Pricing for PPM Tools is on the Rise

By Kristian Tuinzing

Director of Client Services, NPI

September 08, 2021

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Project Portfolio Management or PPM software has always been a mainstay of enterprise IT. Interestingly, pricing for these solutions is on the rise according to pricing data NPI tracks across clients of that are $1 billion or more in turnover. It seems what was once a minor spend concern is steadily becoming a major recurring annual investment in many cases.

The trends driving this uptick in pricing range from pure market momentum to broader changes in the enterprise IT ecosystem. Many tracking this sector of software saw the total PPM market come close to eclipsing $5B in 2020. With expected CAGR in the range of 6.5 to 10 percent, its expected to hit $10B by 2027. Established PPM solutions have pushed the adoption of SaaS and cloud-native solutions heavily, a main source of recent increases on a per license basis.

Meanwhile, changes brought on by the pandemic that caused a surge in PPM adoption have also stayed in place, with many teams standardizing on one or more of the leading solutions on market. PPM tools are also increasingly becoming integrated with other major systems like ERPs or those tied to ALM efforts. Many see hosted tools being a more important consideration, but there can be high costs associated in moving to some of the leading vendors.

With all of this in mind, NPI recommends enterprises closely evaluate current PPM pricing with particular focus on a few areas. Keep in mind, in many cases, effective PPM reviews can take several months or even up to a year given how embedded these systems can be to core operations within an enterprise.

Take Inventory of All PPM Software Usage

In larger enterprises, it’s normal to see multiple PPM tools in use across different departments, even pushing into the double-digits due to acquisitions and cloistered preferences that are difficult to shake.  Standardizing on a handful of solutions is ideal, but it’s normal to have more than a few in use across the organization. However, this also makes it important to confirm that licensing matches actual usage.

Taking a full inventory is an important step in getting a “lay of the land” to determine per user costs for different PPM solutions in use as well as total dollars allocated to them. It can also help set goals for standardization (moving from 10 to 5 tools, for example).

Track and Challenge Increases to Legacy Pricing

Once an overview of in-use PPM software is established, you can begin tracking how charges have evolved over time. One trend NPI sees first-hand as we analyze purchases for our clients is a clear increase in per license pricing across many of the leading PPM tools. Much of this is related to new features, integrations with other software systems, and the move to SaaS or fully hosted cloud solutions. The trend towards cloud-native PPM tools is alluring, but the top vendors can quickly increase pricing if they know their solution is overly favored, as they become integral to teams using them after being deployed for a period of time.

Keep Competition Involved

The prevalence of using multiple PPM tools in IT ecosystems can be a piece of leverage as well, as it means that credible competitors are likely present. Positioning these alternative solutions and emphasizing that cost is as much of a piece of decision criteria as function is important.

The enterprise PPM software market is still one of the more fragmented IT spaces, and with that fragmentation comes significant pricing disparity between customers. NPI recommends performing detailed IT price benchmark analysis on purchases that enterprises plan to make with any of the following vendors: Smartsheet, Wrike, Micro Focus PPM, Planview, AirTable, Aha!, Atlassian, Planisware, VersionOne, Workfront, and of course Microsoft Project. In most cases, the savings opportunity uncovered during this analysis is material.

Interested in learning more about IT price benchmark analysis for PPM software? NPI can help.