Shorter time-to-market, higher product development efficiency, better product quality, and lower product costs are often associated with the benefits of adopting product lifecycle management (PLM) systems. When there is an economic downturn, these benefits seem to be more desirable. However, a recent poll (CIMdata Online Polls, presented near the end of CIMdata PLM Industry Summary, 28 May 2010) shows that ten percent of poll participants thought that PLM couldn’t really help tackle economic downturns. I totally agree with CIMdata that this result indicated an awareness issue—current and potential PLM users are not always on the same page with PLM vendors and advocators. Besides this, I felt that some of the ten percent who responded might speak about the real experiences they had with PLM. With the economic downturn in mind, below are a few points I can think of:
PLM is too complicated.
Actually, the concept of PLM is quite simple. In CIMdata’s definition of PLM, the first thing it says is that PLM is “a strategic business approach that applies a consistent set of business solutions that support the collaborative creation, management, dissemination, and use of product definition information.” However, when the concept comes to the software solution level, it becomes very complicated. A quick example of the complexity is the functional components of today’s PLM system—looking at the list of functionality modules of some mainstream PLM solutions will create headaches for many PLM seekers.
You may be asking yourself: Doesn’t an ERP have numerous functions and features? Answer: Yes it does, but the difference is that in ERP, functionality is usually grouped in modules along with main business functions whereas in PLM this is not always the case. Due to the collaborative nature of PLM, it is more difficult to determine the ownership of data and processes within the system, keeping many product stakeholders distant in the early stage of PLM adoption. When there is an economic downturn, this becomes more of an issue because after downsizing, those who remain with an organization have less time to learn PLM as the methodology and PLM as a software solution in order to get acquainted with PLM.
PLM is too expensive.
Comprehensive PLM solutions are expensive (Aras Innovator might be the only exception). However, people do buy expensive things from time to time, as long as the value of the money you spend can be justified. That being said, the price issue is the difficulty of calculating return on investment (ROI) for PLM adoptions. Without a doubt, PLM helps generate quick results, but many other benefits that PLM can bring to the table are not quite directly measureable and can only be seen long after the implementation is completed. You may find some PLM ROI calculation tools from people who want to sell you PLM software or services, but I personally doubt that companies will be convinced to move to PLM after the calculation—especially when they are facing serious financial stress.
PLM takes too long to implement.
If a PLM implementation takes as long as the length of a recession, then it is too late for you to start your PLM initiative hoping it will rescue you from the economic hardship when it’s already there. Companies’ unique product development processes, integration issues, and exclusive expertise associated with the solution you’ve chosen all require patience to establish a competent PLM system.
PLM is a mighty decoction that fights many serious diseases, but it requires a complicated recipe, expensive ingredients, and a long time to boil. If you need a solution that’s lightweight, cheaper, easier to implement, and will give you quicker results, downgrade your focus to product data management (PDM)—the PLM predecessor that contains some essential PLM functionality such as data vaulting, change management, bill of materials (BOM) management, and classification. PDM doesn’t do everything that PLM is capable of, but it covers the base foundation of PLM and is the necessary road to PLM. That’s why at TEC, we call PDM core PLM. To help you get started with PDM, below are some resources you can find on our site:
Kurt, I agree with your points. Especially the one is about PLM implementation time. If you start to implement PLM during the downturn, you probably will be in production in 1-2 years to see benefits. This is a really bad implementation schedule.. I figured this in my last post related to main customer concerns related to PLM - http://plmtwine.com/2010/06/01/top-five-concerns-about-plm-systems/, Best, Oleg
Thanks Oleg, for you comments. I totally agree to your points in the post you recommended. To your last concern, TCO is a huge issue that PLM (and some other enterprise applications as you said) needs to address. In other words, people need better ways to justify the investments they are about to “bet” on their PLM engagement.
It’s been interesting to watch the buzz about PLM vs PDM over the last 10 years. As a PDM vendor, we work with many large companies who turn to us because we are affordable, fast to implement (2-4 weeks) and the ROI is realized in months not years.
So, I’m always interested to see when PDM is actually pitched as a viable solution and as a stepping stone to PLM.
All the best,