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5 Resource Management Challenges in a Matrix Organization and Ways to Overcome Them

 “According to a survey, 84% of US employees are matrixed to some extent.” 

This stat reveals that the majority of the workforce work across their departments and reports to multiple line managers. Over the years, as organizations started expanding their businesses, they adopted matrix structures to enhance workforce efficiency.  

Resource Management Challenges in a Matrix Organization

 It also brought numerous benefits, such as improved knowledge sharing, better interdepartmental collaboration, and communication, etc. However, matrix organizations face numerous resourcing challenges, such as double bookings, internal conflicts, frequent overload of resources, etc.  

This led to compromised work quality, delayed project delivery, loss of market reputation, and more. Therefore, organizations need to implement appropriate measures to mitigate these resourcing challenges. 

This blog explains how Saviom’s resource management solution can help overcome these challenges from matrix organizations. 

Let's begin. 

Matrix organizational structure: definition & types 

A matrix organization has a work structure where employees have multiple reporting lines and accountability. In other words, they report to more than one manager, unlike traditional hierarchical structures. 

For example, in a matrix organization, a graphic designer from the design department can work on a web-development project. Here, the designer will report to the project managers from the web development department regarding the project's progress. However, day-to-day operations, performance reviews, leave approvals, etc., will be done by the line manager of the same department. 

One of the most crucial benefits of a matrix organizational structure is that it brings together highly skilled employees from different departments. This allows a company to leverage its resources to their maximum potential and reduce hiring/firing costs. 

Based on the project manager’s authority, a matrix organization is categorized into three types.  

Weak matrix organization- It resembles a traditional hierarchical work environment with the line managers having more authority. The line manager oversees all aspects of a project and makes most of the decisions, and the project managers act as coordinators.   

Balanced matrix structure - It gives project managers and line managers decision–making power and resources work under the guidance and direction of both managers. Although the primary contact of resources are the functional managers, but they still have to report to the project manager.  

Strong matrix structure – It provides the project manager equal or greater authority than a functional manager. Resource allocation and task distribution are primarily under the control of the project manager. This structure places the project manager as the employee's primary supervisor, while functional managers serve as the employee's secondary supervisor.  

Now that we understand the basics, let's go through the various resourcing challenges in a matrix organization. 

Resourcing challenges in matrix organizations 

Here are five of the resourcing challenges managers can face in a matrixed structure- 

 1. Managerial conflict for the same resources 

A matrix structure provides a plethora of benefits to businesses; however, it can also create conflicts among the managers in the workplace. For instance, in an audit and accounting firm, two different tax advisory projects require the same critical analyst. However, both senior tax managers prioritize their projects and request resources from the resource manager. 

This leads to internal conflicts between the project managers and creates a dilemma in deciding which project should be prioritized. Further, when resources are working on different projects across departments, there are always high chances of competition, creating an imbalance in the firm. 

2. Ambiguity in employee’s functional and project roles 

As mentioned earlier, employees working in a matrix organization have multiple reporting lines. Thus, they often lack clarity about who their immediate reporting manager is. This creates confusion for resources regarding whether they should prioritize the project or functional work.  

Furthermore, when multiple leaders and managers are in charge of the interdepartmental team, they fail to communicate their expectations and goals. As a result, the resources are in a tight spot since they are not able to meet their manager’s expectations. 

3. Incompetent resource allocation and unclear project priorities 

It is common for resource managers in matrix organizations to receive multiple resource requests, and the majority of these projects require similar-skilled resources. In addition, most managers identify their work as a high priority making it challenging for resource managers to determine which project should be assigned first.  

This confusion regarding project priorities results in scheduling conflicts and slow decision-making. Furthermore, to meet the requirements, resource managers might allocate under-skilled resources to projects, thereby compromising quality. On the other hand, they might overload critical resources by assigning them to several projects, leading to burnout and stress. 

4. Inability to track and monitor resource utilization levels 

Monitoring employee utilization levels is crucial to ensure that resources are not underloaded or overburdened with work. In a traditional work structure, it is relatively easier to monitor resources’ utilization rates, allocations, etc., because there is only one reporting manager to supervise and regulate. 

However, in a matrix organization, employees work on numerous projects and are dispersed across the organization. This makes it challenging for managers to control and monitor their metrics and also communicate with employees about their work progress.  

5. Unable to adapt annual employee performance review guidelines 

Performance appraisals and reviews in the traditional organizational structure were more direct and specific as one line manager provides feedback on employee's overall performance. However, as matrix organizations came into the picture, it became more time-consuming and complex. 

For example, the resource manager will need to compile reviews from each project manager for a specific employee in order to conduct the annual performance appraisal. However, the feedback can't be guaranteed to be uniform or fair due to internal discrepancies, favoritism, etc., which can lead to a biased review from some managers. This can create a significant roadblock when reviewing the performance of employees.

Now that we know the various resourcing challenges, let's understand how resource management software can help.  

How can advanced resource management software help in overcoming these challenges? 

The resource management software helps a matrix organization function smoothly. 

Here’s how- 

Resource management software provides 360-degree visibility into projects/non-project activities, vacations, BAU/admin, etc. In addition, the software maintains up-to-date competency information and provides a single version of the truth.  

Thus, resource managers in a matrix organization can identify the best-fit resources and allocate them to the right task. Moreover, they can also identify and leverage cost-effective global resources across the matrix boundaries and minimize the project cost.  

The tool also has an automated resource requisition system paired with standard prioritization practices that can minimize power conflicts between different managers. Further, it helps maintains an audit trail that keeps all the stakeholders in the loop, thereby promoting transparency. 

Finally, the utilization heatmaps and forecast vs. actual reports also help managers understand how resources are utilized against their capacity and identify over or underutilization. Accordingly, they can implement optimization techniques such as resource leveling and smoothing to streamline workloads. It ensures that employees can work efficiently so projects are completed on time and within budget. 

 The Bottom Line 

A matrixed work structure allows interdepartmental collaboration and fosters a shared services model. Thus, it became imperative for companies to go beyond their conventional management strategies and switch to matrix structures due to globalization and increasing resource constraints. 

Unfortunately, this can lead to failed project delivery due to resource management challenges. But with the help of the right resource management solution, businesses can overcome this problem and increase profitability and sustainability. 

So, are you ready to adopt a matrix structure for your firm? 

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