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What is resource management? Definition and guide
Starting a business

What Is Resource Management? Definition and Guide

As a business owner, there’s a lot for you to juggle and manage as you navigate your business journey.


To achieve business success, you need to get the most out of your software, people, tools, stock, and all the other elements at your disposal.


This rather complex juggling is called resource management.

What Is Resource Management?

The process by which firms plan, arrange, and distribute resources in order to maximise organisational value is known as resource management or resource planning. These resources can be real, like tools, materials, and money, or intangible, like time and expertise.


Resource management is essentially the process of allocating the appropriate resources to the appropriate activities at the appropriate times. Setting timetables and budgets for people, projects, equipment, and supplies are also important aspects of managing resources.

Why Is Resource Management Important?

Because it lowers costs and wasteful effort, the resource management process is essential to the success of every firm. By using resource management approaches, you can develop the knowledge and abilities necessary to build goods and deliver projects, regardless of outside influences.


Effective resource management:


  • Eliminates waste: You can maximise resource efficiency across a number of areas with effective resource management, ensuring that none of the equipment, space, or material you've invested in is wasted.


  • Optimises time: Resource planning ensures little time is wasted. Team members understand how to prioritise tasks in an efficient manner and apply their skills so that tasks are promptly completed.


  • Minimises risk: With poor resource management, there is a chance that you miss objectives or don’t fulfil orders, leading to a damaged reputation. Successful planning lets you allocate resources in a way that ensures targets are met.


  • Maximises profit: Efficiency is the friend of profit. Allocating your resources in the most efficient manner will allow you to make the most of your investments and squeeze out as much profit as possible. 
  • Allows you to prepare for issues: You can address gaps or issues before they arise by being aware of your resources up front and preparing how to use them.


  • Prevents burnout: By gaining knowledge of your team's workload, effective resource management enables you to prevent overallocation or dependence of resources in one area.


  • Builds transparency: If your team is at capacity or available to take on new tasks, other teams can see what resources are available to you and make plans appropriately. This cross-company transparency allows for greater alignment.

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What Are Some Resource Management Techniques?

Resource managers take different approaches to the task of resource management. Let’s examine three different resource management techniques.


1. Resource Smoothing

A resource management technique called resource smoothing uses scheduling to meet agreed-upon targets. Resources are smoothed out in an effort to fulfil a deadline while preventing resource peaks and valleys. Resource smoothing aims to maintain a steady rate of resource demand and/or resource use over time.


2. Resource Levelling

Resource levelling is a resource management approach used to keep the stock of project resources at a level that prevents both shortages and surplus inventory. With tools that provide resource forecasting and risk management using real-time data, specialised resource management software can assist in determining that level.


Resource levelling is also discussed in terms of how long it takes to finish a job. The start and end dates are modified during levelling so that they coincide with the availability of resources. Levelling may result in a longer project timetable, but with the goal of cutting out extra expenditures along the way.


3. Resource Forecasting


Resource forecasting anticipates the resources required in the future and develops a resource management plan to account for them. This differentiates resource forecasting from other resource management strategies that are concerned with distributing resources in the present. 


Accurate forecasting solutions assist project managers in identifying future conflicts and opportunities to make sure that resource allocation and utilisation are in line with their long-term goals using their present capacity, upcoming projects, and external trends.


Resource management, at its most basic level for small businesses, is about ensuring that a company is making intelligent and efficient use of its people and resources.

Resource Management Skills That You Should Have

As a business owner, you should have the skills to be an effective resource manager since this is all about protecting your investment. There’s a lot on a resource manager’s to-do list so you must have the skills to negotiate the various tasks.


An effective resource manager will have:


  • Excellent communication skills: You must be able to mediate between various teams skillfully and ensure everybody is on the same page.


  • Conflict resolution skills: Sometimes, there can be competition between different teams for the resources available. At times, you will need to handle these delicate situations. 


  • Expert knowledge: Whatever your industry, you need expert knowledge in your area so that you know the best course of action to allocate the resources at hand.


  • Planning skills: Of course, the ability to take a bird’s eye view and look into the future is key to resource planning as you anticipate future circumstances.


  • Risk management skills: There are inevitable risks involved with business processes, whatever your industry. Understanding these risks and accounting for them is a key part of your role. 

Final Thoughts


What resource management looks like will vary depending on your industry and the resources you have available.


However, it’s clearly vital that you exercise intelligent resource planning so that you give yourself the best chance of running a profitable business.


In an increasingly competitive business marketplace, it's imperative you make the most of what you have available and push your profit margins with effective resource management.

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