Once the project has been broken down into tasks, the resource needs of each task must be determined. This takes the form of equipment, tools, labor, and any other item of expense necessary to carry out the task. This is not a trivial component, and missteps can quickly cost the project in the form of expensive changes during project execution.
In the Project Management Body of Knowledge, the main output of the Estimate Activity Resources process is an item called Activity Resource Requirements. This takes the form of a task estimate table for each task, which will be used in the future cost estimates and schedule development processes.
Task Estimates
When performing scheduling manually, you would produce a table that looks like this:
| 210 Pour Concrete | ||
|---|---|---|
| Type | Average Use | Total |
| Concrete | 12 yd3 @ $45/yd3 | $540 |
| Jon | 6 hours @ $25/hr | $150 |
| Sweat Equity | 6 hours @ $0/hr | $0 |
| TOTAL | $690 | |
Notice that resources that are perceived to be free, like sweat equity, are still used in the estimate because they can impact schedule durations. In other words, you might want to pay a professional to finish the concrete pour quicker than you could do it yourself, but you won’t know the difference unless you include the free resource and plot the schedule impact.
Also, resources that are not free are often percieved to be free, for example gravel from a county owned gravel pit that is destined for a county job site. In this case you need to ensure the full cost of the project is accounted for, even if it’s an estimate.
Activity Resources
The resources can take the following forms:
- Labor. This usually takes the form of hours or days assigned to the task or project. It’s easy to assume all labor is the same, but make sure you consider that experience and knowledge level vary drastically. For example, junior vs. intermediate engineers have varying levels of productivity. Also, for knowledge workers such as engineers, the addition of more of them tends to slow the decision making process down, not speed it up.
- Equipment. Often equipment is sourced at hourly rates, or internally owned equipment has an hourly rate applied to it.
- Materials. If the project needs to purchase materials, their cost is often easy to estimate from published rates, or quotes can be obtained from suppliers.
- Fixed cost items, such as a subcontractor. This is a double edged sword, as a subcontractor’s costs are fixed, but they take responsibility for the schedule and quality of work away from you. Also, you must know the fine print, or else the costs might not nearly be as “fixed” as you think.
It is not only important to know what resources you need, but what their minimum specifications are. For example, you might know you need a crane, but how big of a crane? Another example might be that the project’s budget will invest in a new printer to produce a large report, but if it prints too slow it might severely bog down the production process.
Resource Calendars
For larger projects or project management offices, resource calendars can be consulted before assigning resources to specific tasks. Resource calanders show the availability of a resource in calendar form. For example, here is Bob Jones’ resource calendar for the first two weeks in June:
| Bob Jones | |
|---|---|
| Date | Project |
| June 2 | Engine Lathe retooling (10034) |
| June 3 | Engine Lathe retooling (10034) |
| June 4 | Engine Lathe retooling (10034) |
| June 5 | Engine Lathe retooling (10034) |
| June 6 | Engine Lathe retooling (10034) |
| June 9 | Machining conference |
| June 10 | Machining conference |
| June 11 | Holidays |
| June 12 | Holidays |
| June 13 | Holidays |
Resource Breakdown Structure
An optional part of the Estimate Activity Resources process is the development of a Resource Breakdown Structure. This is an itemized list of the project resources which helps to organize and plan the acquisition of resources.
The format is not significant. It can be a graphical hierarchy or an itemized list. Here is an example itemized list:
- 100 Preparation
- 110 Excavation
- Mini Excavator, 4 days @ $450/day
- Sweat Equity, 12 hours @ $0/hr
- 120 Build Forms
- Lumber, $100
- Sweat Equity, 8 hours @ $0/hr
- 130 Place Rebar
- Rebar, $200
- Sweat Equity, 24 hours @ $0/hr
- Jon, 24 hours @ $25/hr
- 110 Excavation
This step, which occurs right after determining the tasks, itemizes the resources for planning. Sweat Equity is not necessarily included in this list, as long as there is no planning involved with the resource (maybe you need to purchase certain clothes, work boots, etc. These can be included separately or simply included as Sweat Equity)
How to Determine Required Resources
Professional estimators use several techniques to estimate the resources required for a task. To estimate the resources required for each task, proceed through this checklist, ignoring the ones that do not apply to your project.
- Bottom up Estimating
- Expert Judgment
- Alternatives
- Published Data
Bottom Up Estimating
This is the foundation of estimating, and should be the starting point of any estimating activity. In bottom up estimating, each individual task is estimated starting from the bottom level. The resources required for each task in the activity list are considered one at a time and rolled up into a final resource and cost estimate.
The people who will be carrying out the task could provide input into the estimate, or produce the estimate entirely, but this is not a necessity.
All projects should include some form of bottom up estimating, even if other methods are used. It would be too easy to miss components of the estimate if you did not consider each task individually to ensure every tool, piece of equipment, or labor hour was accounted for at the task level.
Expert Judgment
The first thing that professional estimators will tell you is that there is no substitute for a technical expert. Often these technical experts are very busy people who are tied down on many different projects, but they are also very helpful in the planning phase. In general I believe that technical experts tend to balk at being given project work, however during the project’s planning phase they tend to love contributing, since this is where they see their value to the organization.
If you have a technical expert available, you must use them.
Alternatives
Resources usually come with many alternatives and you should not underestimate the different options at your disposal to carry out the work. Here are a few examples:
- Rent vs. Buy. This is a common scenario whereby you must choose between paying a hourly or daily rental fee or making a one time purchase. Often your project can’t by itself justify the cost of purchasing the equipment, but a small future use by the organization in the future can push the decision into the buy side.
- Type of Equipment. You need to analyze each piece of equipment to determine if a different, cheaper one can do the job. For example, you need to lift some concrete blocks, but do you need a crane or can an excavator lift them?
- Type or Quality of Expertise. Often you can change the type of labor you use, or substitute unskilled labor. For example, a concrete finisher can drive the bus while the bus driver is on holidays.
Published Data
Most industries have some sort of publications which summarize cost and resource data for standard tasks. For example,
- Sweets catalog in the construction industry
- Douglas Cost Guide for the Agricultural industry
- CostMine in the mining industry
These are usually well researched guides that take into account many factors such as geography, size of project, and application. They often contain costs and resources per unit with potential adjustments explained to give you some direction as to what the final value might be.