LinkedIn said to me once, “Project management software – the redheaded stepchild project management offices.”
It has been for a while. Many project management systems were inefficient, expensive, confusing, and, frankly, an obstacle, rather than an asset. Project management software has advanced a lot and is now easier to customize and find the right fit.
It’s still very expensive.
The good news is that project management software can be a worthwhile investment. This article will explain how to determine if project management software is right fit for your company.
1. How much does project management software run you?
It is not always easy to see the cost of project management software. The biggest factors in determining the cost of project management software are the size of your company and the amount of storage you need. Here’s a summary of our findings.
For a more detailed analysis, see my previous post, “How Much Does Project Management Software Cost?”
These are the only costs associated with using the software. Fortunately, most project management software doesn’t require an initial installation fee. There are additional costs, such as the time required to convert files to the new system or the cost of training each user how to use the software. These costs should be included in any cost calculation.
2. How much money can project management software help you save?
This question hinges on the selection of the right software for your company, your team, and your projects. Capterra’s software advisory service is free and will help you choose the right project management software for your company.
After you have chosen the right software, plan for the next three years. Be sure to consider the growth rate of your company and that the software can grow with you.
It is important to calculate your company’s projected revenue growth when you grow. If you choose a program that tracks time and expenses, you can expect a higher ROI for a project because your employees will be better able to bill accurately. Keep in mind that new project management software should not be more expensive to maintain than the previous system. This will increase overall revenue.
You might be thinking, “Rachel! How on earth are you supposed to know all these numbers?”
It’s possible to not distill all these savings down to one number. You don’t know how big your company will be in three years, and you don’t know how much project management software can save you before you even try it.
But, you know what? It is worth taking the time to estimate how much you could save and will help you decide if project management software is right for you. You will also discover what project management software you want by calculating your future savings.
3. Are the benefits worth the cost?
These projections show how much the software will run and how much you will save over the long-term. These numbers can be used to compare the cost-benefit ratio over the life of the software. Add all the future benefits and costs to your current value to calculate the internal rate of return. Once you have done this, calculate the difference between total costs and total benefits.
Remember that ROI is the sum of Gain from Investment – Cost Of Investment/Cost of Investment.
It is impossible to find the perfect cost assessment for software if you have never done it before. The above-mentioned formulas can help you determine whether project management is right for you.