According to Gartner research, collaboration software is growing in popularity among enterprise businesses. It’s so important, in fact, that it’s considered a critical capability that enterprises should prioritize when evaluating a new project and portfolio management (PPM) software.

But what about small and midsize businesses (SMBs)? Is collaboration technology just a pie in the sky?

At Software Advice, we don’t think so. We have been working extensively with SMBs to understand business needs and help them make better buying decisions. In this post, I’ll explain the benefits of SMBs investing in collaboration tools and share some key findings regarding the tools teams prefer to use when collaborating on projects.

Why Collaboration Software Matters

Simply stated, collaboration tools can have a huge impact on employee productivity because the alternative, email, is wildly ineffective.

In one Software Advice study, 23 percent of project teams report email to be a major pitfall in successful workplace communication.

A study by McKinsey found that a mere 39 percent of an employee’s workweek is spent on role-specific tasks. The remaining 61 percent gets eaten up by the time spent with their inbox: reading and answering emails, searching for information and trying to connect with coworkers.

In fact, McKinsey estimates that by implementing collaboration technology and encouraging workers to use those tools instead of email, companies can potentially increase employee productivity by 25 percent.

Why The Right Collaboration Software Matters More

Ok, so now that you know why collaboration tools are important, let me tell you why it’s important for SMBs to invest in the right collaboration tools.

We surveyed project teams across the U.S. to find out what tools they prefer to use when collaborating on projects and what features have the most impact on productivity.

Overwhelmingly, respondents say they prefer to collaborate within their project management (PM) system rather than using standalone tools.

Project Teams’ Preference in Collaboration Software
Source: Software Advice (What Teams Want)

While specialized tools, such as a content storage system or a chat tool, can solve a singular need, a full-featured project management (PM) solution can meet multiple needs at once.

This finding tells us that it would be more valuable for SMBs to invest in a PM platform with collaboration features rather than in several, standalone tools. Then, if they find they need to boost a specific function, they can use specialized tools to supplement their existing system.

The collaboration capabilities respondents found most impactful on productivity, which SMBs should look for when evaluating PM systems, include:

  • Chat (27 percent)
  • Document management (20 percent)
  • File sharing/storage (20 percent)
  • Activity feed (19 percent)
Must-Have Collaboration Capabilities
PM software features
Source: Software Advice

How PM Collaboration Technology Can Benefit SMBs

The following are just a few examples of how SMBs can benefit from using PM collaboration technology:

Lower operational costs: PM suites typically perform several functions, such as task management, communication via chat or video conferencing as well as document and content management. Purchasing individual tools that specialize in these areas can be expensive so investing in a fully-featured PM platform with collaboration capabilities can help cut costs.

Helps maintain a competitive advantage: The mobile workforce is growing at a remarkable rate. Research from Global Workplace Analytics indicates that the U.S. mobile workforce increased by nearly 80 percent between 2005 and 2012, and our findings indicate that PM collaboration technology can help create a structured work environment for remote and office employees alike.

Tracks changes and increases accuracy: Schedules, tasks, conversations surrounding key changes to projects—all this information is centralized in a single location and updates in real time. This increases transparency and helps keep everyone on the same page.


Collaboration technology isn’t out of reach for SMBs. The results of our research show that not only can SMBs “get by” with the collaboration capabilities found in many PM systems but that most project teams actually prefer that over using disparate tools.

To make sure you’re reaping all the benefits collaboration software can offer, be sure to look for PM systems with collaboration capabilities that have the biggest impact on productivity, such as chat, file storage, and an activity feed.

If you’d like to learn more about collaboration technology or our tech trends research, you’re welcome to visit Software Advice’s project management resource hub for greater detail.

Eileen O’Loughlin

Author: Eileen O’Loughlin is a project management Market Research Associate at Software Advice, with a focus on collaboration tools. She joined the team in 2015 and also covers the accounting, project management, legal management and professional services markets.

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