Why Do SME Hesitate to Buy PM Software?
Successful Project Management Leads to Business Success
The commercial success of a company depends strongly on successful project management in the company and on the use of suitable project management software. The benefits of such software are obvious to most companies: transparency in projects, fluent communication in project teams, overview of all available company resources. So why is it that particularly German SME hesitate to buy PM software?
Study: PM Software in Germany
It is remarkable that many companies do not put their findings on the benefits of project management software into practice: Excel and Outlook are still used for project management by 54 % of the companies. These figures stem from the Capterra study** which analyses the use of project management software in small and medium-sized enterprises in Germany. The study indicates German market trends and identifies areas in which companies could substantially increase their efficiency in order to have more success with their projects.
Highlights of the Study
Half of the companies are willing to invest in new project management software.
54% of German SME do not use project management software (only Microsoft Excel and Outlook) and process many tasks manually
Just under 60% are willing to pay a higher price for software made in Germany and for data protection in line with German legislation.
Why do many companies still have a hard time to take a step towards project management software? Before purchasing suitable software, the PM processes in the company must be firmly established and there must be clarity about what type of software should be used: agil, traditional or with hybrid beides – whether in the cloud or on-premises, etc. The company must identify the features it needs for efficient project management. Then the company must single out the providers from the huge PM software market which have suitable offers for them, and subsequently do a close examination and a testing phase. For the selection process alone, the company already requires resources and it does not come as a surprise that sometimes these processes are suspended or not even undertaken in the first place.
Making False Economy
However, 54% of those German companies that procrastinate their software implementation should be aware that eventually they make false economies when they decide not to purchase PM software. For projects must usually be realized with limited budget and defined end date, moreover company resources (employees, teams, machines, or skill-based) are usually employed simultaneously in various projects and these challenges cannot be met efficiently without suitable software support. Here, a reliable software for resource planning is necessary. The coordination of parallel running or complex projects without suitable software does not only put at risk the quality and the delivery periods confirmed to the internal/external customer who is waiting for the project result, but it will also result in a waste of resources which could be employed more efficiently if the company had a better overview of their utilization. A good resource management software will indicate bottlenecks in resources throughout all projects already at the planning stage.
Last but not least, an efficient software can spare the nerves of all persons involved in the project, prevent double data collection and help you to establish good communication and efficient processes around your projects. The problem of insufficient communication alone accounts for one third of all failed projects.*
But who said that one necessarily has to spend months drafting catalogs of requirements and that software implementation has to drag on for years? A small team of employees that is familiar with the company’s processes and knows what requirements the software must meet for successful operation can separate the wheat from the chaff on the vast software market. Why not have a team start out with a test version in order to identify the advantages of a project planned with the new software? A good software company will advise you fairly and enable a successive implementation of the new software in the different areas of application/departments. Ideally, the product in your shortlist is close enough to the standard so that it can be implemented swiftly but also provides enough flexibility that allows for company processes to be mapped and adjusted at a later point.
Cloud or On-Premises
Nowadays there are numerous collaboration tools, some of them have PM features which are made available by cloud providers as standard solutions. Such solutions are suitable for many small companies or small teams in larger companies, which are allowed to install and use their tools without any management decision being required. These tools can usually be implemented quite fast and are often free for small numbers of users. German companies hesitate here as well: only 17% of the study participants surveyed by Gartner use cloud software.
Options for individualization and mapping of company processes in the software are rather offered by software providers of on-premises solutions, which is why they are preferred by 59% of German companies. Some software products on the market offer standard templates for mapping company processes (in compliance with DIN, PMI, PRINCE2, etc.). This streamlines the implementation process of the PM software.
If German companies hesitate to employ cloud solutions, this is not least due to concerns about data security. 55% of the respondents stated that they only want to use software which is either made in Germany or which comes with data protection standards comparable to those applicable in Germany.
Good to know: browser-based solutions are not necessarily cloud solutions. In browser-based solutions, the software is installed centrally on a server and can be accessed quickly via the browser. However, the server can indeed be located on the company’s site… or at the software manufacturer’s site… or even at the site of a provider – which would make it a cloud solution.
All Agile?
In fact, the importance of agile PM methods has increased for companies worldwide: 71% of the participants of the international PMI survey* state that they use these methods with more or less frequency. Therefore, there are fewer projects with run times of several years, since in this fast-paced world, agile projects are better suited for reacting to current situations and requirements. This is not yet reflected in the German market: only 2% of the respondents of the Gartner study on PM software in Germany stated that they mainly use agile methods. This is not much, although it is clear that agile methods are not suitable in all areas of project management.
Agile methods are especially suited for reacting quickly to new requirements, for keeping communication in the project team as fluid as possible, and for structuring todo item packets as flexibly as possible.
Not everything can be planned agilely. The management wants to get an overview of risks and opportunities of all company projects, and quickly wants to identify the status of all projects as well as possible delays since the project start. For such monitoring in multi-project management, traditional PM software is best suited. Ideally, both methods are combined in one system, then multi-project features can also be used for agile (sub)projects.
Last but not Least: Management
Whether software is applied in project management or not depends first of all on the management and on the respective branch. In the internet sector, e.g., 67% of the companies use software, 70% of the banks report that they use software, whereas only 35% of the companies in the healthcare sector and 28% of the companies in the consumer goods sector use software.**
If the benefits of tool support in project management is to have an impact on business success, you will necessarily require a professional software solution which helps you not to get lost in a maze of tools used in individual teams. Supposedly free tools can affect the efficiency of the company as a whole. The management must make the decision for a comprehensive digitalization and it must support the process once it is on its way.
Checklist: Good PM Software
- can swiftly be implemented in its standard version
- is flexible enough to allow both new processes in the company and new reports to be adjusted even after implementation
- grows with the company, can be extended when the company/project scopes become larger
- helps to identify risks and opportunities in projects and to react to new project situations (changes in requirements, loss of resources) in good time
- facilitates communication among all persons involved in the project without the usual e‑mail flood
- everyday project activities: a common and always up-to-date data basis for all projects facilitates future project planning
- enables agile, traditional and hybrid procedures in project planning just as the respective project demands
Sources
** International Project Management Survey Germany, Capterra – a Gartner company
