Some things just gather momentum. The legendary reputation of the tough guy’s tough guy, Chuck Norris, that self-perpetuating boulder from Indiana Jones Raiders of the Lost Ark, and the mushrooming growth in Project Management and Project Portfolio Management (PPM).
According to Harvard University and MIT founded education broker, edx.org, the Project Management job sector is growing at a staggering 1.5 million additional positions per year. Defined by the Project Management Institute as a “centralized management of one or more portfolios that enable executive management to meet organizational goals and objectives through efficient decision making on portfolios, projects, programs and operations”, the global PPM market is set to grow at a Compound Annual Growth Rate (CAGR) of 13.46% between 2016 and 2020 (Wise Guy Reports, Project Portfolio Management and Analytics 2017 Global Market Opportunities, Challenges, Strategies & Forecasts 2022). Or, as Ishmeet Kaur, Lead Enterprise Application Research Analyst at technology advisory firm, Technavio, put it: “PPM software helps in analyzing and surveying the type and number of projects that are undertaken by an organization. It can also verify the usage of these resources”.
So what is the reason for this modern-day corporate phenomena? Why has Project Management and PPM become such a critical aspect of an organization?
10 factors driving the growth and importance of Project Management and PPM
1. Increased usage of Project Management and PPM tools
It’s a classic case of ‘chicken or the egg’, but the growth in the global PPM software market is both a driver and facilitator. Whatever the case, demand and need for solutions, to support increasingly complex and numerous projects and project requirements, has spurred software sales. Technavio expects the global PPM software market to grow at a CAGR of over 12 percent from 2017 – 2021. In fact, in its Global Project Portfolio Management Software Market 2017 – 2021 report, Technavio forecasts the market to exceed US$ 5.01 billion by 2021. While that’s big money and big numbers, what’s actually pushing growth in software sales?
2. Increased workforce supply and demand for Project Managers
Again, whether software growth is driving employment opportunities, or vice versa, what’s clear is that there’s increasing workforce supply and demand when it comes to Project Management. A recent survey of over 7000 technology professionals by training provider Simplilearn, titled In Demand Tech Skills for 2017, revealed Project Management as this year’s number one desired tech skill. And, employers are thinking similarly. Computerworld’s Tech Forecast 2017 report surveyed 196 technology professionals regarding their IT priorities for 2017. Project Management was firmly entrenched inside the top ten “most sought-after skills”, with some 25 percent of survey respondents who had hiring plans intending to employ more people with Project Management competencies within the next 12 months. So what other factors are driving demand for more Project Managers, and Project Management software?
3. Widespread adoption of cloud-based PPM software
Cloud computing is one of the most significant technological innovations to hit the industry over the last decade, reshaping the enterprise IT landscape in an unprecedented manner.
The cloud has also helped drive growth in PPM software, with cost savings, easy scalability and high availability being some of the main drivers for its widespread use. This trend has been amplified and accelerated with increased adoption and demand for SaaS-based delivery models that push software licensing costs into operational budgets.
“A SaaS model allows the company to use PPM software for a desired duration,” said Technavio’s Ishmeet Kaur. “They can decide to either carry forward the same requirements or choose to purchase more services through the SaaS model. This model reduces the financial implications for an organization. It offers the flexibility to change the service within a shorter duration compared to the on-premises model.”
4. The globalization of workplaces and geographically dispersed teams
Gone are the days when a typical project team needed to be in the same physical location for a project to be effective. In modern day Project Management you may never even meet some of your team face-to-face. Irrespective of how organized you think you are as a project manager, effectively managing a project team spread over different locations presents big challenges.
Implementing an effective Project Management or PPM platform provides a shared, single space for members of a team to quickly collaborate and ensure a shared outcome. Collaborative Project Management also helps in achieving real-time project visibility, mitigating any possible issues.
5. Increasingly complex products, services and business processes
In today’s highly competitive business environment, organizations have become more complex than ever. They strive to differentiate product and service offerings from their competition wherever possible in order to meet (and drive) increasingly niche market demands and target audiences. Additionally, the rapid advancement and integration of technology into every facet of an organization’s operations has also added to this convolution. In short, it’s not just the products and services themselves that have become increasingly complex, but the business processes required to deliver them too.
In an environment such as this, an effective PPM process can organize the chaos, enabling companies to actually deliver and successfully differentiate products and services in increasingly nuanced ways.
6. Increasing competition
Aside from the battle to hyper differentiate outlined above, increasing competition has led many organizations to seek out efficiency gains relating to people, processes and production; take on multiple projects simultaneously; and try to deliver better products and services in less time.
Organizations are increasingly turning to PPM platforms to achieve those outcomes, able to streamline or eliminate unnecessary steps and processes, manage and allocate resources across multiple projects, and quantify the minimum time and resources required to deliver high quality products and services.
To underscore the benefits of PPM, PMI.org found that high-performing organizations – that used proper Project Management software and processes to deliver projects – successfully completed 89 percent of projects, compared just 36 percent for laggard organizations. With figures like that, it’s no wonder that research from PricewaterhouseCoopers found that 97 percent of organization believe Project Management is “critical to business performance and organizational success”. Similarly, 90 percent of senior executives surveyed in the Economist Intelligence Units’ global survey, The link between project management excellence and long-terms success, said employing Project Management methods was ‘critical’ or ‘somewhat important’ for remaining competitive and delivering successful projects.
7. Demand for fact-based decision-making to increase project ROI
Successful decision-making revolves around project teams carefully analyzing the merits and demerits of each project. It also involves the availability of accurate data and information. PPM solutions offer the ability to analyze and report on project performance, thus enabling project managers to make informed fact-based decisions. Companies without a proper PPM process expose themselves to making costly subjective decisions that delay or destroy ROI.As Harjit Singh wrote in his paper, Introduction to Project Management Analytics: A Data-Driven Approach to Making Rational and Effective Project Decisions, effective Project Management “entails operative management of uncertainty on the project. This requires the project managers today to use analytical techniques to monitor and control the uncertainty as well as to estimate project schedule and cost more accurately with analytics-driven prediction.
“Analytics-based project metrics can essentially enable the project managers to measure, observe, and analyze project performance objectively and make rational project decisions with analytical certainty rather than making vague decisions with subjective uncertainty.”
To put that in perspective, the Project Management Institute’s 2016 Pulse of the Profession report found that for every US$1 billion invested, organizations wasted US$122 million due to poor project performance. “More critical is the money that continues to be wasted when projects aren’t managed well,” stated the report. “We see US$122 million wasted for every US$1 billion invested due to poor project performance, a 12 percent increase over last year.”
8. Maximizing existing resources
“Resource allocation is an attempt to find the shortest possible critical path based upon the available or fixed resource.” – PMBOK Guide 5th Edition.
Increasing amounts of technological innovation and automation are being introduced into business processes and operations throughout the global and across all major industries. Why? To maximize existing resources – to do more with less.
The collective manner in which decisions are made in the PPM process means that PPM software has a critical role to play in increasing human resource utilization and performance.
In the Center for Business Practices report, Measures of Project Management Performance and Value, ‘resource utilization’ was identified as the third most critical Project Management cost measure (4.2), narrowly sitting behind ‘product cost variance to plan’ (4.4) and ‘efficiency of delivery’ (4.6). Because modern Project Management and PPM software empowers users to implement, monitor and act on such fundamental cost measures, it provides the ideal platform for managing resource utilization across multiple facets of an organization.
9. Cost Management
“The most dangerous kind of waste is the waste we do not recognize” – Shigeo Shingo
Cost management is one of the Project Manager’s main operational functions with a direct bearing on the overall success of the project. With cost management playing such a critical role in all aspects of the project life cycle, it’s no wonder that many ‘bottom-line conscious’ organizational heads turning to PPM software for help.
Business Consultant Marina Martin, in her piece for Business Efficiency for Dummies, stated that “Inefficiencies cost many organisations as much as 20 to 30 percent of their revenue each year. Imagine what your company could do it if had 20 percent extra funds to funnel into customer acquisition or research and development?”
Indeed, because an efficient PPM process can help identify those inefficiencies and better channel expenses, it’s no surprise that thirst for superior cost management is driving the global PPM software market.
10. Mitigating risks
Many organizations, across most major industries, are now operating in increasingly aggressive and litigious environments. Every project has some type of risk associated with it. But good PPM processes and solutions enable the careful identification, categorization and treatment of project risks.
Scott Berinato, in his article The Role of Risk Analysis in Project Portfolio Management, stated that “risk analysis is as essential to real portfolio management as a processor is to a computer. Without it, portfolio management is simply a way to organize the view of projects that will almost certainly fail.”
Where to next?
With many corporates successfully adopting PPM strategies, isn’t it time you also joined the PPM software bandwagon? And while you’re out there looking for options, why not check out a tried and tested tool to help you in your PPM process?
CAMMS is a global Enterprise Performance Management (EPM) software company dedicated to transforming organizational strategy into reality. CAMMS offers the world’s only true end-to-end, fully integrated, EPM platform.
Able to be used independently, or as part of a complete EPM platform, CAMMS is a world leader in planning and strategy, project, risk and meeting management software, as well as budgeting, workforce and analytics solutions.
Founded in 1996, CAMMS has tens of thousands of users across five continents, with offices in the UK, North America, Australia, New Zealand and Asia. For more information, visit www.cammsgroup.com