Effort Management is a new paradigm that combines processes of workforce capability planning and resource allocation.
In so doing, it provides powerful insights into an enterprise's future, and enables earlier intervention to ensure successful outcomes.
Effort Management is highly applicable to Project Based Enterprises (PBE’s) such as consultancies, PMO’s, contractors and software developers, <see more>, due to the complexities of the project environment. For many enterprises, this multi-dimensional challenge has proven too daunting. That’s understandable. One could liken it to juggling a varying number of balls while bouncing on a trampoline!
But that is about to change.
For projects to be successful, Project Outcomes of time, cost and quality will only be achieved with the sufficient provision of people. For a PBE to be successful, Enterprise Outcomes of people, project delivery and financial performance must be balanced and optimised.
And this is where Effort Management is key.
The management of people and project work in a PBE is a whole of enterprise mission, as it involves the workstreams of HR, project operations and management accounting <see more>. That is to say, its purpose is to ensure the effective use of people across the entire enterprise, on all of its projects, while achieving whole of enterprise performance.
How is this achievable?
RESRODEL. This 'Resource Role Model' software is the first application of Effort Management principles to predict and resolve the complex challenges of enterprise project management.
To maximise performance, Project Based Enterprises (PBE’s) must balance outcomes regarding people, project delivery and financial performance.
The Effort Management theorem quantifies the relationship between Roles, Work and Resources into 3 forms of Effort called Demand, Capacity, Allocation. And it does this for each role.
Effort is spread over time into Demand, Capacity and Allocation profiles.
Profiles are compared against one another, providing Enterprise Drivers called Capability, Utilisation and Assignment - period by period.
The theorem of Effort Management elegantly engages the complete and continuous relationship between inputs of Demand, Capacity and Allocation with outputs of Capacity, Utilisation and Assignment.
Workforce planning and resource allocation are no longer separate processes having been merged into this new paradigm of Effort Management.
Armed with such insights, managers are now able to act earlier and better optimise PBE outcomes for People, Project Delivery and Financial Performance.
PBE Outcomes and Drivers
The mission of all Project Based Enterprise’s (PBE) is to apply resources to work to produce outcomes.
Enterprise Outcomes are based on People, Project Delivery and Financial Performance.
Enterprise Outcomes are successful when:
- Projects are delivered on time with quality product (maintaining reputation)
- Efficiency is achieved (leading to utilisation, value and profit)
- People are not overworked (keeping work satisfying and sustainable)
- Ability to deliver
- People’s workload
This enables managers to better understand Enterprise Drivers called:
- Capability – the ability to deliver on obligations, or opportunities
- Utilisation – the efficient deployment of people
- Assignment – the sufficient provision of people to work
Enterprise Drivers are interconnected. Maximise one, and two others will be compromised. For example, a PBE that absolutely minimises its people numbers will reduce cost and increase efficiency. (It will also increase profit). However, its ability to complete all of its project deliverables on time is compromised, even when its people work excessively hard.
To balance Enterprise Outcomes and optimise enterprise future, managers need the ability to forecast Enterprise Drivers.
Balancing Enterprise Outcomes
- Increase or reduce:
- People (numbers or availability)
- Split alloaction among various people
- Share People and/or work between sub-enterprises
Most enterprise resources can be categorised as either physical, financial or human. So, if ‘money’ quantifies financial resources in dollars and ‘weight’ quantifies physical resources in tonnes, how are 'human resources' quantified?
Furthermore, of Time, Cost and Quality Project Outcomes, there’s a fundamental factor that’s rarely quantified, let alone acknowledged, yet is a primary enabler of all project outcomes.
Humans contribute time to an enterprise’s productivity – time spent exerting themselves in an activity, applying effort, to enable an outcome.
‘Effort’ quantifies human resources (in units of time).
Human effort is at the heart of all productivity.
To optimise Enterprise Outcomes, effort must be managed.
Effort is more than an ‘enabler’, it also represents ‘burden’ and ‘transaction’. It occurs in the past and in the future. It can be ‘planned’ or can be ‘potential’.
Effort is also timeless. To say a task will take 100 hours does not imply ‘when’ or how long it will take. That depends on the Attendance i.e. number of people available for the task. Refer to Figure 5. Furthermore, people might work 1840 hours in a year, or 40 hours a week for an average 46 weeks, but again, ‘when’ cannot be inferred.
Effort exists in three forms called Demand, Capacity and Allocation, (Table 2) each quantifying the relation between Fundamental Entities (Table 1) called Roles, Work and Resources, as described below. Effort is collated Role by Role.
Definition of Effort:
The amount of hman exertion in the past, present or future. Future effort can be either available, required or planned.
When time cost quality outcomes are threatened
- Typically caused by:
- pride or acceptance of delivery responsibility
- support of their team
- perceived career preservation
- expectations or management’s
- Commonly occurring in:
- professional consultancies
- advertising agencies
- junior medical practitioners
- management positions
- time and/or
- quality and/or
|Roles||a generic group of people with common skills and abilities, capability of undertaking a specific function||Construction Supervisor, Editors, Database Architect, Junior Bridge Designer|
|Resources||Individual people, each being capable one or more Roles||Bill Bent, Simone Cider, Peter Pink|
|Work||an activity with a tangible deliverable or outcome, often to be completed within a specific timeframe||supervising the construction of a bridge, editing a book, developing a database schema, designing a bridge|
|Demand||estimated effort expected of a Role to undertake Work|
|Capacity||tally of Resource availability into Role Capacity|
|Allocation||effort assigned to a Resource to undertake Work tallied for each Role|
Effort can be expressed in Hours, Days, Weeks, Months, or in an equivalent Attendance per period expressed as Full Time Equivalents (FTEs) or %.
Effort does not occur in a single moment and must be spread over time, into Demand, Capacity and Allocation Profiles.
Demand and Allocation Profiles, for each enterprise Role, are derived from the tallies of Demand and Allocation profiles, for each Role, from each Activity. Demand and Allocation Profiles for each Activity are created by spreading their total quantum throughout an activity’s duration. Demand and Allocation Profile quantum for each period represents Attendance (i.e. number of people for the activity) and is inversely proportional to Duration.
Capacity Profiles are derived from the availability of people acting in a specific Role, which is continuous, unless there are Exceptions when people are temporarily absent or part time.
Comparing Effort Profiles against one another provides powerful insights into the Enterprise’s future with Enterprise Drivers called Capability, Assignment and Utilisation. Refer to Table 3 for specific details
Enterprise Drivers are also expressed numerically, for each period, as either Gap, Gap % or Ratio (e.g. 16 hours, 10% or 0.9 respectively.) Refer to ‘Quick Scenario’ below.
|Enterprise Drivers||Forecast Metric||Effort Profile Comparison|
|Capability||Ability||Ability to deliver obligations, or opportunities||Capacity||Demand|
|Utilisation||Efficiency||Efficient deployment of people||Allocation||Capacity|
|Assignment||Workload||Sufficient provision of people to work||Demand||Allocation|
Continuous and Complete
The process and theorem for Effort Management elegantly engage the complete and continuous relationship between inputs of Demand, Capacity and Allocation with output of Capacity, Utilisation and Assignment.
Workforce planning and resource allocation are no longer separate processes, as the relationship between Role and Resource have been permanently merged to into this new paradigm.
With this information, Enterprise managers can now predict, Role by Role, their enterprise's ability to deliver, their efficiency and people’s workload. Armed with such insights, managers are now able to act earlier and better optimise Enterprise outcomes for People, Project Delivery and Financial Performance.
An enterprise employs many people in several Roles, to work on multiple projects. Role X’s future Demand, Capacity and Allocation is forecast and aggregated for the whole enterprise, month by month. Enterprise Drivers are calculated and their implications assessed for further action, as per Table 4. Figure 6, represents period effort and drivers for the enterprise graphically, in slices of time, month by month (we like to call the ‘ toblerone of time’). Where:
- Month 31 presents an ideal scenario where there’s and equal balance between Demand and Capacity, and the allocation of people to work has been completely efficient. This implies the enterprise will be in complete balance and all Enterprise Outcomes have been optimized.
- Month 30 however, represents the common scenario where there is more people than work where the ability to deliver is high, and there will be low utilization.
- Month 32 is the opposite to Month 30, where there are too few people for the work, and despite a major over allocation and stretching of people it appears inadequate for the excessive amount of work to be that demanded in the period.
|Month 30||Month 31||Month 32|
|Enterprice Driver||Capability||2.0 - Over Capable||1.0 - Balance||0.4 - Under Capable|
|Utilisation||0.75 - Under Utilised||1.0 - Balance||0.75 - IOver Utilised|
|Assignment||1.5 - Over Assigned||1.0 - Balance||0.6 - Under Assigned|
|Implication||People||Light Workload||Optimum||Excessive Workload|
|Delivery||Strong Ability||Optimum||Por Ability|
|Business||Poor Utilisation||Optimum||Strong Utilisation|
|Actions||Find Work, or reduce people||Maintain||Find Work|
This new paradigm of Effort Management described above is embodied in the ‘resource role model’ we called RESRODEL. Created specifically for Project Based Enterprises (PBE’s), RESRODEL empowers Project Based Enterprises of all kinds to efficiently plan people numbers and project work, to deliver your potential.