If you’re running a small- or medium- sized business, effective resource management is critically important. In order to ensure short- and long-term viability and success, a business must utilize its resources efficiently.
What is resource management?
Resource management is the process of efficiently allocating a business’ assets, such as buildings, equipment, stock, intellectual property, finances, and labour. Whilst it is important to ensure that a business has sufficient resources, it is equally important to prevent an excess, which can cause severe inefficiencies. For example, if a business carries too much stock that is spoilable, unused stock will need to be thrown away at the end of its usable life. Similarly, having more employees than is required can lead to excessive downtime, which represents an expense without any tangible benefit. It is important, therefore, to continually check that resources are managed at optimal levels.
How does effective resource management help your business?
The benefit of effective resource management to a business is twofold. Firstly, it helps to ensure that there is always sufficient resource available to operate. This involves all resources being managed at optimal levels. For example, having sufficient stock is ineffective if there are not enough employees to manage transactions with clients. Similarly, having the correct number of employees and a healthy level of stock is no good unless you have the premises and logistics to interact with clients. It’s a delicate balance, but one that pays dividends.
Resource management also prevents inefficiencies. As noted above, having too much stock, particularly if it has an expiration date, is a waste of resource. Accurate projections, adjusted in relation to up-to-date information, will help to avoid this. Similarly, hiring too many employees does not represent efficiency, as an excess of FTE is likely to result in a fall in productivity. If your premises are too large for their intended purpose, you will be spending more than you need to on rent, utilities, and other overheads. Whilst it is advisable to have enough space, an excess is inefficient.
Taking in combination, finding an equilibrium helps to ensure that your resources are allocated efficiently; you will not be losing out on business due to a lack of resource, and you will not be spending too much on resource that is not required.
How can I best manage the resource within my business?
Many small- and medium-sized enterprises (SMEs) use specialist software to manage their enterprise resource planning (ERP). There are many providers of ERP software, and you have plenty of options in terms of scope and pricing. The objective of ERP software is to collate information about your current resource level, take into account demand and projected business growth, and provide accurate estimates of the resources you will need moving forward. Regular updates within ERP software will allow you to make adjustments contemporaneously, which prevents inefficiency at any time. If you run a small- or medium-sized business, it is certainly worth exploring ERP solutions to help you take advantage of this powerful software.