5-Step Plan to Optimize Resource Utilization in SMBs

According to a 2017 Capterra survey, 40% of small and medium-sized businesses (SMBs), are focused on “increasing worker productivity” as their top business goal for 2020.
There are many ways to improve employee effectiveness. These include investing in the right tools, increasing training, and skill development.
Business leaders sometimes struggle to grasp the most cost-effective and immediate way to increase productivity. Give employees less work. Don’t leave “slack” behind in the system.
This is contrary to the way most SMBs see resource utilization. To break even on employee benefits versus costs, employees must be 100% utilized.

There is a sweet spot between over-utilized workers and under-utilized workers, which is the tipping point for productivity.
Robert Handler, Gartner analyst, says that between 70% and 80% utilization is the sweet spot. Employees who are under 80% are less productive and can actually be a cost to your company in terms of time and money.
This article will review Handler’s research that he presented at Gartner’s 2018 Project and Portfolio Management summit (PPM). It will also discuss how it applies to SMBs.
We will also provide a five-step plan that will help you set up effective practices to maximize your resources and maximize productivity in your small business.
Jump to:
1. Start to track time and estimate the effort required. Identify bottlenecks Calculate the availability of project work4. Set up thresholds for project teams and resources that are at risk. To get 100% of the work done (planned), plan at 80% and manage at 80%Gartner tutorial: “PPM on a budget–Doing more with less”
The session by Handler at the Gartner PPM Conference covered three main topics: Queuing theory, optimal resource usage, and how project management offices can apply this information to the portfolio level to maximize value delivery.
Many small businesses don’t have a portfolio management level or a PMO. The basic principles of queuing theory are still applicable and can be used to help SMBs evaluate and staff projects to maximize quality and throughput.
QUEUEING THEORY: A line of people or objects waiting for service. For example, the line to pass security at the airport.
The queue size determines how long it takes to wait. You’ll wait longer if there are 50 people in front of you at security than if there were 3.
Variability in the number of people or items awaiting service can also increase wait times. If there are only two people dining out, you will be seated quickly and served immediately. However, if there is a group of 10, it will take longer.
Finally, high utilization can lead to increased wait times, especially when it is combined with change.
This is what we see every day on our commute to work. Traffic density, also known as road utilization, is high. A change in the normal traffic pattern due to a fender bender can have an immediate and devastating effect on traffic, slowing down or stopping it completely. Traffic density that is low allows vehicles to maneuver around the accident, which means traffic flow is less affected.

Traffic congestion is caused by an accident on high-traffic density roads vs. low-traffic density roads (Source–full Report available to Gartner clients).

QUEUEING THEORY IN PM – Now apply this theory in project management (PM). A queue is a collection of tasks that are waiting to be started and projects that are awaiting completion.
This means:
Below is a chart that shows the average effort required to complete user stories in a development project. Variability in work items and the type of queue (first in, last out) is assumed.
Column headers (0.25, 0.50, 1, 2, and 3) represent the

Author: Kody