Influence of Project Management Software Tools Usage on Project Success

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1 Influence of Project Management Software Tools Usage on Project Success Kristina Brodar University of Zagreb Faculty of Organization and Informatics, Varaždin Igor Pihir University of Zagreb Faculty of Organization and Informatics, Varaždin Abstract. Considering the ever faster rate of business activities, it is important for each organization to establish a smooth flow of relevant information and coordination of business activities. Nowadays they are almost unimaginable to achieve without using information and communication technology. Project oriented organizations and their effectiveness largely depend on the success of their projects. Information and Communication Technology (ICT) offers adequate tools for support in project planning and management, whereat one of the most often used software solutions is MS Project. Investments in IT projects are usually high, but their return is sometimes questionable. This research aims to prove that investments of project organizations in software tools, such as MS Project, bring significant benefits, and have impact on project success. The survey includes from the Varaždin County taken as an example of project organizations. It also includes other mostly larger-sized companies from all over Croatia for results comparison. We assume that these companies largely use the above mentioned or similar tools for project management. Keywords. ICT, project management, MS Project, project success,, Varaždin County 1. Introduction The usage of Information and Communications Technology (ICT) significantly affects the operations of modern organizations as well as individuals using their services and products. Procedures which previously took days and months are today reduced to only a few minutes or hours by using appropriate applications and tools. One of the areas in which ICT has brought significant time savings is project management, especially in its operational part. Project management (PM) is the application of knowledge, skills, tools and techniques to project activities to meet project requirements. Project management is accomplished through the application and integration of the project management processes of initiating, planning, executing, monitoring and controlling, and closing. [1] The project manager is the person responsible for accomplishing the project objectives in the best possible way. To achieve that, modern project managers need to use adequate software tools to help them organize and track project activities. Project Management Software (Tool) a class of computer software applications specifically designed to aid the project management team with planning, monitoring, and controlling the project, including: cost estimating, scheduling, communication, collaboration, configuration management, document control, records management, and risk analysis. [1] Efficient project management presupposes more than good planning, as it requires that relevant information be obtained, analyzed, and reviewed in a timely manner. In this way an early warning of pending problems and impact assessment on other activities can be provided, which can lead to alternative plans and management actions. Today, project managers can choose from a large array of available software to help them in the difficult task of tracking and controlling projects. While it is clear that even the most sophisticated software package is not a substitute for competent project leadership and by itself does not identify or correct any task-related problems it can be an invaluable aid to project manager in tracking the many interrelated variables and tasks that come into play with a project. [6] Implementing activities for pursuing of a project, drawing Gantt charts and network diagrams, assigning resources, making reports

2 either with the project still in progress or after it is completed previously required significantly more time. After defining all project details, which must be done no matter whether we use the classic manual approach, or we apply modern software tools, using software tools reduces the duration of operational work. Thereby the manager is allowed to focus on essential elements of PM planning, defining strategy and tactics, as well as managing risks in the project and in its environment. Nevertheless, information systems and applications for project management can not perform the complete project instead of humans. They represent just a tool in the manager's hands and their efficiency will depend on the project team s capabilities. Even NASA (US National Aeronautics and Space Administration) has recommended 100 rules for their project managers, mentioning the need for using modern technologies in project management, at the same time taking care of their limitations. Among them, the following rules are especially interesting: [7] - Rule #62: Not using modern techniques, like computer systems, is a great mistake, but forgetting that the computer simulates thinking is a still greater mistake. - Rule #65: In olden times, engineers had hands-on experience, technicians understood how the electronics worked and what it was supposed to do, and layout technicians knew too but today only the computer knows for sure and it s not talking. 2. Implementation of project management software tools The existing project management software tools do provide support to the project manager and have several basic strengths: Planning calculation and re-calculation; Recording progress and feedback data; Comparison of the planned against the actual achievement and Recalculation of the plan in relation to progress update. These reflect the strengths of data processing by computers applied to project planning. Given input data and modifications, the tool will rapidly calculate and then re-calculate the plan. This is the basis for what-if calculations useful during project initiation and the processing of progress data. [8] The decision to implement project management tools should be justified by the project size. Due to British standard BS 6046: part 3, issued in 1992, companies should act in accordance with these rules: [5] - in case the project consists of less than 500 activities and the mutual relations are relatively simple, this standards suggests to manage the project manually - if the project consists of more than 500 and less than 3000 activities and those activities are significantly different, the computer should be used - a project which consists of more than 3000 activities should be divided into a few smaller projects that should be performed simultaneously by computer. Other factors which have to be considered when making decisions about using computers in PM include: - nature and final purpose of planned output, depending on whether the results will be used later and in which form - frequency of data update or the need for ordinary and continuous calculation of the new data. 3. Influence of project management software tools on project success Having consulted the available literature in the field of project management, we have found some research that shows the usage of ICT and supporting software tools in project management. Previous research done by Baljkas [3] performed on a sample of 50 companies shows that 59% companies in Croatia use certain software for planning and managing projects. Among those companies, 81% are using Microsoft Project, 1 Primavera Project Planner, while other tools are used rarely. In their book Omazić and Baljkas [9], they refer to the international research made by Fox, L. Terry under the title Do the Features Support the Functions?, PM Network, PMI, March This research shows that these kinds of tools are used all over the world. Microsoft Project is utilized in 48% of cases, Primavera Project Planner in 14% of them, and there is a relatively high percentage (9%) of Microsoft Excel usage. However, none of the studies we found reveals any data about how the usage of project management software tools helps in PM. In accordance with that, and with the goal of confirming our assumption that using software tools contributes to project success, we performed the following research.

3 An anonymous survey was sent by to IT companies in the Varaždin County. The sample was extracted from the telephone book, by industry description Informatics. We found 71 companies, and 31 correctly completed questionnaires were sent back. To increase the accuracy of our research, we sent the survey to 65 other, mostly larger-sized, or leading, companies in Croatia. We received back 27 correctly completed questionnaires. Our goal was to show that the usage of ICT and specialized software tools brings significant benefits to project success. The response to our survey was fairly good, which can be seen from the following rate: 31/71 survey respondents in IT firms, which is equal to 45% of the sample, and 27/65 survey respondents in other companies, which is equal to 42% of the sample. The survey consisted of closed-type questions. These are our conclusions based on the survey: Question 1. Do you use computers for planning and managing projects? 16% 1 55% 15% 7% 45% Yes, every day Yes, sometimes Rarely Question 2. Do you use some kind of software tools for project management (MS Project, Primavera,...)? No 5 Yes 5 No 38% Yes Yes 62% Figure 2. Usage of specialized and other software tools in project management. When choosing a tool is concerned, our research has revealed a large share of Microsoft Project, ahead of other specialized tools like Primavera Project Planner, Microsoft Excel and some other tools or their own applications for helping planning and managing projects. Excel is not a specialized tool but it is used very often, either separately or in combination with other specialized tools. Our findings are therefore in line with the afore-mentioned similar researches conducted in Croatia and abroad [Fig 3]. Question 3. What kind of software tools do you use in planning and managing projects in your company? (Multiple answers allowed) No 19% 33% Never 8 76% Figure 1. Computers usage in project management % 57% The analysis of survey data answers to the first question reveals that in both cases companies use computers in planning and managing projects. In 9 of the survey respondents use computers every day, sometimes or rarely, while only 1 of them never use computers in planning and managing projects. The answers obtained from the group of respondents from other companies show that 93% of them use, and only 7% do not use computers in project management. Comparison is given in [Fig 1]. The analysis has shown that those subjects that use computers utilize specialized (and other appropriate) software tools in their projects management. The percentage of specialized software usage is shown in [Fig 2] % Microsoft Project 4% Primavera Project Planner Microsoft Excel 21% Other 12% 21% 36% 57% 21% 21% 48% 4% 76% 12% Own solutions Figure 3. Software tools used in project management. In question number 3 it was allowed to choose multiple answers, because some entities often use a combination of software tools. The number of particular answers was put into proportion with the number of respondents that use computers in planning and managing projects. Respondents satisfaction with their specialized software and its capabilities is pretty

4 good. Users in using specialized software answered in the following way: 29% are very satisfied, whereas 71% are satisfied, but some slight weaknesses exist. Users in other companies also using specialized software answered as follows: 53% are very satisfied, while 47% are satisfied, but some slight weaknesses exist. Users in probably rate the software a bit more seriously, but there are no unsatisfied users, as we can see in [Fig 4]. From these results we can conclude that all users are well trained and are using these tools properly. Question 4. If you use some tools, how satisfied are you with their options? 71% Figure 4. Respondents satisfaction with software tools Although users are satisfied with software capabilities and their opinion is that such tools are important (some think invaluable) for project success, they consider that those tools are not the most important factor of project success. About one quarter of respondents think that those tools make a difference, but there are much more important factors. A similar distribution can be seen in both groups of respondents. [Fig 5] Question 5. In your opinion, how important is the usage of such a specialized software tool? 14% 86% 29% 27% 47% 7% Figure 5. Importance of software tools for project success. Question 6. If you compare your projects before and after implementing a specialized software tool, which ones are more successful? 10 Projects managed with specialized tool. 66% 53% We are very satisfied We are satisfied, but some slight weaknesses exist We are not satisfied, there are major weaknesses of the tool We are completely unsatisfied The tool is invaluable Great, but the tool is not the most important factor The tool makes a difference, but there are some more important factors Little importance Concerning the question about the project success before and after implementing a specialized software tool, all respondents in both groups answered that their projects were more successful after implementing a specialized software tool for project management. The same result was obtained in both groups, but only the respondents using specialized software were taken into consideration. All users think that they have increased their project successfulness after implementing some software tool/s for planning and managing projects. With our survey we also examined their own perception of their projects, on a scale from 1 to 10, where 10 is the highest degree. The success was measured by the extent to which: projects were completed on time, within budget and with all the features and functions that were initially specified. The graphical interpretation of respondents answers [Fig 7] represents the relationship between the average successfulness ratings in these two groups, and other companies in Croatia. The first x-axis item refers to projects managed without computers. The second item refers to projects supported by the use of computers. The third item represents projects managed with the usage of specialized software tools for project management. The last item refers to projects managed with support of nonspecialized software tools. Question 7. According to your perception, how successful are projects in your company? (Were they completed on time, within budget, with all the features and functions initially specified?) 10 is the highest degree Don't use computers 7,5 7,52 7,57 7,46 6,79 7 6,56 4,5 Use computers Specialized software Non-specialized software Figure 7. Project successfulness in relation to project management software usage.

5 From this graph [Fig 7] we can see that the first group of respondents in their own perception consider the usage of such software tools as an irrelevant factor for project successfulness. They also find the benefits of the project management software to be negligible. This result is in correspondence with the answers to Question 6, where 10 of respondents estimated their project successfulness grew after applying such specialized tools. According to the research done by Bogović [4], in the Varaždin County on average have only 3 employees. With such a small number of employees there is an assumption that their projects are also small, which could imply that there is no need for software tools in their project management. The companies using such tools assumingly slightly larger firms see some difference before and after the implementation of such a tool, but their successfulness is not significantly higher compared to the ones using no project management tools. Thus we can conclude that project management software does not contribute considerably to project success. On the other hand, the randomly chosen sample of other Croatian companies includes larger entities, so we can assume their projects are significantly bigger, therefore it is recommended or even necessary for them to use some kind of project management software (according to the BS 6046 standard). The results of the survey show that within this group there is a considerable enhancement of project success related to specialized software usage or computer involvement in project management. The successfulness of the companies in this group not using computers is estimated at 4.50, the group of companies using computers estimated their projects at 6.79, while the ones using specialized project management tools rate their projects at This difference is significant, so it can be concluded that all companies in this sample benefit from using project management tools. Since all the respondents (10) who use specialized software answered that their projects were more successful after software implementation, we can conclude this is a significant contribution to their projects' success. 4. Factors of project success in IT industry and in general Our research shows that tools and their usage only partly contribute to projects success. There is fairly extensive research into factors we need to pay attention to in order to improve our projects [5, 9, 11]. Since ICT is just a support to managers and other team members in problem solving and does not solve the problems itself, we tried to emphasize the role of ICT in problem solving and its contribution to project success Why IT projects fail Research continually shows that companies have difficulty with IT projects. One example is the Standish Group's study of 30,000 IT application projects in US companies. The category definitions for the Standish Group research are as follows: [11] Successful projects were completed on time and on budget, with all the features and functions that were initially specified. Failed projects were cancelled before completion or never implemented. Challenged projects were completed and operational, but over-budget, over the time estimate, and with fewer features. The Standish Group, which exists solely to track IT success and failures, shows these reports through the years. [9] Succeded Failed Challenged Figure 8. Project outcomes history ( ) The reasons for the increase in successful projects vary. First, the average cost of a project has been more than cut in half. Better tools have been created to monitor and control progress and better skilled project managers with better management processes are being used. [5] This diagram shows that the percentage of failed projects was reduced over the years. According to Ephraim Schwartz [10], the Standish Group surveyed 13,522 projects in That survey shows that 34% of the projects were successful, 15% of them were abandoned and the other 51% were challenged projects, in

6 other words, projects not finished on time, on budget or within the initial scope. The level of success can be tied to the degree of user involvement, executive management support, and the presence of an experienced project manager. For IT project consultancy Sapient, the key ingredient for success or failure rests on the processes a company puts in place to manage risk. Sapient is a company founded on the realization that IT projects are not successful Key failure factors and how software support will help to prevailing them Primary causes for the failure of complex IT projects, as listed in [11] are: Poor planning Unclear goals and objectives Objectives changing during the project Unrealistic time or resource estimates Lack of executive support and user involvement Failure to communicate and act as a team Inappropriate skills. Some of the factors can be improved using different software tools. Project management software tools have many possibilities for planning and simulating changes in project plans, as well as in project duration, costs, human and material resources. However, before they are used in planning and simulating changes, they have to be well defined. Project management software tool requires a lot of details. All members of a project management team can use the existing templates of similar projects to define their project goals and specify project tasks more easily. The project management team members can conduct what - if case analysis and thus simulate different kinds of scenarios with the aim of preventing unwanted outcomes. For each activity employing a particular resource estimating the time duration is very important. Time duration of each task is usually calculated manually, but a project management software tool automatically calculates costs and time duration for all tasks and draws attention to eventual conflicts between resources and their possible over-allocation. Project management software helps in easily monitoring processes, comparison with project plans, and timely reacting to difficulties and discontinuity between them before they escalate. A project management software tool provides simple presentation, printout and exchange of different sources of information and different types of reports. Almost all project management software tools have some possibilities for communication among team members. One of the biggest reasons for project failure is bad communication among team members. This is the reason why software tools usually support communication among them through different communication channels. The main channel is electronic mail ( ) through its integration with other tools for electronic mail, like Outlook. Data file exchange is possible in combination with special tools like Microsoft SharePoint or some other document management system. In a network environment and with the network version of this kind of software it is possible to make a pool of resources on a server, from which resources can be disposed in parallel to several projects. Any project team member can update the project progress, or see their project resource allocation on their local computer. This is the most efficient way of project management by which team members can avoid conflicts arising from the team members not being familiar with the updated plans or project goals and overall purposes. Training the project team members to use different software tools is essential because without it the simplest problem in project management can cause serious difficulties. Before the project actually starts, each tool needs inputs. The time for entering all inputs has to be calculated and considered in advance Project success in dependence on its size According to the Standish Group research published by Schwartz in [10], the larger the project, the greater the chance of failure. This report is shown in [Fig 9]. Figure 9. Project success in dependence on project size

7 Presented data are in line with our own research results. Smaller projects stand a better chance of being successful then the larger ones. In case of in the Varaždin County, which presumably have smaller (cheaper) projects, the average successfulness degree estimated at 7.5 can be acceptable. We must remember that the respondents' assessment is subjective, relying on their own perception of their companies' projects. 5. Conclusion in the Varaždin County have on average 3 employees, which implies that these companies are on average small, and that their projects are mostly smaller projects. Considering that, and in accordance with the afore-mentioned recommendations regarding project size, we can conclude that these companies do not need to implement specialized project management software. The difference between the average degree of project success, with or without the tool, is insignificant. It is 0.02 on a scale of 1 to 10. If we look at this matter from another angle, we can see that, according to some project success surveys, these projects are relatively successful because they are smaller and cheaper than those in other companies in the parallel survey group. from all over Croatia, chosen as a sample in our research, are mostly large companies. The assumption is that their projects are significantly larger than in the first group. Results for this group show that projects managed by computer support are considerably more successful than projects managed without computer support. Computer supported projects have the average degree of 6.79 versus 4.5, which is the average degree in projects not supported by computers, which is a significant difference. Using of specialized software in comparison with non-specialized software tools gives a difference of 7.00 versus 6.56, which is also significant. This result proves the importance of using project management software tools. Regardless of the above mentioned degrees, both groups of respondents answering question number 6 confirmed that their projects were more successful after implementing a specialized software tool. That confirms usefulness and prominent role of such software in project success. 6. References 1. *** A Guide to the Project Management Body of Knowledge (PMBOK Guide), 2004 Edition, Project Management Institute, *** Business Rules Management Systems; The Code Project; 2007; ess_rules_systems.asp?print=true; [Accessed May 30, 2007] 3. Baljkas, S: Metode planiranja projekta u hrvatskom okruženju, magistarski rad, Ekonomski fakultet Zagreb, Bogović, T.; Influence of IT Entrepreneurship on the Varaždin County Development, master thesis, Faculty of Organization and Informatics, Varaždin, University of Zagreb, Johnson, J. H.: Micro Projects Cause Constant Change, The Standish Group International, Inc, 53/file.pdf, [Accessed May 28, 2007] 6. Kerzner, H.; Project Management: A Systems Approach to Planning, Scheduling, Controlling; eight edition, John Wiley & Sons, Inc, Haboken, New Jersey, Madden, J.: One Hundred Rules for NASA Project Managers, [Accessed June 04, 2007] 8. O Connor, R.: Intelligent Assistance for Software Project Management, Technical Report CA-3797, Dublin City University, 1997, s/1997/ca-3797.pdf, [Accessed May 28, 2007] 9. Omazić, M. A., Baljkas, S.: Projektni menadžment, Sinergija, Zagreb, Schwartz, E.: IT Myth 5: Most IT projects fail, InfoWorld, 2004; - /article/04/08/13/33femyth5_1.html; [Accessed May 20, 2007] 11. Taimour, A. N.: Why IT Projects Fail, [Accessed May 20, 2007]