Would you like your software à la carte or in an integrated solution?
IT program management software can be purchased as stand-alone
packages to do a specific function – such as Microsoft Project, which
is widely used to do PERT/GANTT style task charts for a variety of
projects-- or in integrated solutions that do many of the following
tasks:
· scheduling
· time-and-billing
· project planning & management
· contract or ‘engagement’ management
· resource management
· skills assessment
· proposal development (especially cost data for the
bidding/purchasing process)
· forecasting
· program profitability analysis
· knowledge management
· performance management
· training
There are stand-alone applications for each of these segments.
Microsoft Project are Goalsmith two examples of project management or
scheduling software. However, as with other business-oriented
software, the large companies in this market are putting many of the
above functions together. These combined solutions are generally
referred to as Professional Service Automation (PSA) because similar
project management issues face information technology (IT)
professionals, engineers, architects, management consultants and
lawyers.
Many of the analysts tie what is happening in the PSA market to what
has happened in other corporate software markets such as Materials
Requirement Planning (MRP) or Enterprise Resource Planning (ERP). Not
only do they believe that the structures of the markets are similar,
but many traditional ERP or MRP companies, such as SAP, have entered
this market.
Three firms have been active in tracking the PSA market since the
mid-1990’s – Aberdeen Group, Gartner Group and International Data
Corp. (IDC). Aberdeen Group has recently released its 2002 analysis,
done again this year by David Hofferberth. The report, Professional
Services Automation: Technology-Enabled Integration of People,
Process, and Capital Assets is consistent with past research, judging
the market to $810 million (2002), with a growth rate of
approximately 40% in 2002 and are pushing the market towards $1
billion total revenue by 2003. The U.S. market is about 70% of the
total market share.
The leading users of PSA products has been IT consulting firms, which
will have more than 6 million employees worldwide by next year,
according to Aberdeen. Among IT consulting firms, those with more
than 100 consultants have been the earliest adopters.
Aberdeen Group’s report on PSA, released at the end of July, 2002 is
here:
http://www.aberdeen.com/ab_company/hottopics/psa2002/default.htm
Aberdeen has done other interesting work, including surveying the
end-users about these types of applications:
http://www.aberdeen.com/ab%5Fcompany/hottopics/psa2001/default.htm
International Data Corp. believes that the worldwide PSA market is
about twice the size, at roughly $1.9 billion. The differences are
largely due to the difference in measurements – with Aberdeen
measuring the revenues of the leading PSA software companies and IDC
measuring what customers are spending. The costs of systems
integration – or installing a PSA system – can be several times the
licensing fees paid to the software company. Growth rates between the
two companies’ measurements are similar, with IDC predicting a 34%
growth rate over 5 years:
http://www.idcresearch.co.nz/Newsletters/ASP_news/aa20010405.htm
This is an outline of the above report from IDC, listing major
vendors.
http://www.idc.com/getdoc.jhtml?containerId=23850
Gartner Group refers to this market area as “service process
optimization” but is referring to the same market profile. Gartner
Group’s Ted Kempf has said that revenues were $270.5 million in 2001
but could reach $11.9 billion by 2006. (A search strategy at
www.gartnergroup.com for available research should use the term ‘SPO’
to get the best results.)
Several companies are perceived to be leaders in this very fragmented
business, including Novient, Portera and Changepoint.
An interesting Gartner note on market participants and their
positioning is on the Niku website. Niku is a PSA supplier that has
emphasized accessibility of its products via Internet browsers:
http://www.gartner.com/reprints/niku/108537.html
It’s a very interesting marketplace because of the rapid growth – and
segmentation – of computer software. It has made managing technology
and its deployment complex, but brought interesting new tools to
market.
I managed marketing for a start-up in this marketplace for several
years. The most-surprising aspect was how poorly automated the IT
consulting firms were. Though all were engaged to bring competitive
IT products to the market, most still billed their customers manually,
via fax or U.S. mail! |
