On Optimizing the Allocation of Resources in Project-Based Organizations: A Public-Sector Case Study Open Access
Downloadable ContentDownload PDF
One of the key challenges encountered by program managers in managing multiple projects within project- and program-based organizations is resource allocation. Although project managers typically work diligently to optimize the allocation of resources within the individual projects, using what are considered to be the best practices in project management, and thus leading to adequate and even excellent utilization of resources at the project level, such an approach may result in poor resource optimization at the program level. The unfortunate result is good intra-project resource optimization and poor inter-project resource allocation. In the long term, this can be very costly to the organization. In this study, a mixed integer optimization model (MIOM) was developed for the allocation of resources in multiple-project programs. Managers in a Department of Defense organization were introduced to the MIOM as a decision support tool for inter-project resource allocation. The efficiency of the MIOM for resource allocation was measured by collecting and analyzing data on four key performance metrics for a multiple-project public-sector program: cost performance index (CPI), schedule performance index (SPI), and mean square error of cost (MSEC) and mean square error of schedule (MSES) performance indices. The MIOM was implemented in a multiple-project environment as a decision support tool for the allocation of resources. The data collected were used to answer the overarching research question: What, if any, difference exists between the efficiency of project resource allocation prior to implementation of the MIOM resource allocation model and said efficiency after its implementation? Four hypotheses were tested to address the measures of resource allocation efficiency. The results of the analysis showed statistically significant improvements in each of those four measures after the implementation of the MIOM. Thus, the study provided strong evidence to support the conclusion that, on average, implementation of the MIOM resulted in improved project cost and schedule performance.