If you’re struggling to make sense of the difference between project management and portfolio management, choosing the right software isn’t going to be easy. In simple terms, project management involves leveraging the right skills, knowledge, and assets to project activities to ensure the best possible returns.
Although there’s some crossover, portfolio management refers to a situation where multiple projects are part of the equation. Projects need to be selected and managed with an eye on the larger prize.
Project management software is more insular, whereas portfolio management software provides business leaders and stakeholders with far-reaching visibility. Project management software can help individual teams deliver results, but only portfolio management software allows business leaders to make better decisions.
HomeCheck will guide you through the definition of each, the drawbacks and which option should suit your business the best.
Project management software explained
Generally speaking, project management software is used for scheduling and planning. Today, project management software can also streamline things like task management and team collaboration. Ideally, software should also provide automated project reporting and document management applications.
The best project management software also allows for resource management. As well as making it simple to assign resources, it also makes resource forecasting easier. Other useful capabilities include time tracking, although this functionality is becoming less of a staple.
Finally, this type of software allows for exhaustive project budgeting. Low-tier solutions may only provide basic management tools, while more advanced software has no such limitations.
Types of project management software
As more solutions migrate to cloud-based models, vendors have begun to offer a variety of project management software packages. Broadly speaking, project management software comes in four main varieties.
So-called lightweight project management tools are the most popular. This type of software is a good fit for users with relatively little project experience and technical know-how. Nonetheless, these lightweight software packages aren’t lacking when it comes to task-tracking capabilities and everyday management tools.
Agile project management software is another option. Founded on Agile project methodology, this type of software is designed to accommodate more complex projects that need to be broken down into sprint cycles. More than 71% of companies in the United States are now using Agile project management. This is unsurprising when you consider that Agile projects enjoy a 64% success rate.
For more experienced users, standard project management software is the way to go. These tools make project planning and scheduling simple, although users will need to have in-depth knowledge to leverage them effectively.
Finally, there is combined project and portfolio management software. In short, this software brings users the best of both worlds. The best portfolio management systems incorporate standard project management functionality as standard.
The drawbacks of project management software
Project management software isn’t always the best approach. It’s often used for relatively simple projects, which can confuse inexperienced users and cause unnecessary delivery delays. What’s more, many project management solutions don’t provide in-depth reporting.
Although many software options provide at-a-glance insights, project managers will typically have to decipher this data and create full status reports manually.
There are always visibility issues. If multiple teams are working on the same project, maintaining oversight of simultaneous timelines is essential. Such visibility isn’t always guaranteed with project management software.
Portfolio management software explained
Unlike project management software, portfolio management solutions focus on long-term business value. The best software combines all the key capabilities of project management solutions with portfolio tracking features.
Portfolio management software makes managing new project tasks simple. If you’re looking to take full control of work intake and new order requests, there’s no better option.
Most project management solutions fall short when it comes to road mapping. This isn’t the case with portfolio management software. With the right software, portfolio management teams enjoy far-reaching insights so they can make better strategic decisions.
There are also far more options when it comes to reporting, with exhaustive analytics on hand to make life easier. Capacity planning is also made simple, with portfolio management teams able to quickly determine whether resources can be redirected to accommodate new assignments.
The project portfolio management market is enjoying unprecedented growth. By the end of 2029, the global market is expected to be worth more than $7 billion.
Which is the right solution for your business?
Both types of management software have their uses. However, if you’re focusing on a single project, project management software is often too limited to address evolving needs. If you think project management software is a suitable fit, make sure you’re choosing the right type of solution. Inexperienced users will benefit from lightweight solutions, while more experienced project managers will prefer a robust suite of tools.
If your focus is on project investment and long-term strategy, portfolio management software is the way forward. With instant access to in-depth reporting and analytics, portfolio managers can make strategic decisions that benefit individual projects, as well as overall business goals. Ultimately, portfolio management software will bring greater value to your organization.