What's the best way to choose resource allocation models and tools for your business?

1 Objectives of resource allocation

The first step in choosing resource allocation models and tools is to define your objectives, or what you want to accomplish with your resources. Your objectives should be specific, measurable, achievable, relevant, and time-bound (SMART), and aligned with your overall business strategy and vision. For example, some common objectives of resource allocation are to maximize profit, minimize cost, optimize quality, enhance customer satisfaction, or improve sustainability.

2 Constraints of resource allocation

The second step in choosing resource allocation models and tools is to identify your constraints, or the limitations and restrictions that affect your resource allocation decisions. Your constraints can be internal or external, and they can be fixed or variable. For example, some common constraints of resource allocation are budget, time, capacity, demand, regulations, or contracts. You should also consider the trade-offs and opportunity costs that result from allocating resources to one activity over another.

3 Criteria of resource allocation

The third step in choosing resource allocation models and tools is to establish your criteria, or the standards and measures that you will use to evaluate and compare different resource allocation alternatives. Your criteria should be relevant, objective, consistent, and transparent, and reflect your priorities and preferences. For example, some common criteria of resource allocation are return on investment (ROI), net present value (NPV), efficiency, effectiveness, feasibility, or equity.

4 Methods of resource allocation

The fourth step in choosing resource allocation models and tools is to select your methods, or the approaches and techniques that you will use to allocate your resources among different activities and projects. Your methods should be appropriate, reliable, and flexible, and suit your objectives, constraints, and criteria. For example, some common methods of resource allocation are top-down, bottom-up, incremental, zero-based, or participatory.

6 Tools of resource allocation

The sixth step in choosing resource allocation models and tools is to use your tools, or the software and applications that you will use to implement and support your resource allocation models and methods. Your tools should be user-friendly, efficient, and compatible, and provide useful features and functions for your resource allocation tasks. For example, some common tools of resource allocation are spreadsheets, project management software, decision support systems, or optimization software.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?