What Is Project Management Software: All You Need to Know

Looking for the project management software definition?

This article will cover everything your need to know: from what is project management software and its key features, to benefits and challenges, ending with an overview of some of the most popular project management solutions.

Key Takeaways

Project management software is a digital tool, usually cloud-based, designed to help teams plan, execute, and monitor projects.

The essential features of project management systems are aimed towards supporting project teams as they manage project activities, such as deadlines, tasks, and collaboration.

Project management software tools can be used in a variety of companies, including:

While project management apps can be used by companies in various industries, different businesses usually focus on different benefits of project management (and look for specific features that support them):

They can have some specialized needs, such as supply chain management. The type software they need usually differs drastically from most professional services companies (which this article focuses on).

So, how do we categorize these different types of project management platforms?

Here’s a overview:

Note: These terms are used for the purpose of simplifying tools according to their range of features.

You might also come across definitions such as professional services automation software or agency management software for advanced project management. Here’s a PSA guide to learn more.

Most businesses start their management in Excel. While spreadsheets are a staple and you’ll likely never phase them out completely, they’re not suitable as a replacement for specialized task scheduling and project management software — and they’re usually not all that visually appealing.

This is the simplest type of project tool. It’s designed with user-friendliness in mind, and can be used by the most inexperienced users. Its main features are individual task coordination, but it may not provide comprehensive project oversight or control over multiple projects.

A step up from task management tools, these solutions offer additional features for managing project performance: automation, customizable views, time tracking and sometimes budgeting.

Agency management software, or advanced project management software, combines additional features that provide direct benefits for businesses, such as CRM, overhead and expense management, resource planning, and in-depth reporting.

You can skip to our overview of popular cloud-based project management tools to find out which tools are the best in each category.

Let’s explore some of these key features in more detail, including what specifically to look for.

Collaboration features enable team members and other stakeholders, such as clients, to communicate and share updates.

This can include:

Automation is a relatively new feature, but it’s something that sets apart older legacy tools and modern cloud-based project management tools. It can include simple features that streamline repetitive tasks, such as:

A more advanced version would be creating custom automations. This lets you automate processes which are specific to your business, making it more useful than generalized automation.

For example, a task update can send a message to a specific Slack channel. Or, you can set up for an invoice to be created after a budget is marked as delivered.

Speaking of new features, AI is even more recent than automation, but it has been already been adopted by a range of software solutions.

A frequent application is to use it alongside documentation management features, so you don’t have to go to a separate system to generate your text (see Productive AI). However, it can also have other capabilities, such as summarizing tasks or creating filters.

Customizable project views allow software to be adapted to a company’s specific needs. More than than, it lets project managers and individual team members tailor their experience with tracking project progress to personal preferences. Allowing for this kind of flexibility in how to organize projects can support adoption, which usually leads to better results overall.

Some core views include:

Time tracking is a no-brainer feature, but its specific implementation can differ from tool to tool. It’s useful for a tool to offer multiple ways of tracking time to accommodate for different needs, such as a timer and manual entry.

Distinguishing between billable vs non-billable hours is also important, as well as some features for monitoring and editing timesheets for accuracy, ex. timesheets locking.

Certain solutions offer activity tracking and screenshots. These solutions are usually not very popular with users, but can have value when working with mostly remote teams or freelancers.

Budgeting and billing are more advanced features.

Some software may offer a simplified version of budgeting (without detailed overhead and expense management), while others might cover it through third-party integrations. Task and collaboration-based software usually don’t offer it at all.

What does it usually entail?

Another useful feature includes integration with popular project accounting software.

Even advanced project management tools can’t cover all of the features of specialized tools, so an integration is valuable for bringing your toolstack together.

Xero and QuickBooks are popular solutions, so check if your software offers these integrations.

Resource planning features provide a big-picture overview of your projects and resources. They enable better workload management, which can affect overall project and team performance.

Capabilities to look for include:

Some resource planning features also include forecasting. This means that your software can predict your future metrics based on scheduling, to enable data-driven decisions.

This is usually considered an advanced feature, and you’re not likely to see it outside specialized resourcing software or all-in-one platforms.

Finally, reporting includes all of the features above.

Naturally, its robustness usually depends on how comprehensive the tool is — for detailed insights, you’ll want to invest in a single platform that covers time tracking features, task mangement, resourcing, and budgeting.

Other important features include:

Project management software helps project managers track project progress and task assignments in real time.

This increases efficiency and overall oversight, but also provides important data for improving decisions on managing future projects. Other benefits include better communication across cross-functional teams and client communication.

Additionally, here are some tangible benefits realized by different types of companies:

According to a project management software user research by Capterra, the top challenges associated with integrating project management software include:

Let’s discuss this and other challenges in more detail:

Many teams underutilize features, relying only on task tracking while neglecting analytics, automation, or resource planning capabilities.

This can reduce the tool’s overall impact, leading to inefficiencies and missed opportunities for process optimization.

The best way to get the most out of your software is to establish a good relationship with your provider. Use all available opportunities for one-on-one sessions and onboardings.

Another tip is to select a software champion who will be the main point of contact between your team and the software provider.

This person should also be the main source of information for your employees, which ensures that people know who to contact and provide feedback to during the implementation, testing, and learning phases.

Most project management software provide a certain level of structure into your workflows.

While there are fully flexible solutions, these usually require extensive time investment and technical knowledge to set up, which might not be ideal for all businesses — check out some relational databases if you want to learn more.

The best way to prevent issues during the implementation phase is to ensure that the software you’re researching can be adapted to your needs, without assuming what certain functionalities can or can not do.

However, sometimes adjusting your workflows slightly to the software might even be the right way to go.

Basic tools often fail to handle complex projects, leading to reliance on supplementary systems like spreadsheets or different specialized solutions.

This can lead to extra expenses, bloat in your techstack, and ultimately inefficient processes.

Businesses might decide to use underfeatured tools due to the higher price point of integrated solutions. But consider the cost of your time and energy when you’re implementing separate solutions and trying to make them work together.

Another thing to consider is scalability.

Tools that aren’t being updated usually can’t manage growing project demands. And switching to different software down the line means that you’ll have to manage the implementation and onboarding phase all over again.

This is why it’s essential to choose software that aligns with both current and future needs.

Sometimes it’s not you, and certain tools can simply be too complex. The terminology can be specific, or perhaps the user interface is set up in an uinintuitive way.

Or, perhaps the features are great, but if the interface is overwhelming or gray, it can discourage use, especially for users that are less used to working with software.

To gauge complexity and user interface, you can do the following:

To summarize the conclusions above:

Other factors include pricing, feature sets, integrations with other tools, and data migration processes—you can check out our comprehensive article on how to choose project management software to learn more.

Here’s a brief overview of project management tools based on our prior categorization:

Productive is a powerful tool for professional services agencies and businesses of all shapes and sizes.

Its biggest benefit is that it integrates the functionalities of various tools and apps into one platform, so you can manage workflows in one place.

With Productive, you can:

Learn more about these three software solutions for project management.

A project management software solution is designed for managing communication, people, documents, and budgets for the purpose of achieving project goals.

Companies can realize various benefits from these tools, but they’re also likely to come across different challenges and roadblocks.
With so many project management tools available, it’s essential to evaluate your organization’s unique needs, workflows, and goals before making a decision.

Productives offers an all-in-one solution for agencies and businesses looking to integrate project management, budgeting, and resource planning under one roof. You can book a demo here.

For other project planning software, you can check out our list of the top software for professional services providers.