Woman working on her laptop in a home office.
Project management software can help organize off-site workers or third-party contractors by supplying everyone with a central hub of your business's information. — Getty Images/ 10'000 Hours

Every business project has (what feels like) a million moving parts. You must assign tasks, request progress updates, and keep everything on schedule. Project management software streamlines your process and increases visibility. It organizes each phase on a single platform with task management, scheduling, and collaboration tools.

Small businesses use project management solutions to coordinate activities for client work or execute high-level company undertakings. Learn what project management software does and how it benefits your organization.

What is project management software?

Project management software is a digital system that centralizes project data, deliverables, and communication. It supports all stages of the project management life cycle, from conception to project close. The platform enables leaders to manage workflows and quality, coordinating everything from one virtual space.

[Read more: 6 Types of Project Management Systems for Small Businesses]

How do project management platforms work?

Some project management tools track one or two projects, whereas others handle dozens across different departments or business locations. The central hub holds project-related data and files, ensuring users access the latest version. Project management systems also provide logs and versioning functionalities, so leaders can see when and where changes occurred.

Many programs have built-in tools for real-time messaging, time tracking, and file sharing. They often provide workflow automation features, allowing users to receive alerts for overdue and completed tasks.

Project management software helps businesses with the following:

  • Assigning tasks.
  • Scheduling meetings.
  • Requesting updates.
  • Tracking billable hours and expenses.
  • Viewing and sharing files.
  • Reminding users of deadlines.
  • Seeing real-time project key performance indicators (KPIs).
  • Tracing file versions and seeing activity logs.
  • Monitoring task and project progress.
  • Establishing approval workflows.
  • Running project performance reports.
  • Understanding resource utilization.
  • Updating clients and stakeholders.
  • Estimating project costs.

With project management software, your team uses a central database, eliminating the need to transfer data to spreadsheets or emails.

Who uses project management solutions?

Many small businesses, including marketing agencies, construction firms, and service providers, use project management software. Most systems support multiple project management methodologies, like the Kanban and Scrum frameworks. Therefore, you can choose how to visualize data based on your preferred methodology or project role, from calendar or timeline views to Gantt or spreadsheet views.

Project management software works equally well for dispersed teams and on-site staff, thanks to the ability for anyone to access project information from the cloud. However, project management programs become necessary when businesses hire independent contractors and remote workers because they keep project information in one virtual space, as opposed to siloed emails, files, and spreadsheets.

[Read more: What Are Project Management Methodologies?]

How do project management tools benefit small businesses?

Project management software solves many problems, such as poor resource management, which PM Solutions noted “has been flagged as a top challenge in nearly every study we’ve conducted in the last 20 years.” Small businesses also benefit from automation features. According to Wellingtone’s State of Project Management in 2021 report, most respondents spent four hours to more than two days monthly gathering project status information.

With project management tools, you can automate status reports and view real-time progress from your dashboard. It also provides personal productivity and automation features for employees, helping them track time and deadlines.

Project management software helps small companies:

  • Reduce errors: Back-and-forth emails and multiple document versions can result in lost conversations or incorrect information. With project management software, your team uses a central database, eliminating the need to transfer data to spreadsheets or emails.
  • Increase accountability: Users benefit from versioning control, task management features, and automated reporting. Each activity is tied to an individual or team. Employees can request an extension or assistance while in the program, and an activity log tracks changes and updates.
  • Stay within your budget: After setting billable and nonbillable rates, leaders can see real-time costs and use forecasting tools to estimate the total. Some services let users add expenses, increasing visibility into all factors affecting profitability.
  • Improve communication: Users coordinate and collaborate within the project management system, meaning fewer emails and off-site communications. This lets teams see their conversation history and add notes or tasks without leaving the platform.
  • Standardize processes: Developing business systems keeps everyone on the same page and helps leaders see how results differ among projects. Project management software supports workflow and process management while ensuring employees use the same time-tracking, file-sharing, and expense-reporting tools.
  • Get actionable insights: Learn lessons from every project by reviewing KPIs and metrics on dashboards and reports. Project management tools can show your time or budget estimates versus actual figures.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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