Can Better Resource Management Actually Save Costs?

One of the frequently mentioned truths of resource management is that, if done the right way, it saves costs. However, a more sceptical person might want to know how exactly this happens – can those cost-saving opportunities be identified? And, just as important, which criteria does resource management need to fulfil for it to happen? This article answers both questions by using basic logic.

How exactly does resource management save costs? 

There are multiple ways in which process management can lead to cost savings:

  • Resource management can reduce the time required to carry out a task
  • It reduces ongoing management needs
  • It reduces the amount of required resources (human and non-human)

Better resource management will lower the need for active management while a project is running, enabling the team to complete a task within a shorter period of time, hence saving costs.
Secondly, actively managing resources during a process is a cost itself – it requires additional management resources for monitoring and re-assigning resources. Resource management can help lowering these costs as detailed resource allocation plans are in place and re-adjustment processes are to a certain degree automated.
Finally, better planning and resource allocation prior to starting a project will usually enable a team to be more efficient in reaching their goals, lowering the amount of total resources needed for a given task – again another direct way to save costs.
These statements may sound a bit generic at first, but they sum up the main areas where resource management can make a crucial difference on the cost side. Having identified these areas, we can move on to the next question.

Which criteria does resource management need to fulfill to become a profit centre?

The answer is based on the points above:

  • The resource management tool needs to be easy to use
  • Operational costs must be lower than cost savings achieved
  • Resource management is most useful when adopted by the entire organisation

The resource management tool needs to be hands-on and easy to use so that training efforts do not consume much time – otherwise it would offset the efficiency gains mentioned previously.
The overall costs of acquiring and running the system should be lower than the cost savings achieved by it.
Usage of the system needs to become a standard procedure across an organisation to unleash its full potential, and hence it needs to offer collaboration across different departments to maximise planning effectiveness.

The conclusion is that it is relatively easy to identify how resource management can save costs – resources are used more efficiently while ongoing management efforts are minimised.

In order for this to return a profit, the costs for implementing and running the resource management system need to be lower than the cost savings generated. Therefore, the cost benefits of resource management primarily depend on the quality and user friendliness of the resource management tools as well as their effective usage within a company. The resource management tools of were built with these realisations in mind and offer a highly flexible, cost efficient of managing resources across the entire organisations.


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