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The global project portfolio management (PPM) market size was USD 3.49 billion in 2019 and is projected to reach USD 5.74 billion by 2027, expected to grow at a CAGR of 6.5% during the forecast period.
Project portfolio management is vital to a successful business development process. According to the survey conducted by the Project Management Institute in February 2018, about USD 1 million worth of revenue is wasted every 20 seconds collectively by enterprises due to the poor project management practices and inefficient implementation of business strategy. Project portfolio management software can manage and align entire project activities. The system provides valuable insights through interactive dashboards to ensure that the number of projects chosen and completed meets organizational goals. Thus, this software is gaining much popularity across all industries as it helps organizations to meet their strategic business goals.
The increasing need to gain a 360-degree view of the entire project lifecycle is driving the demand for PPM solutions. The adoption of cloud-based services for remote monitoring of the project activities is likely to increase the PPM market growth.
The trend of digitization, remote working, and automation across various industries such as government, engineering, construction, healthcare, BFSI, IT, and telecommunication is further accelerating the global market growth. The volatile and hypercompetitive business environment is enabling small vendors to adopt project portfolio management systems for fast and better decision making. The software-as-a-service PPM (SaaS-PPM) can be integrated with existing business process management systems to offer enhanced functionalities in a single solution. Thus, SaaS-PPM solutions are showcasing significant contributions to its adoption. Moreover, cumulative coordination of PPM with the application lifecycle management systems is likely to boost the growth of the market.
Increasing Need to Monitor Vital Business and Resource Activities Remotely amid COVID-19 to Favor Growth
The COVID-19 pandemic has transformed the operational activities of all the businesses. On-desk business activities and projects are significantly shifting towards the remote working environment. The project managers have started reassessing their existing projects and portfolio management systems. Thus, the global pandemic has become a most challenging time for the market to grow.
The pandemic norms, such as lockdown and social distancing imposed by the government, emphasize the need to experiment with remote working without any initial arrangements. According to the Mercer pulse survey conducted in March 2020, only 22% of global companies were ready for remote working before the COVID-19 pandemic. The survey also revealed that, until March, 37% of companies implemented obligatory work from home (WFH) practices, and an additional 17% are expected to work remotely for the specific departments. Large enterprises are facing challenges while dealing with large projects, programs, or portfolios. Thus, the increasing need to monitor the vital business and resource activities remotely is likely to drive the demand for real-time project and portfolio monitoring dashboards.
As the businesses are preparing to respond to the global pandemic, tactical priorities have changed drastically. Some projects have paused, some stopped, some accelerated, and some adapted. New financial constraints, workforce redeployment, and revised corporate focus are enforcing companies to reassess their project portfolios. Key players are offering PPM solutions that provide 360-degree analysis of import and export control, supply chain, resources, and all business activities. These offerings are enticing organizations to deploy project portfolio management solutions to sustain their business competence. Thus, the COVID-19 pandemic is laying the groundwork for future market growth.
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Increasing Adoption of Agile Practices in Businesses to Stimulate Market Growth
The increasing project complexities have led the companies to reassess the entire project management practices. In today’s fast-paced environment, the waterfall-type traditional projects would not always lead to the optimum response to manage costs, facilities, activities, and resourcing. Thus, companies are undergoing business transformations by moving their internal organizational operations to the agile business model. The agile business model has risen to be one of the most popular approaches of the PPM system as it provides highly collaborative and cross-functional project management.
The concept of a scaled agile framework (SAFe) is gaining popularity across the PPM industry. This framework provides a set of workflow patterns that aims to guide organizations in scaling agile and lean business practices. This practice supports enterprises of any size for sustaining their competence even during the most volatile business environment. Thus, numerous organizations have inclined their approach towards the agile project and portfolio management framework. Agile practices can firmly align with the ever-changing business needs of the dynamic digital marketplace. Thus, increasing agile practices are driving the demand for the market.
Growing Popularity of Cloud-Based Management Software to Fuel Market Demand
The major forces driving the PPM system adoption include business optimization needs, extensive penetration of portable computing devices, and the rising acceptance of cloud-based solutions. Organizations are seeking project portfolio management solutions and services that deliver real-time project updates for the efficient accomplishment of projects. The emergence of cloud-based PPM solutions is accelerating the demand for remote portfolio management systems.
The subscription-based purchasing model is escalating demand for cloud PPM among small and medium enterprises that have constraints in accepting expensive solutions. Besides, cloud-based systems are becoming popular each day among organizations owing to their flexible, scalable, and affordable architecture. Moreover, the ability of cloud-based systems to align corporate operations and business strategies is another key factor that drives system adoption. In September 2020, the United Kingdom Crown Commercial Service (CCS) selected Bubble Ltd cloud-based PPM solution for aligning its public sector operations.
Increasing Adoption of Artificial Intelligence to Drive Automation in Project Management
Organizations are looking for a system that can offer adaptive operational planning, streamlined communication, and rapid execution features or functions. Apart from this, enterprises have started demanding adaptable PPM practices that can evolve flexibly with ever-changing business priorities. Presently, PPM leaders are putting efforts to optimize the PPM role as per organization demand by using modern technologies. Applying artificial intelligence (AI) to the PPM appears to be the answer to these efforts.
AI is expected to be the next logical step to drive automation in project management and speed up the delivery. Project portfolio managers can leverage this technology to attain their business goals. Many organizations have started to develop artificial intelligence-based project portfolio management systems. For instance, in 2019, Planisware S.A.S announced the launch of an AI-enabled PPM solution to provide effective and efficient project management.
Lack of Awareness and Limited Skilled Workforce to Restrain Market Growth
Project portfolio management platforms are gaining popularity across the IT sector. However, many small and medium enterprises are still unaware of the advantageous features of PPM. Numerous organizations are not aware of the role of portfolio management practices in businesses. Apart from this, lack of skilled expertise led to inappropriate selection and utilization of PPM solutions, which further hinders the system adoption.
Software Segment to Hold Major Market Share
Based on the component, the market has been bifurcated into software and services.
Among these, the software segment is likely to hold the largest market share owing to the high adoption of PPM solutions by IT vendors. The cloud-based PPM software is experiencing huge demand across industries. Additional functionalities with flexible pricing packages are further escalating the demand for cloud PPM software.
The services segment is further classified as integration & deployment, training & consulting, and support & maintenance. Increasing demand for customization of portfolio programs is the key factor that drives integration and deployment services. Program mobilization, agile transformation, and program recovery are promoting the demand for deployment services. The training and consulting service would likely to grow owing to the need for understanding the appropriate usage of advanced portfolio management systems. Support and maintenance services would further showcase significant contribution to PPM services.
Flexibility and Scalability Features of SaaS Model to Drive Cloud-based PPM System Demand
Based on the type of deployment, the market has been segmented into on premise, cloud, and hosted deployment.
The cloud deployment segment is likely to exhibit the highest CAGR during the forecast period owing to the growing popularity of software as a service (SaaS) PPM system.
The cloud-based PPM model offers flexible pricing models, maintenance packages, easy upgradation, and easy accessibility that are expected to drive significant demand for cloud-based project portfolio management software. Also, robust scalability, flexibility, and affordable prices are driving the demand for cloud-based PPM solutions. SaaS is easy and fast to implement with a hosted deployment model.
The hosted service model is becoming preferable day by day due to its advantageous factors such as improved uptime, reliability, technical support, and reduced cost. Thus, the hosted deployment segment is likely to experience considerable growth during the forecast period.
On-premise PPM software can be easily integrated into in-house applications. It is easily controllable through the in-house servers. Also, secure and robust data control abilities of the on-premise deployment are expected to drive the adoption during the forecast period.
Large Businesses to Hold Major Market Share Owing to Need for Managing Large, Distinct, and Complex Workflows
By enterprise size, the global market has been segmented into large enterprises, and small and medium enterprises (SMEs).
The adoption of PPM software in large enterprises is relatively higher than in small and medium enterprises. The growing popularity of project management offices (PMOs) among large firms is the key factor that accelerates the adoption of project portfolio management. Undertaking multiple projects for sustaining business competence is enticing large enterprises to adopt advanced PPM solutions. Also, complex workflows, a large number of resources, and the increasing competition entice large organizations to deploy a centralized portfolio management platform. Thus, the growing need to manage business portfolios to achieve high growth is likely to drive the market across large enterprises.
Technology acceptance driven by digitization is enticing small and medium enterprises to adopt modern business agility solutions. Besides, flexible and affordable subscription packages by the cloud-based PM system are encouraging the adoption of PPM across SMEs.
Dynamically Changing Business Portfolios to Escalate the Demand for Project Management Tools
By application, the market has been classified into project management, portfolio management, demand management, resource management, financial management, and others.
Project or program management implements controls on progress, scope, financial, and quality delivery of projects. Organizations are progressively incorporating a new set of tools for effective project management. The growing need to assess the performance of active programs or projects continuously against the defined criteria is fueling the project portfolio management demand.
The superlative portfolio management tool offers prioritization of the project activities in accordance with the changing business needs and priorities. Today’s fast-paced business infrastructure is expecting a system for managing a dynamic business portfolio. Effective portfolio management is essential for sustaining business agility in a dynamically changing environment. Thus, the project and portfolio management applications hold a major market share.
Resource management and demand management are key factors responsible for driving the overall market growth. The efficient utilization of resources during their active work hours helps businesses to achieve their daily targets and business goals. Selecting the right project is the key aspect that would drive business success.
Demand management plays a crucial role in analyzing, prioritizing, and selecting the right project. Thus, the demand for operations and resource management applications are expected to bode well for market growth.
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IT and Telecommunication Industry to Hold Significant Market Share Owing to Increasing Demand for Project Management Offices (PMOs)
By vertical, the market has been classified into BFSI, IT and telecommunication, healthcare, government, engineering and construction, and others.
The growing outsourcing activities and multiregional operations are increasing complexities in banking operations that would drive the PPM adoption across the banking industry.
Project management offices (PMOs) are becoming a standard for IT and telecommunication companies to sustain their business competence. Increasing business competition, dynamically changing business needs, and expanding business networks encourages IT vendors to adopt advanced project and portfolio management solutions. The increasing need to align resources and projects by changing business goals is driving substantial adoption across the IT and telecommunication industry.
The healthcare industry is adopting a disciplined approach in projecting portfolio management for systematic planning, organizing, and executing healthcare portfolios. With advancements in PPM tools, the healthcare industry would witness a surge in demand for project and portfolio management systems.
North America Project Portfolio Management Market Size, 2019 (USD billion)
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Geographically, the market is studied for five major regions, namely North America, South America, Europe, the Middle East & Africa, and Asia Pacific.
North America market stood at USD 1.55 billion in 2019 and is expected to showcase significant growth in the forthcoming years. The dominance is attributable to the presence of a large number of key players across the region that is propelling a huge demand for project-specific software across the United States and Canada. Also, the presence of developed IT infrastructure presents a lucrative opportunity for the incorporation of agile business solutions.
The growing inclination towards the work from home, bring-your-own-device (BYOD), and remote workforce is accelerating the demand for a centralized and collaborative portfolio management system. According to a survey conducted in September 2019 by Owl Labs and Global Workforce Analytics, 62% of the workforce across the United States is working remotely while 38% are on-site employees. Thus, with the acceptance of modern work culture and technological advancements, North America is likely to dominate the global market.
Progressive prospects towards the digitization of business processes are expected to drive substantial market growth across Europe. Prominent companies are looking for establishing and expanding their business network across the region. This expanding network of PPM providers is validating significant growth for the market. The increasing adoption of portable devices and cloud-based solutions is expected to boost the PPM demand across the region.
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Several organizations across the Middle East have already embedded advanced business models for ensuring long term business success. The transformation of business models to achieve optimal business goals is likely to accelerate market growth across the region.
With the developing and rapidly expanding IT infrastructure, Asia-Pacific (APAC) is anticipated to emerge as an opportunistic region for the market. Technology acceptance and ongoing digitization are the key factors that would probably support the PPM market growth in APAC. Significant adoption of cloud-based solutions is likely to drive SaaS PPM demand across the region. Therefore, Asia-Pacific is anticipated to showcase considerable growth for the market during the forecast period.
Key Companies are Continuously Updating PPM Portfolio to Meet Dynamically Changing Customer Requirements
Key companies in the PPM market are primarily focusing on the evolution of their existing portfolio management solution. Key players facilitate operational alignments to help businesses to improve their strategic planning and business agility. The companies are integrating project and portfolio management software with existing business process management systems to align overall business operations.
Advanced technologies such as artificial intelligence, machine learning, and the internet of things (IoT) are helping key players automate their overall project and portfolio management process. Besides, major companies are introducing custom-centric product and service portfolios to meet customer’s requirements that will drive the adoption of the advanced software. In June 2020, Changepoint Corporation introduced subscription-based professional services intended to entice more and more customers.
An Infographic Representation of Project Portfolio Management (PPM) Market
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The project portfolio management market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.
Value (USD billion)
Component; Deployment; Enterprise Size; Application; Vertical and Region
By Enterprise Size
Fortune Business Insights says that the global market size was USD 3.49 billion in 2019 and is projected to reach USD 5.74 billion by 2027.
In 2019, the market in North America stood at USD 1.55 billion.
Growing at a CAGR of 6.5%, the market will exhibit steady growth during the forecast period (2020-2027).
The software segment is the leading segment in the market during the forecast period.
The growing popularity of cloud-based PPM software is expected to fuel the market demand.
Planview, Inc., Integrated Project Management Company, Inc., Changepoint Corporation, Wrike, Inc., and Hexagon AB, among others are major players of the global market.
North America dominated the market share in 2019.
Artificial intelligence is likely to accelerate automation in project and portfolio management processes.
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