2017 is going to be a year of digital transformation.
International Data Corporation (IDC) expects that the percentage of enterprises creating advanced digital transformation initiatives will more than double over the next five years, from today’s 22% to almost 50%.
This will lead to the emergence of a “DX economy” by early next decade. In its worldwide information technology (IT) industry predictions for 2016 and beyond, IDC says that enterprise spending on cloud services and ancillaries will exceed $500 billion, more than three times what it is today.
This digital transformation has already forced enterprises to move on from traditional project portfolio management software and practices and to adapt to the wave of disruption led by the advent of cloud-based tools, visual and social project management, and collaboration technology. The rapid advances in Internet of Things (IoT) and AI technology have led to a huge shift in the nature of projects themselves, pushing organizations to think differently about project portfolio management (PPM).
In this article, I attempt to predict how PPM will evolve over the next five years. Here are four key themes that I expect will dominate PPM by early next decade.
1: Adoption of OpenStack (private cloud) technologies will give rise to a new breed of deployment (“on-premise-on-the-cloud”) for project management solutions
Software as a Service (SaaS) has already changed the nature of enterprise software by cutting down infrastructure costs, shortening implementation time, and providing anytime-anywhere access.
With enterprises looking at digital transformation not only as a revenue stream but also as a means of transforming the way they run their business, private cloud deployment is gaining popularity.
Open-source technologies such as OpenStack give enterprises a lot of flexibility, control, and scalability. For example, OpenStack can handle various levels of computing, can be licensed easily, works with standard hardware, has a massive global community, and offers detailed documentation and a huge marketplace for products and services.
For enterprises, it brings IT control back within the business, without the traditional hassles of implementation and costs involved.
This new breed of deployment gives enterprises the best of both worlds: cloud-based access to private data. The on-premise-on-private-cloud will, therefore, see increasing demand.
Software providers have already started gearing up for the demand, and, over the next few years, on-premise-on-the-cloud is slated to become the preferred option for businesses globally.
2: Emerging economies will drive the next wave of growth for PPM software
The PPM market size is expected to grow from $2.52 billion in 2015 to $4.63 billion over the next five years, at a compound annual growth rate of 12.9%. The rising BYOD trend among businesses, increasing business optimization needs, the inclination towards cloud-based software solutions, and rising complexities within projects are driving the PPM market.
North America and Europe, both mature markets, will continue to dominate PPM software market growth (into early next decade), but I expect that there will be increased traction in some of the developing regions, especially from the BRIC nations and countries like Indonesia (infra projects), Chile (mining projects), Turkey (manufacturing/infra projects), and Vietnam (manufacturing projects).
An important point to note is that, while emerging economies will drive more growth, PPM adoption does not necessarily have a direct relation to economic factors. It can be seen as more of an evolutionary aspect that companies will look to get in and derive value out of.
3: Adoption may still be a challenge that software providers will need to address
Enterprises typically deal with large-scale and long-term projects of higher complexity, making PPM a huge priority for them.
Scale and complexity of projects drive the need for PPM, and therefore enterprises have been the biggest buyers of PPM software. Over the last few years, that narrative has changed significantly, with SMBs increasingly recognizing the need for software that can facilitate productivity while helping them manage disparate teams.
However, statistics suggest that PPM adoption is still poor across the board, but that’s a limited view because SMBs are still very new to the game.
Even during recessions, portfolio management matters more as it helps you zero-in on the projects that are most worth your effort and scant budget dollars.
Portfolio management requires a disciplined approach. where organizations that start early will see real value grow over time, which will fuel overall growth. I predict that adoption rates, though low today, will grow significantly over the next five years.
For me, past performance is a good indication of future results—I expect this market to grow 15% to 18%. I am being highly optimistic here, but I am sure businesses will need to be optimistic and aggressive about their growth and embrace PPM solutions.
4: The Rise of all-in-one PPM tools in SMBs
According to a 2016 Software Advice report, more than 60% of SMBs still use multiple PM tools or a combination of tools and manual methods for project and portfolio management. Around 8% are using non-PM software like CRM tools to manage projects.
Using the wrong project management tools is a huge deterrent when it comes to extracting RoI from project management investments.
Fortunately, the trend is changing and SMBs are now warming up to a more structured project management approach by investing in all-in-one PM tools. PPM is the most preferred feature demanded by buyers.
All-in-one PPM systems help streamline project management efforts and processes by consolidating planning, tracking, reporting, and analysis on a single platform, and by integrating key functions like marketing, sales, HR, and finance with project management.
We will see early 2020s how all-in-one solutions will outperform best-in-class breeds as both SMBs and enterprises will shift to using well-rounded and comprehensive all-in-one platforms for their PPM challenges.
Final Project Portfolio Management Predictions
Apart from enabling new revenue channels, digital transformation is going drive organizations to rethink processes, technology, skillsets, and organization structures.
Project Management, as an organization-wide discipline, will need to cope with digital transformation driven evolution. Software providers need to cater to these demands and ensure they are keeping up with the pace of industry-wide digital transformation.
What trends do you think will take place in the PPM market by 2022? What do you think I got right? Wrong? Let me know in the comments below!
And if you want to learn more about where the project management industry is headed, check out these articles:
- I, Project Manager: The Rise of Artificial Intelligence in the Workplace
- The 5 Biggest Project Management Trends Shaping 2017
- Business Agile and the Future of Project Management
Looking for Project Management software? Check out Capterra's list of the best Project Management software solutions.