Worldwide Project and Portfolio Management Software Forecast, 2023-2027: Strategic Planning, Collaboration, and AI Enable Dynamic Growth

This IDC study provides a 2023-2027 forecast for the worldwide project and portfolio management (PPM) software market, which grew 10.0% to 5.6 billion in 2022 (from 11.2% to $5.1 billion in 2021 in current currency). We see uptake and rapidly evolving adoption of AI and ML, including generative AI, 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 hybrid 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 2022, with few exceptions. 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). Significant growth driven by collaborative work management is exemplified in vendors such as Wrike, Smartsheet, Asana (with revenue in team collaborative applications), 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 2023-2027 (exemplified in the recent acquisition of Tasktop by Planview in 2Q22 and ConnectALL by Broadcom 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 emerging from the pandemic and geopolitical upheaval. The emergence generative AI and other AI and ML capabilities are already dramatically impacting the space moving into 2H23, bringing significant benefits and analytics opportunities and also risks (with a need for judicious adoption and usage). We saw both acquisitions and IPOs in the PPM and collaborative work management (CWM) areas during 2020 through 1H23 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 IT PPM, collaborative work management, agile PPM, and value stream management, 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 1H23, we therefore expect for this relatively mature market an increased CAGR of 13.6% (up from prior estimates of 9.6%) for the 2022-2027 period to reach projected revenue of $10.7 billion," says Melinda Ballou, research director, IDC's Agile ALM, Quality, and Portfolio Strategies service.