- Resource Management Techniques To Deliver Increased Revenue
Resource Management Techniques To Deliver Increased Revenue
How has technology changed the ways resources are allocated in top-performing services businesses? What are the processes that support this change? How can resource management techniques drive increased operational efficiency and revenue?
Randy Mysliviec discusses resource management disruption in this illuminating podcast, published in advance of the Resource Management Global Symposium in Dallas, Texas on October 3-4.
MD of the Resource Management Institute and CEO of RTM Consulting, Randy advises multi-national organizations on operational efficiency and is an acknowledged expert on the changing practices in resource management.
We are delighted to offer this free podcast, the latest in a series of Professional Services Insights podcasts, as a taster for the forthcoming symposium, which Kimble is co-sponsoring.
Randy Mysliviec – Resource management
Doug D’Argenio: Welcome to the PS Insights podcast series sponsored by Kimble Applications. Professional services organizations strive for efficiency, success, and growth. This series is intended to provide key insights on how to achieve this from industry leaders.
Steve Brooks: Hello, my name is Steve Brooks and today I am talking with Randy Mysliviec about resource management in professional services. Randy has extensive IT and technical services experience including 18 years with IBM serving IT departments around the globe, and 7 years leading technology services operations at Convergys. He now leads RTM Consulting and the Resource Management Institute. Acknowledged by industry sources as an expert in Global Resource Management and author of the Just-in-Time Resourcing brand of solutions, Randy advises multi-national companies with the complex challenge of leveraging services to deliver better outcome focused solutions and operating efficiency.
Randy Mysliviec: Good morning Steve.
Steve Brooks: Randy, what is resource management, in relation to professional services?
Randy Mysliviec: Steve, I think that’s a good question to start on, and it’s probably important to point out what it is as well as what it is not. And I’ll start with what it is, is from a professional services point of view, getting the right person with the right skills in the right place at the right moment in time to perform a given task or project, as professional services teams do, and doing that with consistency. That’s what it is.
What it’s not, is it’s often confused with a human resource-like function, such as payroll or management or performance management for an employee. I’ve also heard people, at times, use the term resource management to describe the management of physical assets. Equipment or cars or buses or industrial equipment or whatever. But that’s what it’s not.
Steve Brooks: And that, I assume, is both for internal, embedded professional services organizations, as well as those servicing customers.
Randy Mysliviec: Yes, it actually applies equally well in either case. Because both have needs to use human capital for professional services to produce a project on time, on budget, great quality, and whether you’re serving an internal client or an external client, doesn’t really matter.
Steve Brooks: Why should a business leader be concerned about resource management?
Randy Mysliviec: Bringing a product to the marketplace really comes down to, again, the implementation of a successful project. If it’s a software product somebody’s implementing, they got to be able to achieve getting that product installed so that it serves the needs of the client as it was intended. And so project performance becomes absolutely critical in all of this, because project performance is key to financial results and producing satisfied customers.
If you look at project performance data across the industry, there are numerous studies that have looked at this, and it’s about 35 percent of the projects that start every day at a professional services team will fail at some level. The either run over budget, they will have quality less than what was desired, the time that it takes to do the project may run off schedule. It’s really, really important. I wrote a white paper probably eight years ago, and it’s called the Project Performance Paradox. We studied, at the time, numerous projects that were going on with companies. Tried to understand what are the real principle causes of project failures. And not surprising to us, is we found it had nothing to do with the implementation of project management capabilities, or quality management capabilities, simply was that organizations where they had project failures were unable to get the right person with the right skills in the right place at the right moment in time to run that project effectively.
It’s not that we don’t think that project management is important, or quality management is important, resources management, is done too often without the right processes or automation tools. very clearly, we have got all kinds of data here at the institute on if you fix RM, you’ll get better project performance, you’ll get better economic results, you’ll have happier customers, and not surprising to us, is you’ll get happier employees, as well.
Steve Brooks: It’s great talking about that kind of vision. But what does “good” look like?
Randy Mysliviec: I would say there are two considerations for thinking about what “good” looks like. One would be how we get there. And second is the results that we expect from the transformation of our resource management processes.
let me start with how we get there. Back in the mid 1970s, I was a young engineer working at a big technology company, helping manufacturing companies to run their manufacturing operations more efficiently and effectively. And back then there was a process coming into vogue, it was called just in time manufacturing. And back then, manufacturers were struggling with how do I get the right part, in the right place, supported by the right production capacity to produce whatever it is I needed to produce in a timely way, with good quality, under budget, et cetera.
If you think about just in time manufacturing. A manufacturer can’t compete unless they’re able to actually execute just in time with their manufacturing environment. We, in a very specific way, just in time manufacturing and applied similar concepts to human capital. And that’s what became just in time resourcing, trademarked by the RMI, which is focused on how do you simply get the right person in the right place with the right skills at the right moment in time.
Back to your question, what does “good” look like? First is how do we get there? You get there with some kind of process focused on that dynamic of getting the right person with the right skills in the right place in time. Just in time resourcing really is made up of six critical elements. One is understanding my skills, who do I have? Where are they located? What capabilities that they have. Combining that with a forecast, and that forecast is a view of what projects do I need to conduct in my professional services organization over some period of time.
The third thing is that I mix my forecast and my understanding of what capabilities and capacities I have with the staffing mechanism to put those two things together. Assigning people to the projects in some kind of a logical way, that most efficiently uses those people.
Then there are three elements that are focused on the infrastructure, development and recruiting. How do I constantly change the mix of skills that people have to reflect the ongoing needs that change over time in any professional services organization? And recruiting, of course, is how do I recruit the right kinds of people that I’m going to need, not only for today, but for the future? We focus organizations on developing a more fluid approach to recruiting instead of the, I’ll say, budget constrained, start-stop approach to hiring that we’ve seen in the industry.
Tools, having a good automation tool to put these processes to work and to automate them in a way that makes them efficient. And then last is governance, which is the sixth element, is what am I going to measure? How am I going to measure it? How do I continuously improve from what I’ve learned?
The second part is simply results. And the kind of results that people are focused on with better resource management are improved project performance, which leads to better financial results, running more projects on time, on budget, with great quality. Improved utilization of my people. Generally, people are a fixed cost to a business, if they’re employees. I want to effectively use their time in a professional services organization, in particular, for billable services. I want to produce good customer service. And lastly, good result would be employee morale. And generally, we find that if you have better resource management, people find they’re in a more planned environment for the projects that they work on. They have more transparency and insight into the kinds of things they might want to be able to work on with the company.
Good results are better project performance, better financial results, better utilization of the people, better customer service, better employee morale, and last but not least, doing this consistently. It can’t be one month we do it well, the next month we don’t, because the minute you’re not doing it consistently, there’s a breakdown in your process somewhere.
Steve Brooks: One of the things that comes out of what you just said there is you need to be able to collect a lot of data in order to have that information that you can then use. Does that form part of how a company can start on that road? What approach should they take?
Randy Mysliviec: Great question. Data collection, if you think, there are multiple sources of the kinds of data you need to support a good just in time resourcing environment. An example would be, I mentioned the skills database is what people do I have? Where are they located? What competencies and skills that they have? One of the things that most companies will do in this environment is to have employees self populating what classes they’ve taken, what skills that they have, what kinds of projects that they’ve worked on. And there’s certainly some kind of management validation to that.
They should be continuously collecting that kind of information, because I want to always know, at any given point, who do I have, where are they located, what capabilities they have, because that gives me the basis for running my projects in the future.
The project information. If you have a good automation tool, hopefully that automation tool is helping you collect what’s the status of that project? How many hours into it am I? How many hours do I have left? When is it going to complete? Am I running ahead of schedule, behind schedule? A good automation tool is allowing you to collect that information along the way.
Forecasting information. You have some kind of a CRM tool that is where you’re collecting information on how are my sales going? And what’s my line of sight to what I’m going to need to do four months from now, or five months from now? One of the challenges that organizations have is that, without a good forecast, how do you really plan for the future? Because human capital doesn’t materialize overnight. We all know that to try to find the right person, with the right skills, I’ve got to go create a job description, I need to have budget for that. I’ve got to go search for the right person, I need to interview them. Then once I finally find them, I’ve got to onboard them. Well that stuff doesn’t happen in cycles of hours. It happens in cycles of months.
Having a nice view for forecast to the future and getting those inputs from sales as an example, gives you the kind of data that you need in order to work a good recourse management environment. Those are three different types of information that you need to be collecting that would be helpful. It’s certainly not a exhaustive list but, hopefully gives you an indication of the kind of things that are important.
Steve Brooks: You talk about skills, and understanding what skills are inside an organization, but we seem to be heading more towards the freelancer or gig economy. Is it becoming the fact that the skills outside the organization are becoming just as important to resource management? And how do you think organizations need to approach that?
Randy Mysliviec: The freelance marketplace is clearly growing quite quickly for a lot of different reasons. Some of it’s big, older world companies that have reduced cost and let people go, but then realized they still need the people and the skills because they can’t necessarily find them in the marketplace. A lot of it is just society has a different view of how long should I stay at a company, and my willingness to move from organization to organization is very different. When I came out of college, I joined IBM and I thought that I’d be there for, till I got my gold watch and left, after 40 years. But that’s not the world we live in today. So, the freelance marketplace is growing.
The great thing about a good resource management process if done well, it anticipates the need for project skills well in advance. If I’ve done it far enough in advance, I have the opportunity to go figure out where can I most inexpensively source those skills?
A good resource management process incorporates a good skills database that has a compliment of partners, contractors and freelancers that I can use to do the work that I need to be done for my organization.
We typically find that the most efficient way for people to manage their resource investment is to have some base level of employee investment, where I know, over a continuous period of time I’m going to need X number of employees, and I figure out where to source those people as economically as I can, where I think I can retain them. But that I draw a cut line, and above that, I decide I’m going to source my peak load needs and other needs of the organization with freelancers, with contractors, with other sources of people.
So, the freelance marketplace is big, it’s growing, there are tools available to help with that. But again, a good resource management process contemplates that once I understand my forecast, that I have multiple sources of where I can actually find those people.
Steve Brooks: In a wider sense, how should a company approach, getting better at resource management?
Randy Mysliviec: It starts with a tops down commitment to what resource management is, why it’s important. It’s really a cultural shift from how we used to match people with demand for our services. And I just said the old way of doing it was, I have managers, they have people that report to them, those managers control where those people work, they are responsible for the work that they are doing, and they might even actually own those projects.
That method of resource management, its time has come and gone. Because what you end of doing in that environment is you bottle-up people in these little silos of your management structure. We encourage organizations, from the tops down, to think about every individual who works for the company as an asset of the company, not an asset of the particular manager who might be responsible for the people management. We start with just getting management to understand. Because that’s going to require some cultural change in a lot of companies. Without that, it really makes it more difficult.
Second thing is to build a process. So I talked about just in time resourcing, you need some kind of a process that says how am I going to understand who I have, what capabilities, capacity, how am I going to forecast, how am I going to match my forecast with my skills database and come up with a staffing assignments for people, how am I going to measure this, how am I going to govern it? You need to build a process.
Third, that process has got to be supported by an automation tool. All these various elements I’ve talked about, forecasting, skills database, staffing assignments, governance, metrics, dashboarding, those are all things that a good automation tool will give you the data you need quickly, timely and allow you to act in a manner that allows you to do these things, as you’ve heard me say, just in time.
There are two things we see people, though, fall down on all the time, on this. And one is, back to the forecast. With human capital, you have to plan in longer term cycles, and so you’re really getting a forecast that’s a good, reasonably accurate four to six months out. We hear organizations tell us all the time, “Well, it’s just not possible in my business. There’s no way we can do that.” Well, we heard that same line of rationale 50 years ago, when we tried to move toward just in time manufacturing and supply chain. Today, if you look at retail establishments, they are reasonably accurate in how many widgets they’re going to sell at a particular store in a particular city four months from now, with tools that they’ve been using to allow them to accomplish this. Building a good forecast mechanism will never be perfect. But you can certainly get better at it.
And the other one is skills database. If I simply don’t know, I’ll go back to my manufacturing example, manufacturers struggled. They had, at the time, they had a litany of despair. Warehouses where parts were kept in different places, and they weren’t always where they needed to be, at the right moment in time to support their manufacturing needs.etting that skills database right is really, really important. And, as I mentioned, from a tools point of view, both of those things, the database and forecast, can really be helped with the right kind of an automation tool.
Steve Brooks: Some people would say, “Well, my project management office solves that. Because they can look across all the managers and draw in the resources.” Is that what you’re talking about?
Randy Mysliviec: No, not really. Cause I made the point earlier that project management’s been around for a long, long time, and one of the shortfalls of project management, if not done correctly, is, as we pointed out some time ago, is resource management. I can have all the right project management processes, but if I can’t simply get the right person, the right skills, and the right place, the right moment in time, all the project management processes I have are never really going to get me there.
The PMO, or the project management office, does play a very important role in organizations, and that’s to manage the project itself. It’s a gateways and checkpoints that you might have as you’re working your way through a project. That’s a separate and distinct process from resource management. The two are related, the two support one another, but they’re really different.
One way they separate in your mind, or anyone’s mind, what the manager of the future looks like is, people management is still important. Managing people’s careers, performance management, who do I, relative to employee morale management. There’s all the things that we do, merit increases for people, in unionized organizations, the complications or specifics that are involved in compliance from a people standpoint don’t go away. They have to be managed by a people manager.
But that’s separate and distinct from what are the people then doing? To my point is, a good resource management environment helps to make sure that we assign the right people to the right projects at the right moment in time.
Steve Brooks: We’ve got the manager in charge of the person doing their kind of personnel issues. We’ve got the project management office running the project. Who is responsible for that resource management if it’s not those two?
Randy Mysliviec: Another great question is that, the emergence of the RMO, the resource management office, is clearly on it’s way up. And a resource management office, in many ways does what the PMO was doing for project management, the RMO does for resource management. It helps to define and build the right type of resource management processes, defining the right kind of enabling technology for those processes, and it manages the governance of those processes, that they’re running efficiently and effectively. So, are we properly building and maintaining the right skills database? Are we properly populating and creating and massaging the right forecast? How’s the process for assigning people to projects, then, working?
These are all things that the resource management office needs to be responsible for. One other thing I’ll mention to that, as well, is that one way to culturally help with organizations bridging this gap, breaking down the silos, is put the RMO in what we affectionately call in Geneva. Some place that’s neutral. Allow the RMO to not have to worry about the influences that a particular manager might have about their desires for a particular individual being on a particular project is, the organization again, if you buy my point that the people are an asset of the corporation, that those people should then be deployed in a place that the corporation most needs them at any given point in time. That may not be where that manager would like them to be. But it, is where the enterprise really needs the person to be.
Steve Brooks: What does that RMO look like? Because a lot of companies will say, “Oh I don’t need another office. I’ve got project management office, I’ve got my hierarchy of managers, and you’re just bringing in another level of people to help run my business?” It’s just going to get too complex.”
Randy Mysliviec:When it comes to the investments needed for resource management, what you’ll find in most organizations where they are doing RM, resource management, what I call the old way, where it’s all being done by the individual people managers, you’ll find that those managers are spending a substantial amount of their time trying to simply find the right person with the right skills at the right moment in time. We’ve done a number of assessment projects in our parent company, RTM Consulting, where we looked at how they’re doing resource management today. And in many cases, we find that the typical manager is spending three quarters of their time doing nothing but managing spread sheets and trying to figure out how to get people matched up with projects, and people playing phone tag between managers to do all that.
That, in and of itself, is a huge investment that’s already embedded in the organization. So, what we’re suggesting is taking that effort away from the managers, reinvesting that in an RMO, allowing the managers to spend more time on people management, more time with their clients, putting more focus on how do I do resource management better in an RMO?
Organizations that do this well generally have lower attrition of people, we find, and there’s a tremendous amount of savings to be mined in organizations that do this well.
Steve Brooks: You mentioned a couple already, are there any other common inhibitors to implementing resource management?
Randy Mysliviec: We actually just did a research study on inhibitors in resource management at the RMI, a simple recognition of the impact of resource management on project performance is really important. Organizations that tend to focus on only project management or quality management are really missing and important element of their project execution, so that’s an important one.
Building the right kind of process. One of the things we find organizations do is put too much faith in “I bought an automation tool and that’s going to solve all my problems.” And it rarely does. Automation tools and processes go together. One enables the other. And those things are really important.
One of the last things I’ll mention is the availability of resource managers. Different than project managers, where project management discipline’s been around for a long, long time. There’s a lot of good, experienced, trained project managers available in the marketplace. Resource management is much more nascent, relative to project management, and therefore the availability of skilled, trained resource managers is not the same. We published a research project not too long ago that spoke to inhibitors in the marketplace and the availability of skilled, experienced, trained resource managers is an issue in the industry.
The RMI is doing its part to try to remedy that, with the training we provide, our certification program and other things. But in general, is the need to both find better, experienced, trained RMs, as well as internally develop them, because they’re not always available externally is going to be important to organizations, in going forward.
Steve Brooks: Challenges and obstacles might be resistance to change, it might be the lack of technical tools, it might be the wrong places, or even a wrong culture. And they’re the kind of inhibitors I thought you would raise. Is there something you want to say about that?
Randy Mysliviec: Perhaps I didn’t expound enough on the cultural change aspect. That’s a really important one. It is common in most organizations that go through this transformation. This was me 40 years ago as a young manager in a big technology company. I had 15 employees that I was responsible for managing. At some level, I wanted to control where those people were applying their efforts and time, because I tied their success to my own.
You’re still responsible for managing the careers of those people, but you’re not necessarily responsible for what they’re going to be doing on a daily basis, is not to be underestimated. It’s a big cultural change for organizations and so my point earlier about getting tops down support, this is not easy. But if you can’t break that mold of managers thinking you can never get to the concept I talked about, which is how do I look at the use of people in the best interest of the corporation, not a particular manager, or even a particular project.
Steve Brooks: That’s where the RMO stands out, because it’s aside from the normal hierarchy and acts as an independent overview of the resource management practice.
Randy Mysliviec: That’s exactly right, Steve. When I said make it a neutral function, is that function should not have to worry about any influences from any particular manager. They ought to feel like they can look at the forecast and needs, the projects that have closed, the people that are available to do that work, and assign people to projects in a manner that’s in the best interest of the corporation and the corporation’s customers, by the way.
And it doesn’t mean that there can’t be interaction between the RMO and the managers that those people report to. There’s always going to be some need for that. You have some unique career need of a person, and you want to get a person on a particular project. That’s a normal dynamic that you certainly would want to have that kind of flexibility built into it.
Steve Brooks: We talked about what’s good, and how you can actually get to that end goal. Have companies got it wrong in the past?
Randy Mysliviec: Yeah, one of the ones I mentioned and talk to technology vendors all the time about is that companies that buy an automation tool thinking it’s going to solve their business process problem. It’s not that, again, an automation tool is not necessary. They’re really necessary. They’re really important. They’re an enabler of the process. But we see many, many organizations that bought a tool thinking it was going to solve their resource management issue. And the tool doesn’t do that. The tool is an enabler of a business process, but it isn’t the answer of itself.
Process is hard, you’ve really got to think hard about process. Because process is what drives continuous improvement in things to reduce errors and mistakes along the way.
I mentioned the issue of culture transformation again, it just is organizations almost entirely, everyone we work with, struggle with that, that. Because culture change is hard. Whether you’re trying to change resource management culture, or whether or not you’re trying to change some other culture aspect of a company. Culture change just takes time.
And the last I’ll mention is governance, expect what we expect from our organizations. You may have heard the expression used before is resource management has it’s own set of things that we should measure. It’s things like, not just utilization, which people tend to say, over-focus on, because it’s not the only thing that’s important. But there is a direct tie of resource management to project performance. If I’m not watching my project performance and expecting project performance to improve as a result of investments and research management, then I’m not doing it right.
Time to staff. Is when a project comes in, part of the being competitive in today’s professional services environment is how quickly, once we close a deal, can we actually ramp up and start that project to make the customer happy.
I can think of one organization that did a tremendous job building a highly efficient and effective resource management office. Dramatically improved their utilization, their project performance in the organization, and as we’ve experienced the technology companies, technology companies go through people change and management change.
And one day the organization has a turnover of the resource management office leader and the vice president that person reported to. And it’s replaced by an individual who doesn’t really understand resource management, doesn’t understand its importance, doesn’t understand its relationship to project management, and sees the RMO as a unnecessary expense. Dissolves the RMO. Within six months, utilization goes back to where it was, project performance declines quite dramatically, at that time, then that vice president is asked to leave the organization and a new one’s put back in place, and then on goes the process of trying to rebuild it.
Steve Brooks: That example shows the importance, really, of that CEO, very top level buying into it, doesn’t it?
Randy Mysliviec: That’s exactly right, Steve, is that because the point of continuity in that company is the senior leadership, and in my opinion, that senior leadership didn’t have that same perspective. They saw the improvement, they thought that improvement was continued, but didn’t really understand what was causing that good performance of the organization from a resource management standpoint, and its impact on projects.
It really brings back to that tops down appreciation and support for resource management is a discipline. Nascent as it is, it’s absolutely mission critical today, in any project-based business, to run the business efficiently and effectively and produce happy customers with each and every project.
Steve Brooks: What’s the first step a business leader should consider doing on that journey to better resource management?
Randy Mysliviec: I think the best thing an organization can do is to get educated on resource management as a whole. Before you make your first move of build a process or buying a tool, is really understand the dynamics of what does it really take to run a good, efficient resource management office. What are the cultural change needs I should anticipate? What are the technology needs I’m likely to have? What are the process changes I’m going to, likely to have? How much time, how much money does that take?
It’s really getting educated on what “good” looks like, so that before I start to build my plan, that I really understand the background of what it is that I’m going to go try and accomplish, because we see people realize one day, “I have a resource management problem,” and so they immediately dive in to building a process and buying a tool, without stepping back and saying, “What is it that I really want to do here, and what I really want to accomplish?” So, before I start making my choices on process and technology, people I’m going to hire, how I’m going to organize my RMO, that I understand, from an industry point of view, what you could do.
Steve Brooks: Thank you very much, Randy.
Randy Mysliviec: Well, Steve, I can’t thank you enough for being here, the RMI appreciates the opportunity to share our thoughts and experiences. We think the competitive, project-based organization of the future is going to have to be really good at this resource management thing. There are companies out there today that are doing it well. There are organizations that are a bit behind the curve and need to do it better. We believe resource management excellence will be pivotal for the professional services leaders of the future.
Steve Brooks: You’ve been listening to one of a of podcasts dedicated to sharing best practices for professional services organizations. These can be found on www.kimbleapps.com.