How to optimise resources in matrix organizations?
Matrix organizations have prevailed for decades, predominantly in multi-project environments.
Gallup states that 84% of organizations are matrixed to some extent. A resource pool allocated to cross-departmental projects is typical in a matrixed organization, which means employees have dual or multiple reporting managers.
Matrix organizations have proven beneficial in terms of breaking traditional silos within the organization, enhancing collaboration, and helping in better decision making.
However, critics have adjudged that managerial conflicts and challenges in monitoring and controlling resources limit such organizations’ effectiveness. Moreover, in matrix organizations, several projects across departments and locations are on the boil. So, shifting priorities that skew resource utilization is quite common.
Optimizing resources against their availability and competencies is easier said than done.
To meet dynamic resource demands, resource managers end up over or under allocating resources, unintentionally.
So the question is: How can matrix organizations optimize their resources amid the changing demands of multiple projects?
Many project-intensive businesses are still relying on clunky spreadsheets and homegrown solutions to manage their resources. These legacy systems are cumbersome and fail to mitigate the resource optimization challenges within the modern business ecosystem. To optimally tap your resource pool, you need enterprise-level resource planning and scheduling software.
The following tips will ensure effective resource optimization in a matrix organization:
1) Enterprise-wide visibility: Matrix organizations have multiple dimensions, so enterprise visibility is a prerequisite for effective resource optimization. Matrix organizations can benefit from resource management software that provides 360-degree visibility of all your resources and work demands.
Also, complete visibility helps keep track of tasks, resource availability changes, and impact on project health and workforce capacity. Hence, appropriate resourcing treatments are applied to optimize resources in a multi-project environment.
2) Set clear expectations: According to Gallup, matrixed employees are more engaged than their non-matrixed counterparts. But they lack clarity on expectations at work. Therefore, maintaining open communication, including actionable performance feedback, is necessary for role clarity. It helps keep employees and managers on the same page, but it also drives outcome-driven alliances and informed decision-making.
Mc Kinsey’s research on Organizational Health Index (OHI) reveals that role clarity improves accountability, a critical component of OHI. Role ambiguity is highly pervasive for matrix organizations. So, leaders must ensure setting clear expectations aligned with business objectives is a continuous process. So, instead of annual performance reviews, regular feedback on employee progress can improve overall engagement.
3) Prioritize projects before allocating resources: In a matrix organization, it is common to have multiple active projects demanding a common skilled worker. Ideally, the allocation of highly skilled members should be prioritized for high priority projects. However, the distribution of skilled workers across all the projects is essential, otherwise, one project will get all the focus.
The organization should also have an out rotation strategy to kick start new projects by pulling out the niche resource from ongoing projects. Accordingly, backfills can be trained and allocated to fill in the vacancies. This way, the current projects can continue their course, while new projects get off the ground on time.
4) Identify and allocate competencies: One of the crucial steps for resource optimization is competent resource allocation. Most resource planning and scheduling tools help identify and assign the right resource to the right job. Based on criteria like skills, experience, qualification, location, and cost rate, resource managers can make optimal use of the resource pool.
Besides, these tools’ self-serving model enables users to update their skill and training information, which undergoes verification before approval. So, the resource competencies are up to date in real-time. Subsequently, seamless resource requesting in matrix organizations takes place.
5) Measure capacity vs. demand: Matrix organizations can vastly benefit from a resource capacity planning tool. It can forecast capacity vs. demand from multiple perspectives like role, department, skills, location, team, etc. The scientific forecasting model helps in identifying excesses or shortages ahead of time.
Accordingly, resources can be hired, reskilled or upskilled, or juggled around project timelines to attain resource optimization. Besides, predicting resource demand for future or pipeline projects buys you time to have an optimally balanced and skilled resource pool. Having a judicious blend of full-time, part-time, casual, and contractual staff prevents last-minute hiring and firing costs.
6) Minimize bench time: In large organizations, especially in IT firms, unplanned ramp down on current projects are common. Additionally, if pipeline projects are absent, the bench strength increases. This adversely affects the bottom line and narrows project margins. Foresight into future project vacancies helps identify resources on the bench due to under allocation of work.
Proper capacity planning will minimize bench time by mobilizing resources from non-billable to billable work. In case benched resources lack the skills needed for a task, upskilling and reskilling them eliminates the hasty hiring process.
Efficient and effective resource optimization within matrix organizations is achievable using modern resource management software. This tool breaks traditional silos within multi-project intensive organizations and facilitates quick reshuffling of resources across departments and locations. As mentioned above, these tips will resolve utilization issues and optimize your resource pool for enhanced profitability.