Frequency of Use and Importance of Software Tools in Project Management Practice in Croatia

Frequency of Use and Importance of Software Tools in Project Management Practice in Croatia Robert Fabac, Danijel Radoševi, Igor Pihir Faculty of Organization and Informatics, University of Zagreb Pavlinska 2, 42000 Varaždin, Croatia {robert.fabac, danijel.radosevic, igor.pihir}@foi.hr Abstract. In developed economies, project management in enterprises is almost inconceivable without the support of dedicated software tools. Over the last decade the way in which project management tasks such as organization, planning and decision-making are executed and supported has evidently evolved. Whereas a decade or so ago scheduling methods including PERT, CPM or using spreadsheets were well-known and widely used, the current standard is software with integrated support for display of activity duration, resource analysis, risk analysis, communication between project participants etc. Apart from advanced network software solutions (EPM, PPM), their less sophisticated versions such as MS Project and Primavera are also well received by users. The research in this paper was conducted on a sample of prominent Croatian companies regarding the practice of project management software using. The obtained results indicate an average level of acceptance of project management support software. Statistically significant correlation values were obtained for variables non-use of support software by small enterprises as well as non-use of support software in small-scale projects. Keywords. Project management, software tools, Primavera, MS Project, companies attributes, correlations 1. Introduction Project management has grown from the early initiatives in the U.S. defence and aerospace sectors in the late 1950s and 1960s [1]. Project management is generally assumed to comprise planning, scheduling, and controlling of project activities to meet project objectives [2]. Its major objectives include performance, cost, and time goals. The first widely used techniques of network planning were the Program Evaluation and Review Technique (PERT) and the Critical Path Method (CPM) [5]. Contemporary project management should be supported by the use of appropriate software. Project management (PM) support software enables reporting, tracking of progress, re-ordering tasks simulation, cost control etc. Complexity in the environment and organizations results in an unpredictable system s behaviour, primarily concerning the people included in the organization or project [3]. Complexity includes phenomena such as self-organization, emergence and adaptation. Owing to this complexity, the outcomes of processes can not be predicted by one manager or analyst, although they can be simulated by means of appropriate software tools. Effective project management information and control systems must be tuned, preferably by means of third party observation, scheduling and estimating resources. While these measures do not necessarily guarantee success, their absence will certainly make success more difficult to attain [4]. New analytical approaches in IS support are focused on portfolio product competitiveness (Gartner [8]). Apart from advanced network software solutions for project management, such as EPM, or PPM, some less sophisticated versions are still well received by users, especially for the smaller projects. Our decision to examine exactly the issue of choosing MS Project or Primavera as project management tools was motivated by the market leader position of these products taken several years ago. 2. Project management Contemporary project management is characterised by the development of an integral information system that provides support to processes aimed at avoiding the occurrence of the island of information. Project management 465 Proceedings of the ITI 2010 32 nd Int. Conf. on Information Technology Interfaces, June 21-24, 2010, Cavtat, Croatia

has thus become a constituent part of the corporate Decision Support System [7]. Classical project management is marked by the isolated IS while by contemporary project management the supporting technologies and information systems are integrated in organization s IS and contain specialized software packages [7]. In the domain of quality, the maturity model concept is well known. These models have been used as a framework for establishing and evaluation of Best Practices related to process management. Their recent versions encompass the area of project management as well so the Project Management Institute standard OPM3 (Organizational Project Management Maturity Model) was developed. For the broader context P3M3 (The Portfolio Programme and Project Management Maturity Model) is also relevant, as it provides guidelines for breaking down the disciplines of portfolio, programme and project management into a hierarchy of Key Process Areas (KPAs). The UK Office of Government Commerce has released a draft version of P2MM based on Prince 2 project management methodology [9]. Enterprise project management (EPM) and Project portfolio Management (PPM) are modern concepts of project management, which imply dealing with several projects simultaneously and are oriented to using project management software tools. Enterprise project management (EPM) is an enterprise view of all project management activities and how these activities contribute to the success of the organization. [10]. Project portfolio management (PPM) deals with a collection of projects and/or programs and other work processes grouped together to facilitate effective management of that work to meet strategic objectives where projects or programs of the portfolio may not necessarily be interdependent or directly related [7]. 3. ICT support for project management Project management software tools in general are helpful in all the phases of the project control management cycle: Plan, Organize, Execute, Monitor-and-Control [4]. By means of these tools a lot of functionalities are supported: Tracking actual versus planned progress, Reporting functions, What-if scenario analysis to identify the impact of shuffling resources, tasks dependencies, Cost control, Calendar generators, Charting capacity, Resource control and allocation capability, Collaborative possibilities, Work load capacity viewing, Statistical control of project progress and others [11]. Project management software tools could be generally divided into three categories: project management software (performs scheduling and limited project tracking), process management software (performs planning projects) and time accounting software (allows charging of hours spent on a project) [12]. Regarding their price, project support software can be divided into the following categories [12]: Low-end (cost approximately $500). Examples include MS-Project from Microsoft and SureTrak from Primavera. These are the tools intended for wide use with good scheduling features, but not many tracking features. Mid-Range ($1000 to $2000). Examples include Project Scheduler from Scitor and CA- SuperProject from Computer Associates. High-end. These tools have better multiproject handling capabilities. An example of this group is Primavera Project Planner. In another common classification, project management software can be divided into two groups: classical and web-based (online) software (Table 1.). Software support for PM is recommended by British standard BS 6046. As the decision to implement project management tools should be justified by project size, in projects exceeding 500 activities it is necessary to have such support [13]. Besides, whereas in NASA possibilities of What-if analysis in projects are preferred [14], in Maturity models for Project management it is recommended to use software tools to achieve and maintain maturity level 2 [15]. Despite the range of available tools, the predominant tools recognized by experts and Croatian companies are Microsoft Project and Primavera Project Planner [16]. Microsoft Project 2007 [18], in combination with Project Server, is one of most complete examples of low cost software for this purpose. Several versions of that tool (98, 2000, 2003 and 2007) have been developed over the last decade. Compared to other tools for this purpose, its ease of use needs to be emphasized. It is also full of features and thus meets all the demands of project management in small or medium-range projects. Primavera is a leading provider of construction project management software. It offers a full product for Portfolio project management (Primavera P6). Primavera is also comparatively more expensive than the other similar tools. 466

Table 1. Overview of classical and web-based project management software in 2009 [20]. Functionalities of tools Rank Software tool name Price Number of users Communication Resource Management Project management Ease of use Help/Support TOTAL Classical software 1. Microsoft Project 2007 $510 1 3,5 5 5 4,5 4,5 22,5 2. Intellisys Project $159 unlimited 4,5 4 4 4 2 18,5 3. OpenMind $389 1 3,5 3,5 4,5 5 3 19,5 Web-based (online)software 1. @task $40 1 5 5 5 4,5 5 24,5 2. Daptiv PPM $50 1 5 5 4,5 4 5 23,5 3. Clarizen $22 1 4 4,5 5 5 5 23,5 Features supported by this tool are made for massive planning, managing and control of activities in several parallel projects. It is particularly intended for large organizations and complex projects, as it enables project orientation. For example, it supports up to 100.000 activities within projects and is comparatively more complex to use than MS Project. There is also a possibility of integration of this product with other large systems like Oracle financials or Peoplesoft [19]. Table 1 shows extract of a top-ten overview of the most popular software tools in the market in 2009 [20]. Each of functionalities is evaluated on a scale 1-5, and 5 being the highest grade. 4. Survey: methodology and sample For the purpose of this research, we designed a Web survey in the first half of 2009, which was sent to a sample of 900 most prominent Croatian companies. 4.1. Methods of survey and data processing The list of companies was made by collecting and filtering data from two sources. The first of them was a Business Magazine list of 500 largest companies in Croatia by total revenue [21]. The other source was the weekly magazine Nacional (November 2006), with a list of most successful companies in Croatia by profit. The survey questionnaire comprised a total of 35 mainly closed type questions, with 14 main questions, some of which contained subquestions. The questionnaire was divided into three parts. The first part included common questions about the company (industry, number of employees), projects (number of projects per year, size, duration, number of persons included, budget). The second part was about the information and communication technology used in projects. The third part included questions about the used methodologies and their application in practice. The survey was conducted in two stages: first each company was sent an electronic mail invitation letter addressed to responsible managers (preferably project managers) with the instructions about completing the online questionnaire. The second step was the telephone reminder to e-mail recipients followed by a repeated invitation letter also containing the same instructions. After 3 weeks we collected appropriate responses from 58 companies, which amounted to the 6.4% response rate within the specified sample. In the Croatian context in this type of survey the response rate greater than 3% can be considered a success, although a 10-20% rate could almost be set as a standard (for well developed countries), according to [24]. Reasons for poor response are diverse, ranging from protecting business secrets to organizational culture phenomena of neglecting such kind of research activities. Incomplete and contradictory answers (according to control questions) were excluded from further processing. The analysis of survey responses aimed at determining the standards of project management defined by the Project Management Institute and IPMA were published 467

in [23]. In the current research, our efforts are directed toward researching the experiences and practice of using PM software. Regarding the software tools and techniques appropriate for correlation analysis, the statistical JMP tools version 8.0 were used. Data were processed by means of multivariate correlation analysis with pairwise method. 4.2. Description of the sample, companies and projects Our sample of responders is relatively large (>30) and it is greater than 5% of the basic sample. We could believe that randomness of the sample, as a requirement, is also satisfied. Therefore, we believe that given results are reliable referring to the basic sample (900 companies) characteristics. Certain imperfections could be found in a distribution of intervals for the attributes of companies. Each of the following sectors covers more than 12% of the whole sample of responders: construction, metallurgy and shipbuilding, retail, other manufacturing categories. Table 2. Company number of employees. < 50 50-100 100-250 250-500 500 and more 13 (22%) 9 (16%) 11 (19%) 10 (17%) 15 (26%) Table 3. Number of projects per year. 1-3 4-10 11-20 21-50 50 and more 13 (22%) 20 (35%) 12 (20%) 5 (8%) 8 (13%) Some of the most important characteristics of the sample companies and their projects are shown in Tables 2, 3 and 4. As it can be seen (Table 4b), the category of 4 to 10 persons involved in a project predominates. This is consistent with the theory of organizational knowledge regarding the attributes of groups for management. Table 4. Project size: (a) and (b) a) Average project budgets. million kn < 0.5 23 (40%) 0.5-1 10 (17%) 1-2 7 (12%) 2-7 9 (16%) > 7 9 (15%) b) Average number of persons involved in a project. 1-3 11 (19%) 4-10 32 (55%) 11-20 3 (5%) 21-50 6 (10%) 50 and more 6 (10%) The project size is connected with the complexity of project and these two factors are usually very influential in deciding about usage of PM software. 5. Results of data processing and comparative analysis In this survey, one important result is contained in the answer to the question Do you use specialized software tools (such as MS Project or Primavera) for managing projects? [23]. The obtained results for PM software use are lower compared to other recent researches, since PM support software is used in approximately 40% of projects. For example, in a survey among Croatian companies about 10 years ago, the established rate for supporting project management by using project management software was 59% [6]. In developed countries, some researches reported 97% respondents (in a survey of construction) used PM software during the previous year (2000) [17]. On the other hand, according to the same authors, in 1995 approximately 40% of construction respondents used PM software for all of their projects [17]. Table 5 contains results of survey data processing obtained by means of multivariate correlation analysis. 468

Table 5. Correlation values for PM tools use. Number of employees Number of projects Project budget Persons on a project r 0,49 0,46 0,44 0,45 The size of the company and other attributes of scale, which indicate the level of maturity of the organization, development of formalisms and other important structural and competitive features, are related to the practice of using PM support software. The non-use of the dedicated application software is related to a small number of employees in a company, small number of projects, low average budget and a small number of employees engaged in a project (Table 5.). According to another research [17], the most influential factors used by construction industry respondents to determine when to use and when not to use PM software are project complexity, size of project and software capabilities. Regarding these factors affecting the decision to use PM software, for size of projects in 61% of cases was recorded decision not to use, and in 73% decision to use, according to [26]. Project size and complexity attributes are related to: number of persons on a project, project budget, duration, number of activities. According to [25], in respondents description of limitations of the methods and tools in PM, the most frequently mentioned limitation was inadequate for complex projects. Nearly 80% of these cases referred to PM software. That is partly in contradiction with our results from table 6. However, the project sample from [25] was different from ours in terms of some aspects of complexity. Therefore, projects which involved more than 10 persons represent 57% of their sample, while in our research it amounts to 25% of the sample. Concerning project budget (Table 5.), research by Raymond and Bergeron [27] indicates that project success indicators most impacted by PM information systems are meeting deadlines and staying within budgets. Using PM software regarding the presence of some important roles within projects, particularly responsibilities associated with the overall control, is also positively correlated with project management software use. Higher correlations between PM software usage and attendance of project board, project manager and detailed phase plan were established. There is also a significant correlation (r=0.67) between the use of project management support software and the use of a standard project management methodology (PMBOK, Prince 2). 6. Conclusions and further research The derivative survey conducted among the leading Croatian companies showed that project management support software is used in approximately 40% of project cases. This represents a relatively low percentage, in comparison with [6] or [17], which indicates a lag in relation to the practice of developed world economies [17]. At the same time, regression analysis shows a high correlation between the use of PM software tools and simultaneous systematic implementation of standard project management methodologies (r = 0.67, [23]). While the other researchers ordinarily treated aggregative factors of PM software usage [17], [25], [26], [27], such as project size and complexity, our approach is to analyse PM software in relation to elements contained within these factors. These elements are project budget, duration, number of people, etc. According to our results, for PM software usage they are important as well as characteristic of the company size. Larger Croatian companies with substantial budgets, in which several projects are run simultaneously, mostly have developed practises of using PM support software. A particularly relevant finding of our research is the established significant correlation between number of employees, number of projects, its budgets, and number of persons involved in a project on one hand and the use of PM support software on the other (r (i) > 0.44, Table 5.). Further analyses and lines of our research worth exploring would be related to determining the relationship between the level of project management maturity (OPM3) and the practice of successful usage of particular PM supporting software tools. 7. References [1] Charvat J. Project Management Methodologies: Selecting, Implementing, and Supporting Methodologies and Processes for Projects. John Wiley & Sons; 2003. [2] Lewis JP. Fundamentals of Project Management. AMACOM Books, 1995. [3] Weaver P. Scheduling in the Age of Complexity. PMI College of Scheduling 469

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