Construction companies are increasingly using software applications to manage projects. In response, we surveyed project managers who use software, asking questions about how their project management program is licensed, their overall satisfaction with it and the top challenges they experience.
While software with a free license sounds appealing, we wanted to find out from users how free and open-source products compare to proprietary software. This report explains our findings, and includes recommendations for construction project managers on choosing the license type that’s best for their business.
- More construction project managers in our sample who use proprietary software say they are satisfied with their purchase than those who use free construction project management software: 69 percent versus 26 percent.
- While more proprietary software users than free and open-source users are satisfied with their product on each of six comparison criteria, only 10 percent more say they are satisfied with its cost.
- Proprietary software users report fewer challenges than free and open-source users, but the top challenge for both is integrating the project management software with existing systems.
- Only 6 percent of proprietary users in our sample say they have challenges with customer support, product bugs and errors and functionality limitations.
- Most survey respondents—87 percent of proprietary users and 55 percent of free and open-source users—say they would recommend their current product to other construction managers.
In 2015, 52 percent of construction software buyers who contacted Software Advice are making the transition from managing projects with pen and paper to managing projects with software. For project managers in small construction companies who have handled jobs manually for many years, differences between the types of software licenses and their associated fees might seem mysterious.
Since cost is an important factor in choosing new software, you should understand the advantages and disadvantages of free vs proprietary construction project management software license types, and learn about your peers’ experiences with them. That way, you’ll have high-level benchmarks to use when creating a shortlist of products and establishing a basis for comparing them.
Let’s start by outlining the characteristics of three common software licenses.
Free vs. Open-Source vs. Proprietary Software Licenses
In this report, we refer to “free,” “open-source” and “proprietary” software. Definitions vary from source to source, but we define them as follows:
Free: Software that is licensed for use free of charge. This includes free versions of proprietary software.
Open-Source: Software that usually is licensed for use free of charge, and with source code that is made available for modification and distribution. While the license cost is often free, this software usually incurs implementation, development and other costs.
Proprietary: Software that incurs either one-time (perpetual) or recurring (subscription) fees for the license to use the software. Users cannot modify, distribute or resell the source code.
The table below lists the top advantages and disadvantages of each license type:
For commercial open-source and proprietary products, vendors might also offer more specific license models. Under these models, fees are based on certain characteristics of your company or projects, such as:
- The number of projects the software will support in a certain time frame
- The number of employees who will use it; a project’s total value
- Your company’s annual revenue
Now that you know the basics, you might be wondering: Does the type of license users choose correlate to their overall satisfaction with the product? According to our analysis, the answer is “yes.”
Proprietary Users Are 165 Percent More Satisfied
Overall, significantly more construction project managers who use proprietary software are satisfied with their product than their counterparts who use free and open-source products: 69 percent say they are “completely satisfied” with their proprietary software, while 31 percent are “mostly satisfied.”
User’s Overall Satisfaction, by Software License Type
Conversely, among free and open-source software users, 26 percent are “completely satisfied,” 71 percent are “mostly satisfied” and 3 percent are not satisfied at all.
While project managers in our sample are more likely to be satisfied with a proprietary product, there are still many satisfied free construction project management software users. Clearly, such products are still a viable option for some construction companies.
Drilling into qualities of the products themselves, we again find that higher numbers of proprietary software users are satisfied than are free and open-source users. The spread is much lower for cost, however, where only 10 percent more proprietary users are satisfied.
User’s Satisfaction With Software, by Category
That proprietary users are only marginally more satisfied on cost could be explained by the simple fact that no one enjoys paying invoices, but TCO is more likely the reason.
Just as the name implies, “total cost of ownership” means the total cost paid over time to own, use and maintain the software itself, including related hardware, customer support, training, management, downtime and more. Interestingly, whether you’re using an off-the-shelf proprietary product with a subscription license or an open-source product with a free license that incurs custom development costs, TCO tends to equalize over time—so companies end up paying about the same amount for either license type if they own the software long enough.
(This, of course, does not apply to software that is completely free to use and requires no additional hosting, customization, support and maintenance.)
Integration Is Top Challenge for All Software Users
Project managers in our sample experience some challenges with their construction software, no matter how satisfied they are or how it is licensed. Paid-license users experience fewer challenges, however, and for all users, integration with other systems is the top challenge: reported by 57 percent of free and open-source users and 23 percent of proprietary users.
Users’ Top Software Challenges, by License Type
This is a meaningful discovery for project managers—because, as we recently reported, 35 percent of them want new software in order to improve integration with other systems they use.
One reason open-source users—especially those in small organizations who mistakenly equate “open-source” with “free”—run into integration challenges is a lack of understanding of what the task actually involves. Unless there is an application programming interface (API) available (which allows the software to be reprogrammed), it can be very difficult to come up with an affordable integration solution. And even with an API, software development know-how is crucial to set it up correctly.
If integration is a priority for you, a proprietary application is likely the better choice, since vendors typically have the resources to handle integrations (or offer them built in).
To illustrate, say you select new project management software, and decide to keep your existing best-of-breed document management system. The two systems don’t integrate—that is, they do not “talk” to each other—so you find yourself spending an extra hour every week manually syncing documents between them.
Based on a construction project manager’s median annual salary of $72,522, that’s 50 hours and at least $1,800 spent each year on a task that could be fully automated, if only the two systems were integrated. And that’s not even counting the unnecessary stress of constantly wondering whether you are using the most updated version of a document.
Brian Shoemaker, project manager for P&C Construction in Portland, Oregon, uses a popular proprietary application. Its seamless integration with accounting software is what he appreciates most, because it eliminates having to update data in two places.
“When we issue change orders, everything is updated on the accounting side simultaneously,” he says.
Proprietary Users More Likely to Recommend Current Product
Not only do proprietary software users experience fewer challenges, they are also more likely to recommend their current products to others than are free and open-source software users: 87 percent and 55 percent, respectively, say they would recommend their system.
While the percentage of free and open-source users who would recommend their product is 58 percent lower than proprietary users, a majority are still satisfied enough with the product to recommend it.
Software Product Recommendations, by License Type
This tells us that there are definitely free and open-source products that are good choices for construction companies. The key to making one work in your business is to be aware of your company’s needs and resources and determine, before implementation, how well such products will support these requirements.
For example, one anonymous survey respondent says that while he would recommend his open-source product to others, he is planning to purchase new project management software in the next 12 months to eliminate one time-consuming task: file conversion.
“Currently, the [open-source] software we are using has issues with several different file types, and can’t import several others at all. This leads to a loss in productivity when time is spent trying to convert the files into a usable format,” he says. Indeed, the construction industry uses custom digital file types, such as IFC and DXF.
One advantage proprietary products have over open-source products is a built-in, industry-specific feature set: Most can mark up plans, track accident reports, generate RFIs and integrate with popular accounting software “out of the box,” whereas open-source project management products are often generic, requiring custom development to support construction-specific processes. So if you need functionality that is unique to the industry, a product developed specifically for construction companies is a better choice.
Choose the License Type That Best Fits Your Business
It is important to understand software licensing, because the license type you choose impacts both costs and the way your company can use the software. There is no ideal license type for all users, however. The one that is best for your company depends on your requirements and resources. Buyers should consider the following:
⇒ Talent. Large construction companies with in-house IT teams typically have the resources to implement, configure and maintain an open-source system, while small companies often need to make room in the budget to outsource such tasks to a qualified consultant.
⇒ Customizations. If you have complex workflows and processes—and the budget to pay for custom development—an open-source product may be the right choice, since the code and functionality can be modified as needed. Proprietary software is typically more limited in its customization options.
⇒ Functionality. For project managers who need all the bells and whistles—such as punch lists, submittal management and drawing markups—a proprietary application is probably the better choice, because it is more likely to have industry-specific functionality built right in.
⇒ Total cost of ownership. It is a common misconception that “open-source” means “zero cost.” When you factor in implementation, customization and other costs, open-source products have costs comparable to proprietary software. Don’t choose open-source software if the only reason is to save money.
It’s clear from our survey data that most construction project management users are either completely or mostly satisfied with their software, but that none are immune to challenges—the two top challenges being integration and customization. However, these can be prevented by first understanding the advantages and disadvantages of different license types, and then determining whether your company has the resources to deal with them.
The detailed methodology for this report can be found here.
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