it’s challenging to spot projects that may be redundant. Employees may also work on projects that don’t fully align with corporate goals or contribute to the organization’s overall progress.


So, how can an organization better prioritize projects and allocate resources?  Here are three steps to complete to ensure that your organization uses its resources most effectively.

1. Develop a common language (metrics) for measuring projects’ costs and benefits.

Gather key leaders to think through what key metrics you want to use across the board to measure the value, efficacy, and costs of all significant projects (e.g., ones that consume a certain level of resources or budget). This exercise will help your organization select projects based on their value to the organization, which often leads to doing fewer but more impactful projects.

2. Group projects and initiatives by business objective or theme. Look at projects as a portfolio.

Once an organization and its leaders agree on the higher-level objectives they are pursuing within the company and the shared key metrics to use across the board, they should group the proposed and in-flight projects by objective or theme (e.g., projects around improving customer satisfaction vs. improving internal operational efficiency).

Many projects look attractive in isolation, but when you compare them side by side, you realize that not all are necessary or should be done at once. For example, you may notice that two projects may require similar levels of resources, but they have disparate levels of impact or value potential. Doing too many projects at once may blow up your company’s budget and cause it to burn through too much cash. The overhead in managing projects increases as an organization takes on more projects.

Additionally, leaders may need to ask themselves whether the sequencing of projects makes sense.

3. Start by forecasting resources for your highest-impact, cross-functional projects.

Choose to prioritize the most significant, impactful cross-functional projects first.  Once you’ve decided to do those projects, estimate what roles are needed and how much time and budget are required. Then, see what you’re left with. From there, it’s easier to evaluate your options and determine the most sensible one: Hiring specific roles, pulling budget from elsewhere to fund additional projects, delaying other projects, or not doing them at all.

Of course, doing this hinges on accurately understanding the total available resources within your organization. This brings us to the next issue.

Challenge 2: Leaders lack visibility into available resources and their capacity

Data-Driven Resource Allocation

Unfortunately, many companies don’t have an up-to-date, centralized system that keeps up-to-date information about roles, people, and availability. Thus, it’s nearly impossible to allocate resources to projects optimally. Many companies use static systems, such as spreadsheets, which are often not updated or shared with the necessary team members. Spreadsheets also aren’t tied to the company’s current roster of employees in the HRIS system.

Even when an organization has a list of resources it is tracking for projects in a central system, this system is often used in a limited fashion, such as only by a single department (e.g., IT). The system may not accommodate tracking resources more flexibly, such as by initiative type, workstream, value stream, or portfolio theme. Additionally, managers often aren’t required to share information about which resources they’re using, so the list of resources may not be accurate.


To better understand which resources are available, you’ll need an intuitive resource allocation tool that multiple departments can use to track roles and availability.

In this system, start by creating a structure and hierarchy for organizing and grouping your projects (the structure you choose should make it easy for you and your leaders to analyze projects based on how they advance business objectives). For instance, you may say that the top level of the hierarchy is “programs”; each program supports a key company-level objective. Then, each program contains “initiatives”. Then each initiative contains “projects”.

Then, you’ll work with departmental and key initiative leaders to enter the roles (types, level, skills) and people they have who would work on their initiatives in the system. These will be estimates and should be based on the current employee roster. The ultimate goal of this exercise is to get clarity on the number of employees and the roles they can take on and be able to see this data in multiple slices (e.g., at a program level and an initiative level). This will help you and others decide whether you need to pursue ulterior routes to be able to execute projects (e.g., hire contractors, add more headcount for FTEs, upskill current employees with necessary skills).

Challenge 3: Capacity models do not reflect real-life circumstances

No matter how neat your plan may look on paper, capacity forecasting is difficult because projects deal with humans. In reality, most people often aren’t 100% dedicated to a single project every day for the entire project duration, despite what the models say. A capacity model often labels someone as 100% unavailable while labeling another person as fully available, but that’s rarely true in the real world. Even if that model were perfect in its role dedication, it wouldn’t consider other issues, such as employees burning out, people leaving the company, or key players taking another role within the company and leaving those responsibilities.


To forecast capacity realistically, you must uncover people’s actual time patterns over a project’s lifecycle and model that data in the resource allocation system.

Start by building a variable capacity system where work streams are set up, and all roles needed for a workstream are documented. Then, teams can look at each project and define the major milestones. From there, teams can realistically model the time allocations of each role based on where each role fits in a project. For example, some roles may be heavily involved at the beginning of a project and then less involved later; others may only be needed once many foundational tasks have been completed, and others may need to pop in and out to advise at specific turning points.

When each role is accurately mapped out with start and end dates (or associated with the project’s particular phase(s) they actively contribute to), you can find the optimal project schedules and sequencing in a given workstream.

PPM Express also suggests that companies can more accurately forecast capacity by using strategic resource allocation tools to build flexible resource constraint scheduling with buffer time to accommodate possible delays and conducting regular resource assessments throughout the project to allow for adjustments.

Challenge 4: The actual utilization of resources is not tracked fully—or at all.

Many companies thought they had reasonable estimates of how much time roles would take on projects, but they’ll never really know because the talent working on the projects didn’t track their time. Without proper data from tracking projects, companies are left wondering how many resources the project actually took and how accurate their estimates were.

This not only prevents leaders from understanding the resources consumed by the project but also prevents them from accurately allocating resources for future projects. This perpetuates a vicious cycle of scope creep, poor forecasting, and disorganization. Without proper tracking and data on resource consumption, it’s also tough to track the ROI of the projects.


What if you don’t want people to fill out time sheets? We know how tedious filling time sheets can be; they simply won’t work for some organizations and types of workers. Here’s an alternative: Instead of tracking the actual time and dates each individual spent on a project, you can set up key milestones in the project (which are aligned to when someone is “done” with their portion of the work). You can move out the date of a milestone if it slips; that action communicates to others that the resources/people needed to hit that milestone aren’t available yet to be redeployed on other work.

Additionally, project teams need to communicate and document when they notice that actual resource consumption differs from the expectations. To that end, project managers must also make it easy for project participants to provide updates about their work and keep project resource utilization records up-to-date.

How Shibumi Optimizes Resource Allocation

Resource allocation tools can solve common challenges with optimal resource allocation—such as siloed planning, poor visibility into resource availability, imprecise resource forecasting, and a lack of resource tracking. Shibumi’s resource allocation module within our strategic portfolio management software was created to support upstream resource allocation and planning so that projects can run smoothly later.

Shibumi’s strategic portfolio management software helps organizations improve their planning, prioritization, and execution of strategic projects and initiatives. Many medium and large enterprises have chosen Shibumi because they can do their resource allocation and capacity planning in the same solution where strategic planning and work/project planning happen.

With all of these processes managed from the same solution, leaders and project managers can easily see what matters to the company, the impact and costs of projects in the aggregate and through different lenses, the resource demands vs. the capacity, and use this information to make prioritize projects and make the best resourcing decisions.


Shibumi’s resource allocation module allows an organization to track resource-related information, such as the types of resources it has and needs (e.g., roles/people vs. equipment vs. software), the number of resources (e.g., number of project managers), the capacity of those resources, the demand for those resources (potential projects that would need to utilize those resources), and the resources’ costs. Company leaders can see the total resource requirements for an entire project portfolio and assess the feasibility of projects.

To see how Shibumi’s solution can make your resource allocation and forecasting processes more manageable and accurate, schedule a demo here.