Today, we are in a service economy. The services sector, including professional services, marketing, IT, and consulting has experienced vast growth in the last decade.
As per a survey, it is estimated that the professional services industry will generate astonishing, $3 trillion revenue globally in the year 2017. This number is expected to grow drastically in the years ahead. However, the services industry has entered into significant transition. When the state of the services economy surveyed in the year 2017, half of the executives stated that it has become increasingly difficult to operate services business profitability.
So, how can a services organization take advantage from increased demand and opportunities, while trying to sail over new pressures on their business? They have to completely revise the outdated and completely inadequate business models.
Today Resource Management is the Biggest Challenge to Service Organizations
In the service industry, your people are your product. Project success, profitability and customer satisfaction all depend on effective planning and staffing of our resources. It may sound simple, but those who do resource management will be able to understand better. This is the most complicated component for service business. That’s why it is known as the “secret art” of service delivery.
However, very few put efforts to get it right. Proper resource management will decide whether you succeed in the Service Level Economy, or not. We hope the below-discussed points will help you in implementing the change.
Resource management is really tricky and misunderstood. If we look into history, most of the services organizations have been able to manage and schedule resources to projects in informal and isolated ways. Even the experienced firms with mature processes rely on a sophisticated web of spreadsheets to tackle resource management.
As the complexity in delivering a service raises many firms today are finding informal resource management processes, which are completely breaking down and creating varying levels of chaos through the process.
Lack of Knowledge Fundamentals
Very few people are having knowledge of how to practice resource management. And also very little published content and education available for consumption. Yet many people acknowledge that resource management is one of the biggest challenges for those who do project-based work. Resource management issues are constantly the biggest challenges to organizations that practice project management.
Problem with the current level of thinking is that resource management often addresses one portion of the project delivery lifecycle, instead of considering the flow and constant change of resource needs. As projects, progress, project managers and resource managers make forceful efforts to see how changing resource needs affect success and profitability of a project. One thing is very clear resource change happens and will continue to happen. Businesses which struggle to adapt to the change quickly in the Service Level Economy will fight to survive.
If you are in a services industry, your bottom line has a difficulty in accessing resources with the right capabilities, on the right assignments, at the right margins. Then you should consider a new approach immediately.
A New Business Model is not an option, it is a Requirement
The resource management process is broken down today, so let’s come up with a solution. If you sell a service it should be profitable. To do that you need to properly estimate the time and resources required to deliver the service. Also, ensure that service delivery meets or exceeds customer expectations.
The task is not selling projects with better margins. But the actual difficulty is managing all the changes that occur once the project starts and tracking those changes across various timelines. Resource management is an ongoing process that can be achieved by a single step or series of steps.
To make firms think more realistically about resource management, there is a framework which can be applied to the project lifecycle of services businesses: The Resource Management Lifecycle.
An Introduction to Resource Management Lifecycle
Resource Management Lifecycle consists of five phases to view project delivery lifecycle from inception to analysis namely:
Estimate, Plan, Execute, Analyze, Optimize.
After each stage, there is an evaluation check to track both the previous and next phase in the process. Optimization, which is the last stage, will serve as a feedback loop to inform the Estimation stage. By considering resource management as a continuous loop, be prepared for conflicts and to make proactive changes to your plan, your project, your team and increase profitability.
However, the unique quality of The Resource Management Lifecycle is that it helps to create order within the chaos. Even though there are lots of moving parts, each phase highlights only a few things to consider. It makes the model very simple to apply and adhere to.