Project Management Software Market Trends


Project Management Software Market Trends











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Project Management Software
Market Trends

by Faulkner Staff

Copyright 2020, Faulkner Information Services. All
Rights Reserved.

Docid: 00018914

Publiccation Date: 2002

Report Type: MARKET

Preview

The general Project Management software market is an intensely competitive
sector, perhaps even more so given the emergence of factors such as cloud and
SaaS (Software-as-a-Service) growth, social networking, Agile techniques, mobile device reliance,
AI (artificial intelligence), and new hybrid approaches.
This report takes a more detailed look at the growing Project Management
software market, which includes software from Microsoft, Broadcom, Oracle, and
SAP, among dozens of other companies.

Report Contents:

Executive Summary

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"Project Management" offers a type of software for tracking and documenting data
regarding schedules,
budgets, and other resources to more timely manage deliverables, dependencies,
and risks, in addition to helping provide project managers and team members with
tools for organizing, controlling, and completing projects.

Related Faulkner Reports

Project Management Best Practices Tutorial

In general, this type of application provides online interaction between project managers
and business-level stakeholders as – in both the public and private sectors –
organizations continue to make greater use of structured project management
practices as demand rises and the discipline becomes more standardized.

PPM

Software companies also continue to create increasingly sophisticated commercial
applications to meet these needs. These developments have spawned a category of software known as
PPM (project portfolio management) applications. PPM involves the high-level
management of numerous projects with an emphasis on overall strategic and
financial concerns. It assists organizations in deciding how to most effectively
allocate resources across multiple projects.

PPM is a relatively new discipline, and although it has not rendered
lower-end products obsolete, it largely dominates the discussion of
project management software.

Influences

Other major developments having a
major impact on project management software market trends are the increasing
popularity of:

  • SaaS (Software-as-a-Service), or outsourcing
  • Social
    networking
  • Agile project management techniques
  • Mobile devices
  • AI (artificial intelligence)
  • Customized / hybrid approaches1

These and other trends have helped to further open the project management software field to new
technology, both increasing the potential for collaboration and helping
project management software to fulfill a fuller potential.

Other Project Management Software Types

Some other new project management software products focus on areas such as software development, testing, and even physical
security. When evaluating a project management application, organizations should
first ensure that they have the business practices in place to take
advantage of the software. Project management tools can help to automate
existing processes, but they offer little value to organizations that lack
the processes and expertise to use them properly.

Market Dynamics

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Per the Project Management Institute (PMI), the demand for skilled,
systematic management of IT projects has risen dramatically in recent years,
with a number of factors affecting demand2, including:

  • The temporary nature of projects, in that they usually have a
    "defined scope and resources."
  • Their uniqueness, which means that projects are rarely a "routine
    operation."
  • Geographic distribution and communication issues
  • Standardization considerations
  • Factors related to implementing new technology

Failed Implementations

Estimating the failure rate of projects is complicated by differing
definitions of failure. However, there is a consensus that more projects
to some degree fail than succeed, as well as projects that are completed
late or only partially completed.

Per PMI, fewer projects can be deemed "failures" as opposed to
"meeting goals," as
illustrated in Figure 1.

Figure 1. Projects That Are
"Failures"

Figure 1. Projects That Are "Failures"

Source: Project Management
Institute

Figure 2, meanwhile, offers an extended forecast for the PPM market.

Figure 2. PPM Market Over Time (USD Million)

Figure 2. PPM Market Over Time (USD Million)

Source: Grandview
Research

By presenting the components of a project in an easy-to-comprehend visual
format, software tools can help managers anticipate, and therefore
prevent, scheduling conflicts, resource shortages, missed steps, and other
potential issues. Project management can improve the odds of successfully
completing initiatives and ensuring that they support a company’s strategy
and business goals.

Issues of Geographic Distribution and Communications

One of the key tasks of project management is the act of facilitating communication among a project’s stakeholders. As technology gets more
specialized, it is increasingly common for project teams to include
personnel from multiple departments within an organization or from
entirely separate companies. Reporting is frequently along “dotted lines”
rather than through direct authority structures. People from different
organizations often lack common channels and techniques for sharing
information, thereby raising the risk of miscommunications that spawn
project delays, quality errors, and other problems.

This problem is exacerbated as projects incorporate staff from multiple
cultures, countries, and even enterprises. The increased use of
outsourcing on projects in recent years has created more communication
gaps, thereby creating a greater need for effective project management.
The use of mobile devices has added more complexity to this need.

Project management methodologies can provide a common set of practices
and a common terminology that partly relieve these communication barriers.
Software assists communication efforts by centralizing data and by
creating communication channels, for example through progress reports for
stakeholders. Cross-organization communication requirements are driving
the development of software collaboration tools across networks,
firewalls, and continents. In particular, project management software that
works well on mobile devices and uses social networking technologies such
as blogs and wikis is steadily gaining in popularity as the enterprise
becomes physically more widely distributed.

Standardization of PM Practices

Estimating budgets, setting schedules, strategically assigning resources,
and other activities that collectively make up the discipline of
project management are familiar business practices. In recent years there
has been significant progress in standardizing and documenting these
practices. What was once a disparate group of techniques executed in
widely varying ways is now a collection of inter-related practices that
are applied with a degree of similarity from one organization to
another.

Of note, the Project Management Institute has greatly influenced the field
of project management through its guide to the Project Management Body of
Knowledge (PMBOK), first published in 1996. The PMBOK is an American
National Standards Institute standard, now in wide use. It aims to
document practices that are commonly employed, generally accepted, and
proven, as well as methods that are newer but represent important
innovations. PMI also offers a globally-recognized certification program, with its
first and most comprehensive certification the Project Management
Professional (PMP), which requires a defined level of experience and tests
candidates’ knowledge of project management practices as described in the
guide to the PMBOK. The certification test given to prospective PMPs also
tests candidates’ knowledge of PMI’s published Code of Professional
Conduct, which describes the ethical and practical obligations of the
profession. 

The continual trend toward credentialization has led to other
certifications offered by PMI, for example the Program Management
Professional (PgMP), for managing multiple projects; the PMI Scheduling
Professional; the Certified Associate in Project Management; the PMI Risk
Management Professional; and a PMI Agile credential. 

The growing standardization of the discipline of project management has
enabled developers to create software with logic that conforms to widely
accepted practices, therefore making the software marketable to a larger
base of potential customers.

Implementing New Technologies

Projects that involve new technology are more difficult to execute than
those that involve familiar technology implemented in familiar ways, and
larger, more complex projects obviously provide challenges for project
managers. Whereas initiatives that are similar to those performed in the
past can sometimes be executed with informal oversight, projects that
break new ground definitely require structured control. The release in the
past several years of a multitude of new technologies has therefore
contributed to the need for and growth of project management. Specifically, project management software helps to do the following for
implementations of new technology:

  • Identify risks by assisting in creating risk response plans that
    define alternative courses of action to keep a project on track.
  • Schedule activities, breaking them down into modular elements
    that are scheduled in advance.
  • Measure performance to assess budgetary and scheduling goals,
    evaluate progress, and determine actual cost.

Market Leaders

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Even though the "major" software vendors enjoy
the advantage of in-place customer bases, they are seldom among the
leading edge of the congested field that is often represented by a significant
and constantly increasing number of smaller and often independent vendors.
Hundreds of software developers offer project management software – in many
cases more innovatively than the larger companies – have to adapt their software to the requirements of their extensive
product suites. In particular, the smaller vendors are leading the way in
the adaptation of social networking technologies to project management.

Despite this fact, the most commonly used applications for project management
are the desktop version of Microsoft Project, Broadcom’s Clarity PPM, and
Oracle’s Primavera, among others. Microsoft, in particular, also offers an enterprise version of its
industry-standard desktop application and a cloud-based
project management solution.

Microsoft

Microsoft Project is successful largely because of its massive Windows distribution.
Microsoft’s current desktop portfolio management software product
is Microsoft Project 2019. Microsoft acquired its portfolio
management tools through its January 2006 purchase of software and other
assets from portfolio management software vendor UMT, allowing Microsoft
to join the PPM trend.

Microsoft Project Server offers project managers the ability to schedule activities,
assign resources to tasks, and perform basic cost estimating from the
desktop. The product’s integration with other Office applications enables
it to generate status reports in popular formats such as Microsoft Visio
and PowerPoint; the integration also allows resource lists and assignments
to pull from Active Directory user accounts. Project plans can be shared
on a network using Microsoft’s SharePoint Services, but this requires
the use of Lync. There are other limitations: Project is not as effective
a collaboration tool as some other products, and it does not adapt
seamlessly to agile project management. New features for Project 2019 include:

  • Support for linking tasks using a drop-down menu.
  • A Task Summary name field.
  • Timeline Bar labels and Task Progress.
  • Various accessibility improvements.

Suite Involvement. Microsoft Project belongs to a suite that includes
standard bearers such as Word, Excel, Outlook, and Visio, but it is not included
with the Office suite unless purchased at additional cost. It benefits from the
collaborative possibilities of the latest version of SharePoint, on which
EPM (Enterprise Performance Management) is based. This integration enables
users to update information in project files by using Microsoft Outlook
and other office tools with which they are familiar. 

Project Server. The server component, Microsoft Project Server, facilitates an
enterprise-wide view of all active projects while controlling centralized
resource tracking and allocation. It provides Web-based access to status
reports and offers a central repository for archives of past projects
and templates. When a manager of a particular project updates an
individual plan, he or she can publish information on that change to
Project Server, thereby informing other project stakeholders and managers
of other projects. Based on the project’s policies for approving changes,
modifications from one person can be rejected by a higher-level decision
maker. Project Web Access is a part of Project server that allows
accessing all of Project’s features through a Web browser.

Project Online. Microsoft now offers Project Online, including a “Lite” version, as a
part of the cloud-based Office 365 but can be used without it. Project
Online includes most of the functions of Microsoft Project Server, but has
certain limits on number of projects and storage size.

Broadcom

Broadcom’s Clarity PPM is the
successor to CA’s Clarity PPM, and was acquired as part of the companies’ 2018
merger. The release is part of a full suite of Business Services Optimization
solutions for enterprise support and management. Particular areas of focus
include (in addition to traditional project management):

  • Transitioning to digital product
    management

  • Countering market disruptions

  • Maximizing resources

  • Pivoting to fluctuating customer
    demands

Oracle

Oracle positions itself as the largest vendor for project portfolio
management software for project-intensive industries. This asset is based on
Oracle’s 2008
purchase of PPM software developer Primavera.

Primavera offers management
tools to allow for side-by-side viewing of two portfolios at once. The
product’s extensive, customizable visualization capabilities depict schedules,
financial information, and resource utilization and availability. This
information can be published to an intranet or extranet for Web-based viewing.
Its scheduling tool enables critical path modeling of task dependencies.
Particular coverage elements include:

  • Cloud
  • Enterprise PPM
  • Portfolio Management
  • Unifier
  • Submittal Exchange
  • Analytics
  • Gateway and Integration

SAP

SAP offers PPM software for the
"full project lifecycle" from a centralized source. The application is designed
to keep on top of one’s portfolio via forecasting, planning, accounting, and
closure features. The software is intended to be an "iterative" process.

IBM

IBM’s Rational Portfolio Manager is intended to be an “iterative” process, with the possibility of
being implemented in segments. Its full suite is extensive. It contains
Portfolio Management, Product Management, Project Management, Performance
Measurement and Management, and Process Management modules. Rational has
strong portfolio management tools and strong integration with the IBM
product suite, along with development projects with WebSphere and Tivoli. The
Rational methodology does not literally follow PMBOK terminology at all
points, but is similar, which is one of its major strengths. Rational
extensively uses “mentors,” its term for built-in processes.

Other Competitors

There are many different products on the market. Some of the more prominent
ones include:

  • JIRA – Project management system that has a strong mobile
    component and is particularly agile-friendly.
  • Clarizen – SaaS (Software-as-a-Service) product that emphasizes its capability for agile
    project management and connections to social networking applications, and
    offers a project roadmap feature, budgeting module, and smooth email
    integration. It supports the use of CAD drawings in project management
    materials.
  • Celoxis – Web-based product that provides integration with Salesforce.com,
    automated reporting features, and a highly functional resource load chart
    capability, and claims scalability to small as well as large projects.
  • EPM Live – Designed to work with SharePoint, and offers many of its features in free apps. It
    provides wiki functionality and has an impact prediction feature, and is
    customizable to the needs of the particular project manager.
  • Planview – Cloud-based service that stresses project management
    best practices, including project lifecycle software, templates for work
    breakdown structures, and dashboards.
  • ChangePoint – Adaptable, intuitive, and intelligent
    software for reducing the time spent capturing and mapping processes.

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In keeping with the increasing formalization of the project management
discipline, project management software has grown more complex, evolving
from desktop tools to enterprise-caliber networked applications and onto
the cloud and mobile devices. These shifts reflects a change in project
management’s role within business. Historically, project management was
largely a tactical discipline used by line managers and working managers.
Today, however, several project management techniques have been
transformed into methods used by executives for strategic planning. This
is the discipline known as project portfolio management (PPM).

Rather than setting goals, allocating resources, and developing budgets
for individual projects, PPM performs these tasks across multiple
projects. Overall corporate strategy and goals are the guiding factors in
making decisions about projects. Traditional management activities remain
in place, close to the ground level of individual projects, but they
take direction from portfolio management practices, which target
enterprise-wide concerns such as profitability.

In PPM, a project is viewed as an amalgam of resource investments that
include labor and its costs, primarily salaries; IT hardware and
software; and project priorities, such as costs associated with postponing
or commissioning other projects. PPM helps organizations determine which
projects best meet their business objectives, taking into consideration in
particular the factors of benefits, costs, and risks.

Beyond the incorporation of portfolio management tools into project
management software, portfolio and project management software is merging
with professional services management software, used primarily by IT
organizations. Leaders in this genre include Compuware and Planview.

The possibilities of PPM have not been exhausted. Other logical steps are
the linking of portfolios among separate enterprises; the integration of
PPM with other IT systems, including databases that manage resources; and
connections with inventory systems, in order to measure the results of
implemented projects.

PPM is changing the mindset of many about the purpose of project
management software. The large number of lower-end and Web-based vendors
attest to the continued interest in less-comprehensive products. Many
organizations use software that calls itself project management but offers
limited functionality, for example dedicated timesheet tracking software.

With a densely crowded market, consolidation among project management
vendors seems inevitable. For years larger companies have been buying
technology from smaller players in order to expand the feature sets of
their own enterprise-caliber products. However, there continue to be
numerous smaller project management software vendors.

As project management continues to become more standardized and portfolio
management achieves wider use, it is likely that mid-sized and large
customers will continue to abandon the patchwork of single-function
applications they have been using in favor of single, comprehensive
solutions. The single-function applications that do survive are predicted
to be those that target a particular vertical industry, those that
supplement the capabilities of widely used tools such as Microsoft
Project, and those that exploit the continuing growth of mobile devices.

The tendency of computing is to continually expand its ability to
communicate more information over larger areas. This is of course
particularly seen in the continually expanding capabilities of the World
Wide Web. Portfolio management is largely incorporating previously
standalone project management software, which means that Microsoft,
despite its enormous advantage in installed base with Microsoft Project,
is in this sense playing on a level field with vendors of web-based
products, particularly those in the vanguard of developing technologies.

Agile project management methods and social networking methodologies such
as blogs and wikis have made inroads in the market share of more
mainstream products and will continue to do so. The same can be said
of SaaS, that is, the outsourcing of project management platform
functions, particularly on the Web.

The full impact of mobile communications on project management is only now
beginning to be felt. Many of the newer project management software products
also emphasize mobile development as a way of
opening up the project management market.

Strategic Planning Implications

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Criteria for the selection of project management software packages sort
themselves into two general questions: Is the goal only project management
(PM) or does it also include portfolio project management (PPM)? Should
the software be locally or remotely hosted, and on what platforms should
it operate? Clear answers to these questions are the beginning of the
software selection process. As noted above, PPM increasingly is being seen
as a necessity and not a choice, for reasons both of economics and of
control. Similarly, technologies such as mobile devices are to some extent
driving organizational choices.

No project management software will succeed in its purpose without strong
support at the highest levels of management. Project management software
deals with the “triple constraints” of time, resources, and quality. If
management sets arbitrary time schedules, declines to recognize
limitations in resources, and nevertheless insists on high quality
programs, project management software provides a tool for demonstrating
that such a situation is untenable, but on its own it cannot change
decisions. Management must accept the assumptions of the project planning
process if the process is to succeed.

On the operational level, project management software has limited value
without knowledge of project management practices and without a program to
put those practices into effect. Estimating costs, allocating
resources, and scheduling activities are the core of project management.
Performing these tasks requires historical information, an understanding
of the nature of a given project, and other knowledge that is based on
human input. Although software can assist in these tasks, expertise is
required.

For instance, project management software cannot prevent a user from
creating a construction plan that schedules wall painting before the
foundation is finished, unless the user labels the latter task as being a
prerequisite for the former. Some solutions offer templates that help
guard against common problems, but templates are not a substitute for
expertise. Likewise, an application cannot prevent users from assigning
unqualified people to tasks, unless restrictions on resource assignments
are inputted into the system, and even then they require human
interpretation. Consequently, the first step in planning for the
implementation of project management software is ensuring that a project
management program is in place to support the software.

There are multiple grades of project management software, from simple
time-tracking applications to enterprise-caliber PPM tools. The
sophistication of the project management practices of a company will
impact its choices in software. Organizations should seek applications
that tighten and automate current processes rather than looking
to software to implement entirely new procedures. Companies that are
familiar with social networking products will want to explore more
adventurous project management software products, and at least to
understand their possibilities.

Scheduling, resource allocation, and simple cost estimating on a
project-by-project basis will comprise the project management processes of
most organizations. Microsoft Project remains the most popular application
for such tactical management, although it has a significant learning
curve. In many cases organizations supplement Project with an assortment
of low-end applications, including time-tracking software and
custom-developed spreadsheets.

Despite recent advances in the discipline, many project managers continue
to use software in a rough-and-ready fashion that does not take advantage
of all of the capabilities of the applications at their disposal.
Organizations should ensure that they are using their current tools to
their full advantage before upgrading to a new application.

If an organization determines that it has outgrown its desktop software
and needs an enterprise-caliber solution, it should consider implementing
a PPM program. While the practice of project management has undergone
significant development, portfolio management is a relatively new
discipline. Most organizations will have few, if any, portfolio processes
in place. A workable strategy to implement a portfolio management program
is to develop basic practices, then build upon the existing program and
expand it into portfolio management.

The transition to a new tool is relatively easy for project managers who
have already learned the product’s interfaces for scheduling and resource
allocation. The main hurdles are likely to be bringing executives into the
project management team, and getting them to use the software’s portfolio
management features.

Even the most sophisticated enterprise application will lack some
capabilities that organizations may find essential for managing projects
and making strategic decisions. As is true in other situations, the work
situation should drive the technology, rather than the other way around. A
software product that automates bad project management procedures will not
improve results.

While it makes sense to replace a large patchwork of incompatible
products with a single application, it may be necessary to supplement that
application with one or two additional packages. The processes most likely
to require a third-party application include the following:

  • Mathematical Analysis— Most off-the-shelf project
    management software includes these capabilities, but particular
    requirements may require additional capability.
  • Simulation Techniques—An example is Monte
    Carlo     analysis, which uses algorithms to simulate
    mathematical systems, and which can be used for identifying and
    assessing risks. Examples of this type of software include @Risk from
    Palisade Software and Crystal Ball from Decisioneering.
  • Historical Databases—There are services that provide
    databases of historical information that organizations can use to
    estimate project durations.

The more tightly integrated the supplemental application is with the main
application, the better. Tight integration will enable the applications to
share data without time-draining manual input.

The decision to implement PPM may necessitate the establishment of a
project management office (PMO), a center for administration and control
of all projects within the enterprise, including the project management
software application.

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Sources

    1 Brownlee, Dana. "4 Project Management Trends On The Horizon…
    Are You Ready?" Forbes. July 21, 2019.
    2 "What is Project Management?" Project Management Institute.
    Accessed February 2020.

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