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Feb 09

The True Cost of PPM Software Implementation

PPM software cost

Behind the obvious costs of PPM software implementation – such as the cost of licenses, initial configuration, and training – lie the, often surprisingly high, hidden costs. Distorted high-level view of the portfolio, decline in productivity, or even tool abandonment are just some examples of those. The hidden costs can be high enough to break your PPM software bank. How to avoid them?

In the Age of Cloud, the monthly cost of a PPM software license varies from $15 to $150 per user per month for a proven solution. Increasingly often, server solutions are being charged perpetually (per year), as is the case with the SaaS hosting. That is because even server licenses of PPM software must cover the expenses of support and app development. Notably, it is the cost of licenses, and later support, which are commonly referred to as the “cost of implementing a PPM app”. Consider the following estimations:

The traditional cost of PPM software – benchmarks

—An Enterprise-class PPM solution (…) will likely cost $60-$100 per full-function user, per month for licensing. In addition, you should plan for a one-time services cost for basic configuration and onboarding assistance. This could range from $30,000 – $100,000 or more [50 – 150 users], depending on your organization’s complexity – Kim Essendrup, Kolme Group.

—Purchase prices for mid-market solutions with robust PPM features and at least minimal capability to support project selection range from about $5,000 to $50,000. You can obtain monthly subscriptions to access such tools for about $15 to $30 per month per user. High-end, feature-rich systems aimed mostly at larger organizations typically have six-figure price tags – Lee Merkhofer, prioritysystem.com

Let’s have a closer look at a more complete list of items that make up the cost of PPM software implementation.

What are the true costs of PPM software implementation?

Conventional vs Hidden Costs of PPM software implementation

Table 1. Conventional and hidden costs of PPM software implementation

Conventional costs Hidden costs
License:

  • purchase price
  • subscription fees
  • per-user or per-workstation licensing?

Hardware
(server hosting only).

Data migration:

  • portfolio and project data
  • user accounts and permissions

Onboarding:

  • setup and configuration
  • project templates configuration
  • developing reports

Training:

  • introductory for PMs, software administrators, and users
  • later: mastering new versions of the software

Support and maintenance:

  • reporting bugs
  • feature requests
  • custom development
#1 Data migration
perpetual copying and pasting data from one system to another.
#2 Impaired productivity of teams.
#3 Inaccurate big picture of an organization
not living up to the SSOT, Single Source of Truth promise.

#4 Risks of:

  • tool abandonment
  • paying two or even three times for PPM software
  • lost opportunity costs
  • tool’s end of life or end of support support

#5 Missing configuration/automation features:

  • stuff that is normally configurable was actually hardcoded
  • the configuration is possible but requires coding skills, such as SQL
  • setup involves customer support or custom development

Experienced consultants know that the hidden costs can easily outgrow the conventional costs. ‘The bigger the better’ is not a rule of thumb here. Hidden costs may turn out surprisingly high with comprehensive, fully-blown PPM software suits. A lot has changed over the last years in the PPM software market. New, smart approaches to the Project/Product Portfolio Management software have emerged. Many of those modern PPM packages are good at protecting you from hidden costs. They are sleeker and carry less risk, yet are capable of delivering an even more accurate big picture of the organization.

How not to inflate the bubble of hidden costs?

If you look at the hidden costs (right column of Table 1), they all revolve around the incomplete adoption of the PPM solution throughout an organization. Many fully-fledged PPM tools entail a steep learning curve. If things go wrong, the tool will either be used by some and not all in the organization; or the tool’s certain features might be skipped by users; or the tool could end up entirely abandoned. It’s hard to please everyone; it is the work teams who will typically constitute the weak link. Especially the data they enter into the pan-organizational tool might reflect reality poorly, thus contributing to the false big picture at the senior management level. Data discrepancies will begin to emerge, data reliability will suffer, Single Source of Truth will become an illusion.

Hence, it’s good to follow these rules:

Choose a PPM software tool connectable to third-party task managers.

Addresses #2 and #3 of the hidden costs.

Rule number one to avoid a revolt on board. Seemingly, for a global Silicon Valley-based company a proven, top-tier PPM tool is the best choice. In reality, some teams on the East Coast, in Europe, or India have their preferred task management programs with matching workflows. Forcing them into a pan-organizational PPM application would be a recipe for disaster. Instead, seek a PPM tool that has the portfolio overview and project management modules (Gantt chart, Roadmaps, Resources, Program Boards, Risks), but does not say the final word at the task management level. In other words, you are applying the PPM “umbrella”, but your work teams can continue using Jira, Trello, Azure DevOps Server, or whatever task manager they like.

Browse the apps marketplace of your existing task manager for a PPM plugin (no need for data migration).

Addresses #1 and #4

It’s not a coincidence that we assigned ‘Data migration’ to both the conventional and the hidden costs in Table 1.

  1. The need for a one-time migration of data is obvious when you implement a new piece of software in your organization. Yet even the conventional, one-time data migration can be avoided if you buy a dedicated PPM solution for your existing issue management software. A good example is Jira + BigPicture. You can obtain BigPicture PPM add-on from Atlassian Marketplace. In other words, look for a PPM solution within your home ecosystem to skip data migration.
  2. Now, what are the hidden data migration costs? Data migration occurs ‘perpetually’ if people in your organization keep pasting data into the PPM tool from some other source, be it a spreadsheet, Asana, ClickUp, or another work management piece of software they prefer to use.

Data migration, especially item 1 from the list, can be challenging, and in real-life migrations, it tends to be ‘exponentially underestimated’ in terms of cost and time. The following things happen during the one-time data migration:

  • the involved data migration personnel are not familiar either with source or target database. Plenty of doubts arise (e.g. which fields to map together) and experimenting is needed during the migration process.
  • on large databases, insufficient computing power may cause the migration process to last hours or even days
  • the migrated data causes dozens of errors on the new PPM software
  • the wrongly migrated data produces false business reports. This is often discovered days or weeks after migration.
  • catastrophic incidents, accompanied by no back-up file, happen surprisingly often

Avoid data migration at (nearly) all costs – is our pro tip.

PPM plugin carries its risks, too.

For instance, the plugin could become incompatible with the issue management software, once you’ve upgraded the latter. Issue management software itself can have downtime incidents. The API of the issue management system can change, leaving your integrations inoperative. Finally, once the PPM tandem begins to malfunction, you’ve got two support desks, and not one, to contact.

Choose a multi-methodology tool (agile, hybrid, predictive PM).

Addresses #2, #4, and #5

It’s hard to believe some more recent PPM software suites focus on agile portfolio management and skip the predictive, timeline-based modules, such as the Gantt chart. As we discussed here, very few organizations don’t have at least one waterfall project in their portfolio. Your project/product managers will appreciate the presence of all three – agile, classic, and hybrid project templates (~Boxes, as we call them in BigPicture) in the PPM tool. Your work teams will appreciate the presence of proven tools, such as the Gantt chart, WBS, risk matrices, or calendar views, even if Roadmaps and Boards sound more up to date.

Reduce the hidden costs of your PPM software by purchasing a package that supports classic, hybrid, and agile approaches to management.

Give preference to tools that boast a sleek implementation roadmap.

Addresses #4

The implementation of an extensive PPM package might as well take a full year. You can easily google the legacy PPM software implementation roadmap, as seen in Figure 3. Have a look at the BigPicture’s lean implementation roadmap, evident in Figure 4. It is entirely feasible to implement a modern PPM package over a month.

Figure 3. Traditional PPM software implementation roadmap. Source: prioritysystem.com.

 

BigPicture PPM lean implementation roadmap

Figure 4. BigPicture’s sleek implementation roadmap.

 

Choose a PPM supplier backed by a network of partners.

Addresses #4

A plethora of consultancies around the world linked to a solution guarantees the software will last long. The more experts invested their time into learning a software package, the less likely it is that the application will one day disappear from the market, leaving you with no support. A well-developed vendor network provides you with choices of who will guide your organization across the migration and integration process.

What’s more, PPM software is a tailored product. Thanks to a vast network of experts specialized in a specific tool, you can contact a consultant in your region and get the necessary assistance in reconfiguring and fine-tuning the system as your portfolio grows and your organization evolves.

Conclusion

Licenses, configuration, and training are the tip of the iceberg when it comes to the cost of PPM software implementation. Hidden costs, such as impaired productivity of teams, false portfolio-level reports, and missing flexibility (predictive-hybrid-agile), may weigh an organization down for years. Choosing a modern, lightweight, third-party-apps-ready PPM solution helps optimize your Total Cost of Ownership.

 

About The Author

With his automotive background Marcin goes beyond the 'Jira + software development' standard. He likes simple, up-to-five-sentence answers to complex questions.