What Is Resource Utilization?

3 min read

Resource utilization is a vital area of project management and portfolio management that can sustain growth, increase profits, improve productivity and enhance an enterprise’s bottom line.

Resource utilization is a KPI that measures performance and effort over an amount of available time (or capacity). Optimal resource utilization allows project managers to foresee resource availability across multiple categories. This insight allows teams to strategically plan their workforce schedules and make real-time remedial efforts to ensure the optimal health of new projects.

Resource utilization formula and rate calculation

Monitoring a team’s utilization and tracking individual performance productivity gives project managers one of the key KPIs for effective resource planning. These calculations help determine whether a full-time or part-time resource is overutilized or underutilized.

Overutilization (e.g., working more than the available hours) can lead to employee burnout. Underutilization (e.g., working less than the available hours) can lead to unplanned delays.

A typical resource utilization formula is calculated by dividing actual or allocated time by resource capacity. Project managers can adjust this formula to obtain a utilization rate that measures in hours, days or percentage. A utilization rate allows project managers to track resource performance and create a resource utilization project plan. Resource managers can then calculate billable tasks across new projects and engage in strategic capacity planning.

The benefits of resource planning

The benefits of measuring resource performance and gaining real-time visibility of utilization can be reaped across an enterprise to gain a competitive advantage. A successful resource utilization plan can do the following:

  • Reduce employee burnout by foreseeing overload and improve project management with access to productivity data.
  • Increase profitability by time-tracking billable utilization and knowing when and what resources to mobilize to billable tasks and projects.
  • Support employee training and growth by transforming underutilized benched available time to time that increases total billable hours.
  • Enhance productivity by scheduling with more agility and assigning tasks that best align to a specific skillset.
  • Prevent scope creep and increase ROI with resource management tools that can define, document and foresee unexpected new project requirements.

The future of resource utilization

Monitoring resource scheduling and calculating utilization rates without the right resource management tool can eat up valuable time. This is especially true when attempting to optimize environments and obtain metrics for multiple resources manually.

Traditional resource utilization has evolved as the complexity of IT infrastructure environments has increased. The acceleration toward artificial intelligence-driven automation across industries like financial services, insurance and healthcare, coupled with the rising complexity of hybrid cloud environments, creates complex and distributed applications that are now beyond human scale to manage traditionally.

IT Operations teams cannot afford to spend their valuable time chasing problems due to siloed decision-making and over-allocating application resources. IT organizations, among others that are undergoing digital transformations, can benefit from an intelligent application resource management software tool that provides real-time utilization reports and project management metrics at a scale beyond what humans alone can achieve.

The importance of application resource management (ARM)

Turbonomic Application Resource Management provides an AI-powered software solution that saves time and increases productivity by allowing teams to leverage their application data and generate intelligent automated resource action across a full-stack hybrid cloud environment.

A key benefit in the transformation of ITOps into AIOps, application resource management improves application performance and monitors, manages and determines successful application resource utilization.

CIOs and DevOps teams can achieve the successful utilization of resources through an application resource management solution that monitors and optimizes applications, manages complex infrastructure, generates real-time analytics and delivers the trusted application insight needed to take intelligent automated action.

Start your journey to assuring app performance at the lowest possible cost. Request your IBM Turbonomic demo today.

Resource utilization and IBM

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