You wouldn’t believe how many IT companies out there still use spreadsheets to allocate people to projects and manage their financials.
The trouble is that even the smallest company out there can’t get away with using spreadsheets. They might work fine for here and now in your project, but they don’t give you a long-term view of workloads or profitability.
If you’re reading this, you’re probably ready to move beyond a simple PM tool and embrace an integrated solution that brings data about all your projects under one roof.
But how do you pick the right solution? What should you look for in project portfolio management software?
Don’t worry, I’ve got your back.
Here’s everything you need to know about project portfolio management software that IT companies like yours need to thrive.
Why use project portfolio management software in the first place?
Firstly, answer yourself these questions:
- Are your projects profitable as you expect?
- Does anyone in the team have too much on their plate?
- How looks your projects budget burnout and progress?
- Can you be relaxed about booking this new project or do you need to scramble and hire new people as fast as possible?
Answering all these questions is hard if you’re juggling several spreadsheets along with a project management tool. Getting the data you need is only going to become more and more difficult as your company grows.
Project portfolio management software can save you.
Here’s what you get by implementing a solution that matches your needs:
- Fewer meetings for discussing who is available and when,
- A single source of truth for your entire team that boosts collaboration and eliminates overbooking,
- More efficient resource management and allocation,
- Smarter project planning,
- Improved project management thanks to business intelligence insights,
- Ensuring project profitability at the level you need,
- Lower risk of double booking or overbooking resources,
- Better understanding of employee workloads thanks to allocation visualizations.
All of the above sounds great, but how much is it going to cost you?
Read the next point to see if adding this type of software to your company makes sense in terms of its ROI.
How much does project portfolio management software cost?
The cost of project portfolio management software depends on three factors:
- Number of users - some solutions charge per person or assign several users per given subscription tier.
- Features - some software might be offering more functionality for a lower price.
- Annual vs. monthly billing - depending on the form of billing you pick, you might enjoy discounts (that come usually when paying upfront for a year, instead of in monthly installments).
- Implementation costs - some software providers require initial payment for implementation process. Especially, if you have custom requirements or complicated orgnization structure where many stakeholders are involved in the process.
As you can see, in most cases the biggest cost impact has number of users and types of the features you need.
So, let's calculate the average cost of the PPM tool
I've prepared quick research based on the 18 best PPM tools on the market that shows how much it may cost you to implement it, depending on the size of your company.
As you can see specific solutions may vary a lot, and at the end of the day the most important information is that you need find process and requirements best-suited tool.
Nevertheless, you can notice that monthly costs for:
- 50 people company ~ $1 150 per month
- 200 people company ~ $4 500 per month
- 500 people company ~ $11 500 per month
Now, when we know the approximate costs, we can calculate ROI to determine whether it is financially reasonable (to convince our CFO ;)).
Read this case study and judge by yourself.
A real-life example of calculating ROI
The Australian 50 people IT services company HSD carried out projects that are long-term and multi-phase, transforming from development (billed as Time & Material) to maintenance (billed as Support or Fixed Price). This makes ensuring that a project is profitable throughout its duration really challenging.
By implementing Primetric, HSD reduced the time spent working on spreadsheets from 15 hours a week to 30 seconds.
Together with smarter planning, improved communication between different departments, and avoiding project budget burnout, this led to increased savings and earnings to over $200,000 per year.
Of course, there was an initial cost generated by the stakeholders spent on learning about Primetric, but at the end of the day it was really small, so we can skip it.
What about ROI? It makes me feel stupid to write these numbers because they sound like typical marketing gibberish, but... you can't fool life.
ROI = 2800%
If this doesn’t convince you that project portfolio management software is worth a try, I don’t know what will.
How can you tell that it’s time to get project portfolio management software?
Like I said, even a small IT company can gain a lot by implementing project portfolio management software.
Because sooner or later, there will come a time when you’ll be forced to do that. And adding a new tool under pressure isn’t the best way to go on about it.
So, how can you tell that your business could benefit a lot from a matching solution?
Here are a few telltale signs to look out for:
- You and your colleagues spend lots of time in meetings. They’re dedicated to deciding who will work on which project, when, and for how long. I bet you have better things to do with your time than manual resource allocation.
- You have no bird’s eye view of what’s happening in the company. People come to you with questions and you need to dive into your spreadsheets every time to retrieve the data you need. This is starting to take too much time, preventing you from focusing on what matters most.
- You have no business intelligence on project profitability at all. You don’t know how resources are being consumed in your project. Are you burning through the allocated time? Or is your estimate way off the mark? You can’t tell.
- You have no idea what your employee utilization rate is. Is anyone suffering from too much overtime? Before you know it, this will snowball into a bigger problem like a drop in motivation that translates into poorer outcomes.
- Nobody understands your spreadsheets. They’re too busy and non-user-friendly spreadsheets. They take forever to load. And since you’re the only one who knows how to navigate them, people bombard you with questions.
- Your team members lose time on overlapping or redundant work that comes from confusion surrounding their allocations.
If you notice that at least one of the above is true for your company, it’s high time you started looking for a project portfolio management solution. Not figuring out these problems before scaling your company is bound to make it a very painful process for everyone involved.
But which features does this software need to have to fulfill its role and really help you grow? I will talk more about these essential functions in the next point.
What should you look for in the best project portfolio management software?
Cloud-based SaaS vs. On-Premises
Many companies worry about data privacy and security in the cloud. But cloud-based solutions are still a great pick:
- They’re updated and services in real-time without any extra costs on your side,
- New features are included in the price,
- You can be sure about data backups,
- It’s fast and efficient.
On the other hand, you have on-premises solutions that ensure greater security (thanks to an owned data canter) and customization (if the vendor allows that). But on-premises software comes with a few important limitations:
- You’re the one responsible for the setup and maintenance of your servers and application,
- You don’t get automated updates (or need to pay extra for them),
- In case of a disaster, you lose business continuity.
So, if you pick a cloud-based SaaS solution, make sure that:
- It comes with great customer support,
- Works in line with regulations like GDPR,
- Allows singing DPA, SLA, and MSA for full security,
- Ensures data backups and option to export data from the system,
- Includes SSO (relevant if you use Google or Azure Active Directory services).
At Primetric, we made sure that our solution includes all of the above.
Customization, flexibility, scalability
There’s no point in investing in a solution that requires you to change the way you work. You’ve been around for a while now and have a bullet-proof process in place. That’s why the tool you pick should be flexible enough to match your needs.
For example, at Primetric we always customize our solution to the individual requirements of each client and always carry out a thorough analysis to get there. This is how we make sure that our platform is perfectly aligned with the way their business works - and can accommodate any changes as the company grows.
Integration with other systems/APIs
Let’s face it, you’re probably using a host of tools to manage your project already. Getting a project management solution that blends into your ecosystem seamlessly is a smart move. Integrations speed up the implementation process but also win you buy-in from team members who don’t have to switch to an entirely new tool.
Different access options
You’re getting a project management tool because don’t want to keep answering the same questions over and over again:
- How long will this developer work on project X?
- Will this person be available to start working on project Y in 2 weeks?
- When is project Z starting?
To solve this, you need to build a single source of truth for everyone - including project managers and all other employees. At the same time, you don’t want every little detail to be available to everyone - for example, the hourly rates of your team members. That’s why getting a tool with different access options is so important.
In Primetric, project managers can have an easy time planning and getting all the info, while developers see only their allocations and not the financial insights about project profitability.
Project planning and resource scheduling
A good project management tool should include something more than simple assignments of people to projects within specific time frames.
What you need is the ability to run simulations of different scenarios to see how your decisions will impact the project’s profitability. The best tools on the market give you the ability to forecast project realization rates, resource availability, or the project number of vacancies.
You need this long-term vision to make the smartest decisions for your business.
Reporting features are critical - how else are you going to check the health of your business?
But here’s the interesting part: reporting works best if it covers data about your projects vs. data about your people.
And by data, I mean all kinds of it - from financial data to employee utilization rates. Data visualization features speed up the process of extracting insights from data. That’s just how human brains work.
Knowing what happened in the past is important. You can learn a lot from historical data about your projects.
But we’re in the business of innovation, which means the future.
A good solution should allow you to forecast a bunch of different metrics - employee allocation, employee utilization rates, your projects’ profitability, and more.
This is how you can formulate accurate and realistic plans, so you don’t get any surprises later on.
Moreover, you can then compare plans to reality and see where your estimations went off. You’ll never make this mistake again and improve your planning capabilities.
Combining time tracking functionalities with project management is essential if you want to become better at estimating how much time a project will take and how to rate it.
The best solutions give you time tracking and timesheets, but also a dashboard where you can see predictive timesheets displaying the tasks that people should be working on.
You can also easily check the costs and revenue generated by your team members per project, client, or specific date range.
And speaking of costs...
Finally, your project portfolio management solution should let you take a deep dive into the project’s (and your business’s) financials.
By accessing this data, you’ll be able to tell whether the project is going to be profitable, by how much, and if it’s not - what you can do today to change that future outcome.
How do I choose a project portfolio management system?
1. Define your requirements
As I said before, you’re not shopping for a tool that turns your process upside down. You’re looking for a solution that blends into your business seamlessly.
For that to happen, you need to know:
- What your process looks like step by step,
- What the current problems in how your team works are,
- What is missing from your process.
You can do above by preparing list of use cases. Here you can find sample list of use cases.
When exploring the market, you can always go back to these questions and ask yourself: Does this solution solve my problems?
If the answer is no, don’t spend any more time on researching the tool (no matter how shiny its demos are). It’s just not the right pick for you.
If the answer is yes, you got yourself a potential candidate.
2. Do your homework
Once you define your needs, it’s time to check the available options.
Here are a few easy research methods:
- Ask your colleagues and friends about tools they liked using or still use,
- Talk to other project managers in the IT sector,
- Take a look at recommendations on websites dedicated to the IT industry, eg. G2.com / Capterra.com / Digital Project Manager.
3. Test it
Test out the tool for yourself. Most of the time, you’re going to get a free trial. Gather a small group of colleagues to pilot the tool together. Choose people with different working styles, you need to gather as diverse opinions as possible.
This also gives you the opportunity to test out the customer service. Implementing a new tool takes a lot of work, so the provider’s support can make all the difference.
You can also request a demo and spend time with the sales team to learn more about how they use the tool and what functionalities it has. Ask the support team a question and see how long it takes them to respond. Explore the help center and resources to see their quality.
4. Get feedback
Ask everyone who was part of the pilot for their feedback. Ask about things like:
- Did it help solve problem X?
- How much time does it take to start using the tool?
- What did they like most and least about it?
5. Get buy-in
When implementing a new solution, it’s key that you get buy-in from the people who will be using it.
You can’t just ask a dozen people to suddenly change their routines because you just got a new tool. They’re not going to be happy about that.
Openly communicate about the implementation process. Show the team why you need this solution. If you’re suffering from some of the problems I outlined above, show them how the tool helps to eliminate them. Introduce the change gradually and gently.
6. Implement it
Develop an implementation plan or your solution won’t bring you all the benefits you seek. Consider these issues when planning the rollout:
- When will you want to bring everyone on?
- Are you going to spread it out or do it all at once?
- Do your team members need training? If so, who will provide it?
- When are you going to set up the most important integrations? Who will be responsible for setting them up?
Once everything is in place, don’t forget to set a good example. Use the tool and be its advocate to encourage other project managers. Trust me, if your company experienced any of the issues I listed above, they’ll be thanking you.
7. Control and execute
Even the best tool isn’t going to help you if it’s not used on an ongoing basis. Build a simple process that makes this solution a daily support in your duties.
Finding the right project portfolio management tool that combines all the features you need doesn’t have to be hard.
If the example functionalities I mentioned resonate with you, book a demo with me and see how Primetric helps to solve the most common management problems in IT companies.