target audience: TECH SUPPLIER Publication date: Jun 2024 - Document type: Market Forecast - Doc Document number: # US51141624
Worldwide Project and Portfolio Management Software Forecast, 2024–2028: Optimizing Experience-Oriented Business with GenAI and Strategic Execution to Grow PPM CAGR
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Abstract
This IDC study provides a 2024–2028 forecast for the worldwide project and portfolio management (PPM) software market, which grew 13.3% to 6.5 billion in 2023 (from 8.0% growth to $5.76 billion in 2022 in current currency). We see uptake and rapidly evolving adoption of artificial intelligence (AI) and ML, including generative AI (GenAI), and significant uptake of PPM in the cloud, which will continue throughout the forecast period. This growth is noteworthy in an unpredictable, challenging, and dynamic market. Decision-making in volatile financial and geopolitical environments demands effective prioritization; the radical shift to flexible, adaptive work and digitization demands commensurate management and governance of resource, programs, and portfolios for global enterprises, along with agile value streams. We saw high engagement of revenue growth from major and key innovative smaller PPM vendors in 2023, with few exceptions, which sets the stage for high growth numbers for the forecast. We expect this will continue with digitization and a shift to experience-orchestrated business models, by leveraging automation and adoption of new AI and GenAI models, to scale with intelligent context while prioritizing data from trusted sources. The increasing role and complexity of sourcing for projects, programs, and portfolios in the enterprise and the need to align with business needs and corporate governance and regulatory requirements with hybrid work have combined to retain growth for PPM as the global economy shifts with higher engagement remain in flux with volatile worldwide politics. IDC has seen increased alignment of strategic PPM with enterprise resource planning (ERP) (including professional service automation [PSA]), the evolution and rapid uptake of SaaS PPM, increased coordination with application life-cycle management (ALM), and agile value stream management (VSM). High double-digit growth driven by collaborative work management is exemplified in vendors such as Smartsheet, Asana (both with revenue in the team collaboration applications market), monday.com, and Adobe Workfront. Agile and service management vendors have been leveraging PPM and PSA through alliances, integration, organic development, and/or acquisitions. This continued to have an impact in 2022 and will play a role in market growth through 2024–2028 (exemplified in the recent acquisition of Tasktop by Planview in 2Q22 and ConnectALL by Broadcom in 2Q23). We expect PPM in that time frame to also play a synergistic role increasingly with new product development and the evolving Internet of Things (IoT) arena as well as governance for DevOps as organizations must increasingly coordinate software deployment from inception to deployment and service management (with an increasing range of platforms on which to deploy — from mobile, social, and cloud to "things").
"Global 2000 organizations continue to struggle with the complexity of project, program, and product delivery while seeking to manage economic and political volatility as operational and business needs change dynamically with competitive, technology, and geopolitical disruptions. The emergence of generative AI and other AI and ML capabilities are already dramatically impacting the space moving into 2H24, bringing significant benefits and analytics opportunities and also risks (with a need for governance, judicious adoption, and proactive usage and engagement). All of the 19 vendors evaluated in IDC's recent four-part IDC MarketScape series — which provided separate analysis for strategic portfolio management (SPM), VSM/agile PPM, collaborative work management (CWM), and cloud PPM — announced and/or shipped GenAI capabilities in 2023 moving into 1H24," said Melinda Ballou, research director, IDC's Agile ALM, Quality, and Portfolio Strategies Service. "We are seeing a transition to experience-orchestrated business models enabled by automation and GenAI to scale and help contextualize business intelligence for business prioritization and execution. We have also observed acquisitions and close partnerships to augment capabilities and IPOs in the SPM, PPM, and CWM areas during the past 18 months through 1H24 as a result. Agile management of human, financial, and other resources is key. In response, demand will remain ongoing for PPM tools across the PPM segments ranging from SPM, IT PPM, CWM, VSM, professional service automation, and new product development to capital projects and engineering and construction. Smaller vendors will play a core role in product and market innovation, including CWM, PSA, and agile, value-centric planning, and differentiated PPM solutions will come into play in that context as further consolidation and product evolution occur. With high growth already seen in 1H24, we therefore expect for this relatively mature market an increased CAGR of 13.1% for the 2024–2028 forecast period to reach projected revenue of $12.1 billion."