Five Reasons You Need Resource Management Right Now

Are you a functional manager or department head who is struggling to keep straight what your people are doing, who has free time, and who’s overworked?  Or are you trying to make sure that all of your projects have the proper coverage necessary to get everything done on time, so you don’t get an unpleasant visit from someone sitting “upstairs”?  If so, chances are you are in favor of having a resource management capability instilled within your organization.

Resource management is necessary for anyone looking to optimize the use of their resources, ensure projects don’t get delayed, and keep their sanity (and rage) in check when asking for additional resource from the powers-that-be.  It’s amazing the difference when resource management is done systematically (versus being done haphazardly, or not at all), enabling people to come up with sensible, data-driven resourcing plans that lead to everyone knowing what everyone else is working on, and which projects might be in trouble.  Resource management does not necessarily have to be complicated; it just needs to be done in a consistent fashion. That means that even smaller companies can benefit from implementing a resource management capability.

Unfortunately, it is just about inevitable that someone (or many someones) will be against doing any kind of resource management. It’s too complicated, it’s too much work, it’s overkill for how big the company is, no one has time, no one knows who will be in charge – the list of reasons why it shouldn’t be done is endless.  It’s not that these points aren’t valid to some degree; in fact, these are some fairly realistic assessments. But resource management is an investment, and like any investment there are costs. They may be tough to swallow, but the benefits to be reaped are more than worth it.

So how do you convince these folks that resource management is the way to go? Start with the points below, and you’re sure to get them to see the light!

1. Resource Management Allows You to Maximize Utilization of Staff

Having visibility of future resource demands leads to more time to get the right resources so studies are not delayed, and people do not have idle capacity (which leads to needless hires/wasted money). Doing proper resource management also allows you to earmark resources to build a team that works together to deliver outcomes as per plan. Ultimately, this leads to having the right resources ready at the right time – something we can all agree is a very good thing.

2. Scenario Planning Helps You See the Future

There are always lots of variables in play when managing a project, whether a clinical trial or a process improvement initiative. Scenario planning, or running “what if” scenarios, allow you to see what might happen when one or more of those variables heads off in a direction you might not expect.  Being able to “see into the future” for each of these possible scenarios allows you to tweak (or overhaul) resource needs for, say, determining optimal trial design and clinical program options.  This will help ensure there will be enough resources available for projects starting up later in the year, or give you guidance in terms of when you should schedule future projects.  This will also help you estimate costs when assessing clinical programs (insource vs. outsource, shifting resources/timing, etc.).

3. Get Better Governance

When resource management is done in a consistent way throughout the organization, it leads to better visibility of supply & demand, which leads to you making smarter and earlier decisions.  You can determine the best use of staff time in a structured, data-driven approach that leads to a portfolio which is properly prioritized and optimized.  Having a consistent resource management decision-making process throughout the organization will ensure that everyone is talking “apples to apples” when having resourcing conversations.  As an added bonus, this structured approach will later on help people understand resource management decisions that were made in the past, which translates to valuable lessons learned for future decisions.

4. Drive Accountability and Increase Credibility

It is said that idle hands make the devil’s work, but upper management surely would add that they are also costing the company money by not adding value. They bring on functional managers in part to ensure this doesn’t happen.  Resource management quickly identifies excess/idle capacity, which is something that functional managers should be actively trying to avoid.  Finding and eliminating this unused capacity can be used to accelerate project delivery times or take on additional projects that were thought to be out of reach due to a lack of resources.  And by collecting data on actual hours spent on projects, not only can resource demand algorithms be improved, but this allows the organization to identify problem areas for possible improvement project.  Good resource management also enables just-in-time hiring and effective balancing of workloads – the like of which certainly will give upper management the confidence that you have a good handle on your portfolio.  Last but not least, resource management enhances cross-function coordination so functional resources are ready for handoffs, reducing errors and delays that often occur as such touchpoints.

5. Reduce Costs

It is no secret that one of the key cost drivers in clinical trials is staff costs, making up anywhere from 11% to 29% of the total.  For example:

  • Average Phase 2 Trial = $7-19.6M; Average Phase 3 Trial = $11.5-52.9M
    • Midpoint cost of a trial @11% staff costs (the low end of the range) = $1.463M for Phase 2 and $3.542M for Phase 3
    • Average company conducts 50 trials per year @ even only a 1% resourcing efficiency improvement = $731.5K savings in Phase 2 and $1.7M in Phase 3 per year
    • Even for a smaller company with just 200 employees, which would represent roughly a $30M annual resource expense, so a 1% efficiency gain = $300K/year savings in headcount alone before considering other impacts from lack of proper resource management (e.g. study delays)

Again, it should be noted that these numbers represent the low end of the staffing costs percentage range (11%), instead of the midpoint (20%) or the high end of the range (29%). Furthermore, these numbers represent only staffing costs and do not even speak to the longer-term impact of improperly resourcing your studies or programs.  Accurate resource management ensures studies are sufficiently resourced and avoids delays.  The delay of market introduction for drug with even modest appeal is estimated at around $500K lost revenue per day

If, after all this, the powers-that-be in your organization still don’t think they need resource management?  You may want to go over all these points with them again, because chances are, they have some idle capacity that needs filling.

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