The Definitive Guide to
Project Management Software
Project management plays an important role in helping companies get things done.
Depending on the company, projects can take a variety of different forms and include multiple deadlines, budgets, and stakeholders.
Having to manage many components of a project can be overwhelming. Project management software helps with that. And that’s where our Definitive Guide to Project Management Software comes in.
Here, we provide an overview of project management software and then break down its features, the benefits and challenges, and what to look for when making a purchase.
Project Management Overview
Project management software is a solution that helps businesses plan and organize projects from start to finish.
Solutions can range from simple task-tracking tools to complex programs. Depending on the software, there can be additional components offered, such as billing and invoicing, task management, collaboration, resource allocation and more. Project management software can either be deployed on-premise (where the software is installed on the company’s servers or computers), in the cloud (where the vendor hosts and maintains the data) or both.
The project management field has been around for a long time. In the early 20th century, engineer Henry Gantt created a diagram that was used to illustrate a project’s schedule during World War I. His Gantt charts are still used today in project management software.
The project management software market was established in the late 1970s when three vendors debuted their software: Oracle, Artemis and Scitor Corporation. It experienced significant growth over the next three decades due to changes in computer technology.
Types of Project Management Software
There are a lot of project management solutions on the market, from free online apps to enterprise-level solutions. Some project management solutions are intended only for specific company sizes (e.g., Doc-Minder is aimed for large and enterprise markets), while most others are for companies of all sizes. Some solutions are even industry-specific, such as construction or engineering, and others are targeted specifically for job functions (e.g., creative, marketing, IT).
Project Management vs Project Portfolio Management (PPM)
A common term in the project management market is project portfolio management (PPM). Both terms may be used interchangeably, but they actually are not. Project management refers to managing a specific project that includes many tasks, while PPM refers to multiple projects, that is, a portfolio of projects.
According to Learning Strategic Initiatives, there are eight distinctions between project management and PPM. One of those distinctions involves the risk management approach: Project management views risks as threats to projects, whereas PPM regards them as opportunities. Project management relies on a set timeline for the start and finish of a project, but PPM does not.
Project Management Software vs Task Management Software
Another term used when referring to project management software is task management software.
Unlike project management software that focuses on all aspects of a project, task management software specifically targets the tasks themselves. Task management solutions are ideal for companies that may not have specific projects (or need a dedicated project management software), but want an electronic solution that helps them track and manage tasks. Like project management solutions, task management software ranges from free apps to enterprise-level solutions.
Project management software includes many different features. Depending on the type of software and vendor, some features are standard, while others are not. We detail several of the common features:
Task management: The task management feature allows the user to create tasks and assign them to other users. Users can also track the milestones, statuses or deadlines of each task within the software.
Budget and expense management: With the budget and expense management feature, users can set budgets (e.g., labor, materials, vendor fees, etc.) during the beginning of each project and track both the budget and expenses incurred during the life of the project. If there were similar projects done in the past, project management solutions provide accessible historical data to help set budgets for current projects.
Resource management and allocation: The resource management feature allows the project manager to determine availability of resources (e.g., staff, materials) before dedicating them to specific projects. Details about each resource, such as an employee’s job title or a cost of inventory, are available to help determine how they are allocated.
Gantt charts: A Gantt chart is a bar chart that illustrates a project’s schedule. The chart can be used to set tasks, project start and end dates, and statuses of each task.
Time tracking: The time tracking feature helps businesses track labor costs by having employees track the time spent on each task. This feature is most common in professional services where hours worked are billed to the client. Employees can track their time in a time sheet format or with another time-collection method, such as integration to a time clock software.
Collaboration: Collaboration is becoming more common in project management software as users need to share information or ideas relating to a project. Examples of collaboration includes file sharing, providing feedback on tasks and sending status updates. Some software, such as Mavenlink, includes a social networking-like feed for sharing and commenting on project information.
Document management: Another common feature of project management software is document management. Users can store documents and other files relating to specific projects. Users can also share files with other users and set permissions for access, such as read-only or ability to edit.
Reporting: Reporting is a common feature in project management software because it helps make the project transparent for executives and clients. Reports can be created with real-time data using either built-in or customizable templates. Depending on the vendor, reporting (or even advanced reporting features) may be offered in a higher pricing plan.
Using project management software has several benefits, including:
More automated workflow: To keep tracking every detail of a project from being time-consuming, project management software has built-in alerts and other automated workflows. For example, alerts can be sent to remind team members of deadlines for specific tasks.
Better management and insight on project costs and budget: Most projects have a budget involved. And project managers need to be able to manage the expense of a project to keep it within budget. Some project management software has a feature where users can set a budget, and the solution can alert them when the project is in danger of going over the budget.
Improved collaboration and document sharing among project teams: Since a team typically works together on a single project, collaboration is important. Project management software has increasingly included collaboration and/or document sharing features. A project manager can assign a specific task to a user and find out the status of the task straight from the software. Or users can share documents that others can edit.
Better organization and more standardized processes: For companies that work on several similar projects (such as multiple projects for the same clients), it’s important to have a standardized process that can be automated to reduce the time involved in project tracking. Project management software has templates that can be reused multiple times, depending on the nature of the project, so the user can just update the template with any new information. Also, all resources relating to the project are centralized, which keeps projects more organized.
Ability to integrate with other systems: Many project management solutions can be integrated with other systems and applications, especially cloud-based project management solutions. Such systems can include Microsoft Office programs, accounting, customer relationship management (CRM), enterprise resource systems (ERP), Google Apps and social media sites.
While a project management solution has its benefits, it also comes with challenges, including:
Getting buy-in from top executives, IT, managers and users: Getting buy-in from key players is critical to purchasing software. But these key players may be resistant or have concerns about a project management solution. For instance, IT may have concerns about data security if a vendor hosts the solution. Or they may not want the responsibility of hosting and maintaining the software on-premise.
Top executives may have concerns about spending the money on a solution if there’s no return on investment. And finally, project managers and users may be resistant to a software if they’re used to managing their projects in a specific way.
Only needing to use a few features at most: This can be a key challenge, especially for small businesses that only need, at most, two or three simple features and not an elaborate project management software. However, there are software vendors that offer different pricing plans that can be scaled up or down. The key is to figure out what features are important for the business.
Execution issues: Project management solutions help users manage projects, but they don’t replace the manager’s responsibility to ensure deadlines are being met and tasks are executed. Even with automated alerts, a team member can still forget to complete a task by the deadline.
Like other software, project management software has experienced changes. We’ve listed a few new market trends below:
Companies are becoming more agile (more flexible): Agile project management is an alternative to the “waterfall” methodology where tasks in a project are done sequentially. It’s becoming a trend in large and enterprise companies because clients’/stakeholders’ project requirements change constantly, but the projects must still be done on time. One field where this is the case is IT.
Mobile functionality: Emphasis on mobile functionality in project management software is a market trend as employees are increasingly spending more time away from their desks. In fact, according to Innovative Management Solutions, by the end of 2016, computers will be obsolete for project management tasks. Mobile project management features are accessible via an app or within a device’s web browser.
Big data and analytics become more prominent in project management: Tracking data within projects is more than running reports – users need to be able to drill down into the data to find key insights. Normally, they would have to purchase a business intelligence solution. Now, more project management software vendors are including analytics integrated into their products – for example, users can rely on data from an old project to help determine if a new project can be different. Users will also be able to analyze large amounts of data (big data).
Project management teams are more remote: One big trend in the project management industry is an increasingly remote workforce. Software vendors have capitalized on that trend by providing cloud-based solutions, as well as collaboration and social networking features.
Before purchasing any project management software, it’s important to figure out what features you’ll need. Perhaps you only require a few specific features or need a full-featured solution. Or you’d rather deploy the solution in the cloud than on-premise. It’s a good idea to have a checklist with requirements and questions to ask before looking at vendors.
Be sure to consider these key factors before making a purchasing decision:
Cost – Project management software is offered at many price points. Many vendors have scalable pricing plans that include more features for a higher price. Also, when comparing prices from different vendors, be sure to take the various deployment methods into account. Cloud-based solutions are often cheaper than on-premise software. It’s also important to know if implementation, support and training services are included in the software cost or are additional fees. Keep these factors in mind when asking for a price quote.
Scalability – Are you planning to expand your business or do you anticipate that multiple users will need to access the software? If so, you’ll need a solution that can scale up or down to fit your needs. You’ll also want to ensure that the software can accept as many users as possible (or even an unlimited number of users).
Ability to work with existing systems – It’s important to find out whether the project management solution can easily integrate with any existing software, hardware or server, especially if it’s on-premise. If you regularly work with the systems mentioned in our Benefits section above, you’ll want to ensure the project management software can work with them.
Demo of the solution – Getting a demonstration of the solution can help you see how it works – and how it can fit into your company’s operations. As another way to test the software, some vendors offer a free trial before purchase (typically 30 days).
Training and support during and after software implementation – You’ll want to ensure the vendor offers implementation assistance, including any training. Does the vendor offer training remotely or onsite? You’ll want to choose a vendor that can provide training at your company’s convenience, if possible – for example, having a rep conduct training sessions for multiple users onsite. Also, make sure the vendor provides support after the software is deployed, such as 24/7 tech or customer support via phone or online.
Request to speak with vendor’s current or past customers – It’s important to seek references from a vendor’s existing or previous clients. The vendor will give you the names of most positive clients, but ask for companies that have similar needs to yours (e.g., small office or specific industry). When contacting the reference, ask if there have been any issues with the vendor or the software. You’ll want to get input on not just the positive experience, but any issues as well. Also, if the vendor has been in business for less than five years, it’s especially important to get references from its clients.
To help narrow down your search of project management vendors, head over to our Reviews page, where we’ve profiled some of the most popular project management solutions.