A New Approach to Resource Management

A more disciplined strategic road map will help insurers avoid spending time and resources on projects that are lower-priority.

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--An organization’s goal should be to put in place a common resource allocation tool and real-time reporting mechanism while standardizing activities and roles aligned to individuals.


As the possibility of a global recession continues to be raised by economic prognosticators, insurers are looking for innovative ways to tighten their belts. One option is slashing labor costs. However, the talent crisis plaguing the insurance industry means mass layoffs are ill-advised—400,000 insurance employees are predicted to retire within the next few years. Adding to this challenge, the generation that would theoretically be replacing the retiring generation has little interest in doing so—eight out of 10 millennials surveyed had a limited understanding of the wide-ranging employment opportunities the insurance industry can offer. 

Savvy companies recognize layoffs can stymie an organization's future growth once the macroeconomic outlook flips bullish; instead, they’re figuring out how to prioritize, measure and manage capacity—to put the right people on the right projects and ensure effective and efficient execution.

One underused method is developing structured approaches to resource allocation. Approached in a traditional, system deployment-led way, this process can often take more than a year to implement. However, it’s now possible to realize gains in resource management and efficiency much more quickly. And there’s never been a more critical time.

Better resource management boils down to prioritizing and sequencing how to allocate talent to new or existing projects. In a recent survey of 39 companies, Resource Management Institute (RMI) concluded there are many areas that are ripe for big gains in efficiency. They learned that forecasting and capacity planning, along with developing a skills inventory, continue to require improvement. Governance was another area where vast improvements could be made. Without introducing good forecasting, supported by a more exacting skills database, the resource management process remains largely ineffective, and failures are inevitable.   

A more disciplined strategic road map will help insurers avoid spending time and resources on projects that are lower-priority. Some of this process involves figuring out which projects are either strategically important to the firm’s long-term vision or produce the most short-term profit—but prioritization is only part of the needed input. The success of the approach hinges on understanding what projects people are currently working on and what they’ll be tackling in the next three to six months, then identifying priorities from the top down, ensuring that sufficient resources are allocated to prioritized matters and getting a real-time picture of how people have been allocated and how projects are staffed.

Briefly put, our recommended approach to redesigning the process distills down to having a formalized, centralized, standardized demand management/intake process, cross-organization capacity planning and the right tracking and reporting tools.

Done manually, getting just a snapshot of current project staffing can take a month or more, but with a little help from data science it’s possible to get this down to near real time. With an accurate view of where gaps exist, more advanced questions can be asked, such as, “If key projects are not properly resourced, is it possible to pull people from other, less important internal activities to deliver the projects on time without having to hire new hands?”

An organization’s goal should be to put in place a common resource allocation tool and reporting mechanism while standardizing activities and roles aligned to individuals. While it’s possible to start with Excel spreadsheets, ideally companies will want to move on to a more specific resource management software tool. Data that previously took weeks to collect becomes immediately visible.

Traditionally, insurers use internal systems to track their own resources’ time on projects, but often these tools don’t provide a broader view of what is happening now or what should be happening going forward. Additionally, in our experience, time tracking is often a neglected area of resource management.

Establishing a feedback loop between historical time tracking and forward-looking resource planning is critical. By analyzing historical data, a firm can have more reliable estimates of any new project’s resource demands and completion timeline, which can then be used for more accurate projections. In addition, in this tight labor market, you certainly don’t want to lose good people because you are burning them out—it’s important to have reliable data to identify people who are overworked and enable discussions about how to remedy this situation.

A handful of insurers are catching on to this need, and in an economic environment where revenues are not necessarily growing—indeed, when fast-growing revenues are no longer present to disguise inefficient processes—there’s a strong motive for taking a strategic approach to solving the resource gap. It’s not going to be solved simply by recruiting, hiring more contractors or going to the market and paying bonuses to hire people away from competitors—warehouses and logistics are currently the only industries with a positive correlation between signing bonuses and application rates. In this tight market, increased use of an insurer's existing workforce becomes the more attractive option. 

However, modernizing an insurance company’s resource management practices doesn’t just mean implementing a data-collecting tool. There’s a cycle, with a process for getting the right data and then using it correctly. The dashboards and the management process must work in concert with each other.

For example, one insurance organization we’ve worked with believed at the outset that they had a large gap of resources in project delivery, even though they did not have any evidence other than anecdotal feedback from managers. A high-level initial analysis seemed to indicate that the gap in resources was greater than 60 total people, representing more than 20% of their workforce. Data was fed in and a rigorous process established, role data was set accurately (e.g., “Is a data manager also a developer?”) and analysis took place of people, projects and time horizons. The gap reduced to a much more manageable 20 resources. 

With the right details, the gaps for specific roles on specific projects became clearly visible and an action plan was detailed on how to address each gap. It became possible to trust a “single source of truth” for resource allocation, no longer relying on multiple ad hoc spreadsheets of questionable accuracy. It now became possible to answer resource allocation questions in a few minutes, when in the past this would have taken a week.

See also: Value of Optimized Resource Planning

Spread that approach across an entire portfolio of projects and you can have a large overall impact in time savings and efficiency of staff use. Part of the problem, particularly during COVID, had been the lack of physical cross-team communication. But by doing a better job of using digital resource management tools, insurers can bridge this gap. Though some organizations have invested significantly in incorporating cutting-edge software to do this, the investment is frequently lopsided—optimizing individual silos as opposed to taking a broader view across the entire value chain or across different organizational teams.

While it might be tempting to make sweeping overhauls of the resource management function, insurers must remember that the most effective changes are gradual. There are several intermediate stages between an organization’s current reality and its goal. The first step toward using resources effectively is to implement monthly resource management reviews focused on identifying resource gaps, their impact and how to address them. If an organization has no resource management to speak of, a simple manual Excel process can be the steppingstone needed before incorporating more sophisticated and automated tools.

RMI’s recent survey looked into factors that prevent the efficient use of resource management tools. They found that 54% of organizations have no access to real-time project key performance indicators (KPIs), and nearly 35% of project managers formulate resource plans using Excel. A full 77% of survey respondents were not using resource management software to generate “what if” scenarios. Many of those surveyed expressed distrust and frustration with the current state of digital resource management tools. The areas for improvement they identified were varied—forecasting and capacity planning (83%), reporting, dashboards and data analytics (79%), skills development planning (65%), skills inventory and database capabilities (64%) and project staffing (52%). While the greatest deficiencies they identified remain unchanged from year to year, a desire for skills development capabilities has been gaining ground, up 13% from RMI’s previous survey.  In short, resource management software could be used more effectively. 

Once an insurer has spent time mastering the fundamentals, they’re free to add packages that contain advanced technology and analytics. However, overlaying new software onto an organization’s deficient resource management function isn’t an instant fix—the software must be tailored to the unique goals and gaps in the organization. Incorporating management software can bring about more questions than answers, often shedding light on other deficient areas in a company’s infrastructure.

In RMI’s research, 64% of those surveyed said that even after their resource management software was implemented, it still lacked some of the features they needed. 56% of participants claimed their software lacked integration with other front- and back-office systems for forecasting. Even after the incorporation of modern tools, one weak link in the chain can still invalidate much of the software’s impact.

In the post-pandemic landscape, achieving a cross-organization view is easier said than done. The prominence of work from home means project staffers operate in an increasingly fractured and isolated environment. As a result of the atomization of the workforce and separation of teams, it’s difficult to achieve an integrated view across the entire project portfolio. But it can be done.

By integrating a centralized demand resource management process with better use of resource management software tools, organizations can run leaner and more appropriately staffed projects.

Brian Nordyke

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Brian Nordyke

Brian Nordyke is a vice president in the financial services practice at SSA, a global management consulting firm.

He leads teams as an engagement manager in areas such as organizational and operational model redesign, cost-to-serve and market profitability analysis, consolidation and relocation strategies and portfolio optimization and resource allocation. His experience includes identifying opportunities grounded in a data-driven approach and developing comprehensive solutions in client-focused business transformation strategies, workforce optimizations and operations integrations. 

Jonathan Schwartz

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Jonathan Schwartz

Jonathan Schwartz is a director at SSA, a global management consulting firm.

He partners with clients to guide performance improvement strategy and execution, managing large, complex programs and projects in manufacturing, distribution and service operations. In his over 25 years of experience in operations management and management consulting roles, Schwartz has worked with Fortune 100 enterprises, private equity portfolio companies and startups to improve operations and implement sustainable changes.

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