We're told that online procurement and project management is essential to running an efficient job. But is it? And if so, which is the best provider? Luckily, we found a company willing to spill the beans …
Do project collaboration packages really save money? And if they do, which provider is best? A report recently published by e-business consultant Compagnia provides answer to these questions. It surveyed more than 100 users and suppliers of project collaboration software and found that the systems could reduce the industry's costs by at least 4.28% – that is, five hospitals and 3000 homes a year. It also ranked each service provider's product, giving them marks out of 10.

The report gave figures for the total cost of using project collaboration services, too. It said rental costs of the software varied between 0.2% and 1% of project value, and that the costs of training, IT and system management added a further 0.15% to that. Project collaboration software is even more cost-effective on large projects because it creates an economy of scale. In addition, the increased complexity and risks of large projects means effective communication becomes even more critical.

The benefits of collaboration software are not confined to costs. Senior managers awarded the services a score of 8.48 out of 10 when asked whether they provided operational benefits. Relationships were improved, too; 74% of users said client and supply-chain relationships were considerably improved, and the remainder said there was an improvement.

These benefits mean project collaboration services are the way of the future. The report estimates that only 20% of large projects, and 5% of medium-sized projects are currently using it. But by next year, this will jump to 38% and 13% respectively, and in 2007 the report estimates that the software will be used on 95% of large projects, and 65% of medium-sized ones.

The structure of the service provider industry is also expected to change. Compagnia believes that there are too many providers in the market, and estimates that every six months one will drop out. The clients of the failed providers will be taken over by an existing player, who will progressively move them onto its own system. The company predicts that the market will stabilise when there are three providers.