Web Project Management Software SMB Buyer Report – 2015

Every year, Software Advice is contacted by hundreds of buyers from small businesses (those with annual revenues of $100 million or less) looking for project management (PM) software. This provides us with valuable insight on what challenges these buyers face, and what features they seek in new software.

To learn more, we decided to take a closer look at the top Web project management buyer trends of 2015.  This report will help guide other small-business buyers investigating Web-based project management solutions.

Key Findings

  1. A majority of prospective software buyers (58 percent) use a single method for project management.
  2. Seventy percent of prospective buyers in our sample currently use manual methods for their project management needs.
  3. Time tracking and task management are the top-requested software capabilities; each mentioned by 60 percent of buyers.
  4. Sixty-four percent of buyers cite the need to improve organization and workflow efficiency as motivation for seeking Web-based PM software.
  5. Many more project managers (64 percent) than owners and executives (38 percent) want scheduling and deadline functionality.


Introduction

In Software Advice’s 2014 Project Management Software Small Business BuyerView, we  analyzed interactions with small-business PM software buyers and found that those with a preference for either Web-based or on-premise deployment unanimously selected the former.

This preference makes sense, given that managing projects with remote teams is an increasing reality for many companies today. And because it has the added benefit of remote accessibility, Web-based project management software usually offers greater functionality than on-premise software.

This year, we decided to focus exclusively on small-business buyers with a Web-based deployment preference to better pinpoint what their particular needs are.

Here, we analyze what tools these buyers currently use for project management, what challenges they face and which functionalities of Web-based project management software they believe will best address these challenges.

More Than Half Use a Single Method for Project Management

Project management is typically a complex undertaking with layers of variables that differ by industry, department and stakeholder. Yet when we analyze the tools buyers are currently using to manage projects, we find that most (58 percent) use a single method. The other 42 percent use multiple methods (these methods may or may not include software).

Number of Current Methods Used

Number of Current Methods Used

One interpretation of these results is that those using one method to manage projects are somewhat ill-equipped (and therefore, are looking for software to help). This interpretation is supported by the nature of the demographic itself: prospective buyers of Web-based PM software.

Mark Fromson is a Certified ScrumMaster (an agile project management designation) and digital project management consultant with Fromson Consulting. He notes that using more than one method—if integrated with the use of software—is generally beneficial.

Because project management encompasses so many disciplines and variables, many users combine PM software with other methods, including other types of best-of-breed software that have greater functional breadth and depth for a specific business process.

It isn’t uncommon, for example, to find companies using Web-based project management software that integrates with a best-of-breed accounting program.

Buyers of Web-based PM software should consider how the software will integrate with other systems they might want to continue using. The goal is to make business processes as seamless as possible, and combining tools with integration capabilities can facilitate this goal.

Over Two-Thirds of Buyers Still Use Manual Methods

In our 2014 report, we found that 42 percent of prospective buyers we spoke with were using manual methods—including whiteboards, pen and paper, email and spreadsheets—to manage projects. This year, however, that percentage increases significantly: 70 percent are currently using manual methods.

Prospective Buyers’ Current Methods

Prospective Buyers’ Current Methods

According to Kelly Bedrich, director of information technology (IT) and a certified project management professional (PMP) for nonprofit knowledge management research firm APQC, these results are not surprising.

“The bottom line is, project managers have to work at a base level,” he says. “Most people will whip out the Excel spreadsheet, and then likely transfer [it] into a project management software tool once things become more formalized.”

By “base level,” Bedrich is referring to project managers’ involvement in projects at the inception or ideation phase. At this point in the life cycle of a project, the simplest, most familiar tools are often used to capture ideas.

Fromson says that internal barriers to standardizing a PM software solution are common in businesses of all sizes, as purchasing and implementing software on a widespread basis typically requires buy-in from various departments and leadership. Debates about interdepartmental use and cost-effectiveness can stall the process.

In these cases, Fromson explains, email—which is “ubiquitous” among project managers—becomes the fallback method most use. Yet as projects grow in complexity, such basic manual methods often prove insufficient unless supplemented by the use of software.

“It’s incredibly hard to organize projects and make sure things don’t fall through the cracks unless you’re tracking [them] someplace,” Fromson says. “If a project manager is jotting something down in his notebook, then the rest of the team doesn’t have access to it.”

One of the reasons so many of those searching for project management software prefer a Web-based solution is because it is specifically equipped to handle the challenges of remote teams.

If you’re doing remote [software] development with a project team, Web-based tools are very simple tools—such that everyone throughout the country or throughout the world can log in to a central repository and know what the status of their task and project is. [These tools] also have great discussion capabilities and great task management capabilities.

Kelly Bedrich, APQC

60% Want Time Tracking and Task Management

Drilling down into what functionality most prospective buyers are looking for out of their PM software, we find that 60 percent of our sample requests some form of employee time tracking, while another 60 percent seeks task management capabilities. Project tracking functionality, which includes status updates and dashboards, is also desired by a majority of buyers (53 percent).

Top-Requested Web-Based PM Software Functionality

Top-Requested Web-Based PM Software Functionality

It’s not surprising that these capabilities are the most desired among buyers, as they can have the greatest impact on the success of a project. Employee time tracking is a crucial element of how projects are evaluated, because it is intimately tied to billing and budgeting.

“To see if a project is profitable, you have to have an accounting of people’s time,” Fromson explains.

Task management, which Fromson describes as “the core of project management,” is also critical to the success of a project because projects are made up of numerous individual tasks.

“The modern project simply has way too many elements for someone to remember,” he says. “There are way too many moving pieces.” Task management tools, however, can help users keep track of everything.

According to Bedrich, software is an excellent tool for automating simple, repeatable processes, such as task management and time tracking. Web-based software has the additional benefit of allowing remote teams to easily access and complete these processes.

64% Want to Improve Organization and Workflow Efficiency

While the buyers in our sample indicate that the challenges with their current project management methods are myriad, the most common reason they are seeking PM software is to improve organization and workflow efficiency (cited by 64 percent).

Forty percent want to improve tracking and reporting, which suggests that their current method’s analytics capabilities are insufficient.

Top Reasons for Evaluating New Software

Top Reasons for Evaluating New Software

Given that a large majority in our sample are using some form of manual method, this isn’t surprising. In fact, these pain points align with the top functionality our buyers seek: time tracking, task management and project tracking.

Effective task management is especially crucial in organizing projects and workflows. Tracking and reporting, especially as it concerns time and task status, are critical to understanding how well a project is progressing and how profitable it is.

“One of the outputs of these tools is to communicate project health,” Bedrich says, referring to tracking and reporting abilities.

These results, in conjunction with our findings on functionality, reinforce the idea that the majority of Web-based project management software buyers are looking for capabilities that solve core project management challenges.

Rather than simply seeking a system that is easier to use, these buyers want to have greater control over their projects and a better understanding of what makes their projects successful (or not).

Managers Want Task Management/Scheduling/Deadlines

In analyzing our results, we distinguished buyers identifying themselves as project managers from those identifying as owners or executives. This allows us to identify differences in preferred functionality between the two groups.

While owners/executives and project managers tend to agree on most of the functionality they seek, a much higher percentage of project managers (64 percent) than owner/executives (38 percent) want scheduling and deadline capabilities.

In fact, this is the top-requested functionality among project managers, along with task management (also sought by 64 percent).

By contrast, owners/executives cite time tracking as their top-requested capability (61 percent). While 55 percent of project managers also request time tracking functionality, a greater percentage overall seek task management and scheduling and deadline capabilities.

Top-Requested Functionality, by Job Role

Top-Requested Functionality, by Job Role

The disparity between owners/executives and project managers when it comes to scheduling can be partially explained by the fact that project managers are more involved with managing the day-to-day operations and requirements of projects, in which deadlines affect dependencies.

If certain milestones are not hit, other parts of a project may stagnate. Owners, by contrast, appear to be more concerned with cost-efficiency, for which time-tracking can provide insightful data.

Owners and executives seeking Web-based PM software are advised to communicate with their project managers before purchasing a solution. However, it’s also apparent from these results that not all owners/executives and project managers desire the same capabilities.

Making sure that a solution can perform all of the functions different team members will need it to can help avoid shortcomings and challenges down the road.

Conclusions

As more small businesses adjust to an increasingly remote workforce, leaders of these organizations recognize the need for software that can facilitate productivity while helping them manage disparate teams. Computer engineering and science, specifically, experienced a 71 percent increase in employees working from home between 2000 and 2010.

According to Fromson, Web-based project management tools have the advantage of “synchronization, multiple users and backup,” making them particularly well-suited for remote project work.

For those buyers considering Web-based project management software, time-tracking and task management functionalities are top priorities. For project managers specifically, scheduling and deadlines and task management functionalities are the most necessary.

Other prospective buyers seeking this software should note that the most desired capabilities, regardless of job title, all involve managing time and tasks. After all, these tools represent the unique advantages of Web-based PM systems: They allow users to more easily manage complex interactions and to seamlessly collaborate on projects from anywhere in the world.

Demographics

Of the prospective buyers in our sample, most are in a leadership position. A combined 54 percent are in the upper echelons of management, including owners or principals, C-suite executives, presidents and vice presidents and directors and senior managers.

We isolated our sample to include only buyers from small businesses (those with $100 million or less in annual revenue). One-quarter of buyers say their industry is “technology,” which is inclusive of IT and software development.

By Role: Prospective Buyers
By Industry: Prospective Buyers
By Number of Employees: Prospective Buyer Size
By Annual Revenue: Prospective Buyer Size

Methodology
Our advisors regularly speak with buyers who contact Software Advice seeking new Web-based project management software. To create this report, we randomly selected 387 of our advisors’ phone interactions with small business buyers (from companies with annual revenues of $100 million or less) from the U.S. during 2014 to analyze. The data presented was collected from those interactions for business purposes rather than for market research.

These findings exclusively represent those buyers who contacted Software Advice for guidance on software selection, and may not be indicative of the market as a whole. Expert commentary solely represents the views of the individual. Chart values are rounded to the nearest whole number.

If you have comments or would like to obtain access to any of the charts above, please contact johnleslie@softwareadvice.com.

 

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