Most Small to Midsize Businesses Are Still Not Using PM Software

Laurentiu Bancu

Written by

Laurentiu Bancu

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4 minutes

That’s the key finding of a recent report released by research and reviews firm Software Advice. The company receives hundreds of project management software consultation requests annually and has selected for this study a random sample of recent consultations to learn more about SMB buyers searching for cloud-based PM solutions. In this context PM software acquisition remains a top business priority.

Important Findings

  • The majority of SMB buyers (60%) are looking to purchase PM software for the first time, a trend that has remained the same since 2014.
  • The two most-requested software tools are task management (70%) and reporting (49%) — a split between basic and advanced functionality.
  • First-time buyers cite the need to automate processes (30%) as their main purchase driver, while most repeat buyers want to improve ease of use (32%).

The majority of Prospective Buyers Aren’t Using PM Software

Just one-third of the buyers in this year’s sample (35%, combined) are currently using project management software to manage their projects. On the other hand, a combined 60% are still using manual methods (pen and paper, email or spreadsheets), non-PM software (Microsoft Office or Google Apps), or nothing at all.

prospective buyers’ current methods
Current methods

The rough one-third/two-third split between buyers replacing software and purchasing it for the first time is a consistent trend across the annual PM buyer reports:

In 2014, 35% were looking to replace their existing system, versus a combined 61% who were using manual methods and/or non-PM software.
In 2015, 32% were using PM software, while 70% of the buyers sampled were using manual methods.

This is an indicator that first-time buyers remain the largest demographic in the PM marketplace, as SMBs continue to find manual methods and non-specialized software insufficient for managing projects.

Cory Chaplin, the director in the Technology Integration practice at West Monroe Partners, says businesses often use Microsoft Excel to manage projects when the complexity and number of projects are low, eventually making the jump to PM software as both increase.

What’s more, Chaplin notes, the shift to specialized software can be triggered by the growth of the team. Managers of larger teams must manage resources more effectively—especially when teams are geographically distributed.

Kurt Schmidt, the director of project management at The Nerdery, notes that as teams grow and advance in PM maturity, they require software that provides the necessary structure to scale management processes across an organization.

Buyers Request PM Platforms With Well-Rounded Functionality

top-requested PM software functionality
top requested pm funcionality

Task management is considered a basic software capability because it deals with the day-to-day management of work items. The same is true for time tracking, which allows managers to assign tasks for the immediate future and measure the time it takes to complete them. In addition to timekeeping, invoicing software with late fees and such features are best for small and medium-sized businesses in comparison to enterprises, which could afford pricier accounting services.

As teams mature in their PM methods, they require more advanced functionality that allows them to forecast farther into the future.

Automation and Standardization top priority for PM software acquisition

The top purchase drivers for first-time buyers include the needs to:

  • Automate processes and reduce errors (30%)
  • Standardize processes and workflows (26%)
  • Increase visibility and accountability among team members (23%)

top reasons for evaluating PM software for the first time
first time PM buyers

These pain points are not uncommon for first-time buyers — especially for those using manual methods. Many businesses that start out using spreadsheets, for example, eventually run into version-control issues or errors due to manual data entry.

Manually managing everything in Excel is virtually impossible, because [users] can’t be simultaneously logged on and making data changes. – ANONYMOUS FIRST-TIME PM SOFTWARE BUYER

Excel can’t manage any actual deliverables or tasks. Employees have to manually email out project schedule updates, which is incredibly time-consuming. – ANONYMOUS FIRST-TIME PM SOFTWARE BUYER

These types of issues can be further compounded when processes and workflows aren’t standardized across a group. For example, if different teams update task status notes at different times of day, it can be hard for managers to accurately gauge project progress.

Cloud-based PM systems can help solve these problems for businesses by automating daily task management, resource management, and scheduling.

Cloud systems automatically update in real-time, as progress is made on tasks or changes are made to a project schedule. Even better, the platform itself serves as a standardized, structured work environment for users.

NOTE: If you’re looking for a professional resource distribution tool for your team, check out this top resource management software.

Improve Ease of Use Is Top Driver for Replacing Software

top reasons for replacing software
replacing PM software

The findings reflect the fact that purchasing software is typically the easy part. Implementing the system and training employees to use it are areas where businesses tend to run into problems or if end users don’t find the new software user-friendly enough, they won’t use it.

One way to combat this issue is to trial potential products. Most vendors offer product demos or free trial periods where businesses can vet products before they buy.


Based on the results of this research, prospective buyers of cloud-based PM software should evaluate their organization’s PM maturity and plans for growth before investing in new solutions.

This will help buyers assess what their needs will be in the years to come, and whether they’ll require software with more advanced functionality to support those needs.

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