Why are businesses investing in online project management?

Products like Basecamp are designed to help people manage projects through a Web service.
©2008 HowStuffWorks

Anyone who has ever been in charge of a major project knows that keeping everything organized and on track is a big responsibility. Not only do you have to make sure tasks are completed on time, but also you have to document your progress in case something goes wrong later. Whether the project involves physical labor or dealing with electronic files and records, you need to understand project management.

In the good old days, people had to keep everything organized by hand. They'd use logbooks, calendars and paper files to plan, execute and document all the phases of a project. That meant they'd have to create a lot of paperwork, then find a place to store everything. To complicate matters, some companies have strict policies about keeping records for many years. It could be a challenge just to maintain an organized records system.


Today, project managers can take advantage of tools and software that reduce the amount of paperwork and space they once needed. Recently, some companies have migrated their project management tasks to the Internet. They use online project management systems to stay organized and keep everyone working on a project informed and on task.

Online project management systems have several native advantages over traditional project management approaches. For one thing, such systems include applications that handle much of the work. Although there are dozens of different systems on the market, almost all of them offer several services in common. In general, these include electronic filing systems and scheduling applications.

Most online project management systems allow any authorized person connected to the network to check the status of the project. The system centralizes all the information in a location that can be accessed easily by others. Since many companies have multiple offices in different countries, this comes in handy.

What exactly do these systems do? Find out in the next section.


Basic Online Project Management Functions

Zoho offers a suite of Web services, including online project management products.
©2008 HowStuffWorks

The purpose of an online project management system is to organize and simplify projects from start to finish. With that in mind, there are several basic functions that almost every online project management system has:

  • Organizational systems keep track of files and documents. Most allow users to customize the filing system. For example, you might want to create a master folder for each project and subfolders for the different phases of those projects. The goal of the system is to make it easy to find any single piece of information in a project, no matter how complex that project may be.
  • Document management tracks document modifications, including the identity of the person who changed the file. Many systems archive older copies of files rather than delete them.
  • Scheduling is another key feature for most systems. Whether it's a centralized calendar with to-do lists or an automated schedule of e-mails to keep everyone informed and on task, scheduling plays a big role in project management. Many systems include streamlined features that let managers keep track of who's doing what and the project's progress as a whole.
  • Time tracking is also important for many companies. With this function, software keeps track of how much time people spend working on each part of a project. Many companies bill customers based on how much time was spent on a particular project. Others might pay employees at an hourly rate. Time tracking applications let the company keep tabs on how many hours each person in the project has worked on various phases of the project.
  • Documentation functions keep a detailed history of projects, which can help protect a company from liability. For example, let's say a construction company gets a request to build a house. The client makes a change to the house's design early in the project. The construction company makes a note of the client's requests and documents it using an online project management system. Later, when construction is complete, the client expresses dissatisfaction with the way the house looks due to the changes in design. With the documentation feature, the construction company has a record that can help it prove that the changes were at the client's request.
  • Issue tracking lets users create a file to report any problems or issues that crop up during a project. These applications have a feature that e-mails the appropriate parties so that the issue can be resolved as quickly as possible. Once someone fixes the problem, he or she can note it in the issue report. The system then files the report as part of the documentation function.
  • Communication systems might include a message board, instant messaging program, chat room or some other communication forum. Including a message system within the overall system makes it easier for people involved in the project to pass information along.

There are two major approaches to online project management software -- client/server systems and Web application systems. What's the difference? Keep reading to find out.



Approaches to Online Project Management

A screenshot of Goplan's project management application.
©2008 HowStuffWorks

One way to implement an online project management system is to create a client/server architecture using an intranet. Unlike the Internet, which is the internetworking of computer systems around the globe, an intranet is a privately owned and maintained computer network. Intranets and the Internet use the same protocols, which are sets of rules and procedures, to send and receive information. In a way, an intranet behaves like a miniature Internet. It might connect all the offices within a company together, but it usually has very limited access points to computer networks outside the company.

In such an approach, centralized servers store the system's management software. Employees access the software through networked computers, which in a client/server system are the clients. Some systems require that people store part of an application on each client in the system. Others store all the programs on just the servers.


One advantage of this approach is that it's almost completely an internal system, which makes it more secure. While it's still possible for a creative hacker to gain access to an intranet, it's not as easy as hacking into a system connected over the Internet. Another advantage is customization. Project management system providers who use this approach can sometimes tweak features and functions to better suit a particular customer's needs.

The client/server approach works well for companies that focus mainly on internal projects. If there's a need to collaborate with other people or organizations, such a system might not work as well. If the other person or organization uses a different system, the two systems may not be compatible. Many companies are also cautious about allowing external entities access to their intranets.

An alternative to the client/server approach is a Web services online project management system. In this approach, the project management service provider hosts software as a series of Web services on the Internet. Customers log into the system remotely from any Internet-connected computer. This gives customers more flexibility -- they can log on from work, home or anywhere else that has an Internet connection. It also makes it easier to collaborate with other people and companies. Since a third party stores the applications and information, companies don't have to worry about opening up their own intranets to outsiders.

The WebAsyst project management service offers free accounts.
©2008 HowStuffworks

On the other hand, entrusting sensitive and critical information into the hands of a vendor makes some people nervous. Internet security is a growing concern for everyone online. Providers must prove they are secure and trustworthy. Otherwise, no one will want to use their services. Most services use various forms of encryption and password protection to minimize the risk of a security breach.

As companies look for more ways to consolidate and offload computing services, online project management and related techniques will become more prominent in the market. Of course, these systems will only be beneficial if customers use them properly. No one should look at these systems as a magical solution to any problem.

To learn more about online project management and other subjects, take a look at the links on the following page.


Lots More Information

Related HowStuffWorks Articles

More Great Links

  • Feldman, William and Feldman, Patti. "Manage projects and documents online." Contractor Magazine. Aug. 2004.
  • Phair, Matthew. "ASP or client/server: Which online project management tool is right for your firm?" Information Technology. May 2007.
  • "Project management -- the tools." Building Design & Construction. Aug. 2001.
  • "Web Collaboration Supports Project Management." Lodging Hospitality. Jan. 2004.