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Selecting PLM Software Solutions Vendors Part 3 - A Timesaving Solution

Written By: Predrag Jakovljevic
Published On: May 24 2003

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Executive Summary

Past experience shows us that the vast majority of enterprise technology evaluations run over time and budget, and once selected, the majority of the implementations fail to meet functional, return on investment (ROI) and total cost of ownership (TCO) expectations. Many companies have consequently been stuck with under-performing software products and dejected users, and are still unable to gauge their system to determine how far they are from the ideal solution for their business requirements

Enterprise technology selections for ERP, CRM, SCM, and other enterprise applications provide valuable lessons that can be applied to selecting PLM (Product Lifecycle Management) software, but there are some key differences that need to be recognized. In PLM, there is no single vendor that can meet all of the requirements, and the market is still immature, so almost every product can be the right solution provided a certain set of requirements. The Catch 22 for both buyers and vendors is to pinpoint the right opportunity in this ongoing "dating game".

Selecting a piece of enterprise application software has never been an exact science. Vendors' hype, consultants' potential conflict of interest and consequent bias, users' doubts, tediously long selection processes, and unclear decisions rationale are some of the unfortunate watchwords for the selection practice so far.

It is daunting for corporate IT buyers to discern the true capabilities, strengths and weaknesses of a given enterprise application suite, given the propaganda that pervades vendors' endeavors to differentiate themselves (see Beware of Vendors Bearing Solutions). When making strategic IT acquisitions, buyer's project teams, inundated with an abundance of available products and technologies, have a difficult time translating the content of glitzy marketing slides and grandstanding presentations into the deliverable products. Given the relative immaturity of the PLM movement, this problem can be compounded by user's lack of understanding of their business needs and documentation of the associated software requirements.

In Part One of this article, we discussed the lessons learned from previous enterprise software selections and how they apply to PLM.

In Part Two of this article, we reviewed the problems in selecting PLM software from the viewpoint of the Buyers and Vendors.

This is Part Three of a five-part tutorial, that presents an effective RFI/RFP process that can streamline the selection process and avoid the pitfalls of past selection processes.

Part One Lessons Learned from Previous Enterprise Software Selections

Part Two Overview of the Problems in Selecting PLM Software

Part Three Presents a Solution

Part Four Presents Examples of Applying the Solution

Part Five Makes User Recommendations

From Words To Action

Given that a figure is worth thousands of words and that numbers are more irrefutable than postulates, it is time to illustrate the discussion in Part Two with a concrete example. Depending of which hat you wish to wear (or are already wearing), you may put yourself in a perspective of a prospective customer, vendor, or consultant.

Thetis, pdmWARE, and IDe were chosen for this particular exercise because they were the first three PLM vendors to become a part of TEC's PLM Knowledge Base, available on the PLM Evaluation Center . These three vendors make a good vendor sample because they all have unique capabilities that might be overlooked if only the biggest vendors were reviewed. TEC has compared the features and functionality of each of these vendors using E-BestMatch, TEC's patented decision support tool, which uses the Multi-Attribute Utility theory (MAU), Analytic Hierarchy Process (AHP) and TEC's patented decision science to compare vendors and products relative to one another in a statistically valid model. The tool will perform the role of the machine in the above-mentioned human-machine combination so that we can find out how these vendors compare in the various functional and technical requirements areas.

Meet The TEC Solution

TEC recently released its PLM Knowledge Base (KB), which includes 14 vendors rated on approximately 1,500 functional and technical criteria. The criteria have been isolated as meaningful to best differentiate PLM packages, based on TEC's past selection experiences. As the functionality scope covers both process and discrete industries, a broad range of application areas (from Product Portfolio Management to Technology Transfer), and as the technological questions attempt to cover many technical aspects (e.g., general architecture, degree of integration among modules, interconnectivity, data protection and restoration, security features, tools, etc.), a lesser number would likely fail to provide an accurate picture, while a greater number would involve mundane details (e.g., the maximum length of the description' field, or the capability of the system to print on 8" x 11" paper size).

The KB is powered by E-BestMatch and is accessible at http://www.PLMevaluation.com/. Among the vendors that currently reside in the knowledge base are Thetis Technologies, PDMware Corporation and IDe. These vendors have submitted a Request For Information (RFI) document to TEC either through a particular selection project or voluntarily. The number of participating vendors is likely to increase in the near future, as many vendors are still in the process of submitting their RFI documents. If you believe that your product deserves exposure through the TEC RFI Center, please do not hesitate to contact TEC about your possible participation.

Figure 1 below lists the vendors and their corresponding application suites that are chosen for this example.

Figure 1

Vendor Application Suite
Thetis ThetisPro
PDMware Webtrinsix
IDe IDWeb

Approach

TEC uses E-BestMatch to rank each vendor's ability to meet the functional and technical requirements outlined in the RFI. The first step in ranking the vendors is to organize the 1,500 RFI items into a hierarchical tree known as a Decision Hierarchy. Figure 2 illustrates the high-level criteria in the Decision Hierarchy for the PLM Knowledge Base.

Figure 2

Within each of these high level groups (i.e. Product Data Management, Portfolio Management, etc.) are subgroups of smaller sets of functional and technical criteria. For example, Figure 3 indicates the subcategories under Product Data Management.

Figure 3

The next step in ranking the vendors is to prioritize the Decision Hierarchy. This involves indicating the importance of each criterion to a technology selection decision. The percentage on the pie graph indicates the priority percentage, or how much of the total decision is allotted to the criteria, based on the priorities set by module. For example, 19% appears for Product Data Management. This indicates that the sum of the criteria under Product Data Management is responsible for 19% of the total decision. In Figure 4, you can see the sample priorities set by module and the associated percentages of each module towards the total decision.

Figure 4


click here to enlarge

Each vendor in the Knowledge Base has a set of ratings (or scores) that correspond to the end level criteria in the Decision Hierarchy. The possible ratings appear in Figure 5.

Figure 5

Responses Explanation
Supported Supported out of the box
Modification Requires modification (non source code change)
3rd Party Support Supported via a 3rd Party solution
Customization Requires Customization (source code change)
Future Release Supported in a Future Release
Not Supported Not supported whatsoever

E-BestMatch converts the ratings into numerical equivalents and uses the equivalents in conjunction with the priorities to determine a weighted average. The calculation is as follows: Weighted Average = Sum of ([Priority] * [Rating]) for the entire set of end level criteria.

For the baseline scenario all priorities are set equal, thus the priorities amongst siblings are the same at every level in the Decision Hierarchy. The Figure 6 illustrates the priorities in the baseline scenario.

Figure 6


click here to enlarge

Results

If the vendors identified for analysis were ranked using this baseline weighting, the rank and weighted average of the vendors given these priorities is as follows:

Figure 7

Rank Vendor Weighted average
1 IDe 52.41
2 PDMware 50.87
3 Thetis 48.45

These results indicate that when all priorities are set equal, IDe has the highest weighted average. IDe's score is marginally higher than PDMware and about 4 points higher than Thetis. The results are not surprising given the equal weighting given to both Process & Project Management and Portfolio Management as compared to Product Data Management. This may present a skewed view in this baseline scenario because of the unequal number of requirements in different modules, which could be corrected by using an alternative ranking methodology that takes into account the number of criteria in each module to compensate for the different size of the modules. Using the BestMatch Factor instead of the weighted average, the rank and rating of the vendors given the same priorities is as follows:

Figure 8

Rank Vendor BestMatch Factor
1 PDMware 34.63
2 IDe 28.23
3 Thetis 24.03

This rating methodology shows more differentiation, and reverses the positions of IDe and PDMware, reflecting PDMware's breadth. This analysis by itself, however, does not provide enough information to make an informed decision on a PLM product. A more detailed look at the results will reveal the strengths and weaknesses of each vendor.

The graph in Figure 9 below indicates the contribution to the weighted average for each vendor across the high level categories in the Knowledge Base, given the baseline priorities. The scale is weighted average. The sum of each node equals the weighted average in Figure 7 for each vendor.

Figure 9


click here to enlarge

The Contribution Analysis graph (Figure 9) indicates that there is very clear separation between the strengths and weaknesses of each of these vendors. Thetis, who ranked third in the summary analysis, shows their strengths by leading in Product Data Management and Engineering Change and Technology Transfer. IDe shows their strengths in Ideation, Portfolio Management and Process & Project Management. From this graph, it is clear that the best technology selection is highly dependant on the needs of the business.

Determining An Appropriate Client

The results in figures 7, 8 and 9 were generated using the baseline priorities. From these strengths and weaknesses it is possible to build a profile of an appropriate client for each of these vendors. The profile consists of a set of priorities that match the vendors' strengths and weaknesses. Note that E-BestMatch users can build unique profiles of their own organization to determine how any of the 14 vendors in the Knowledgebase rank, given their profile (business requirements and the accompanying priorities).

This concludes Part Three of a five-part tutorial on how to effectively streamline the PLM selection process.

Part Four will present examples of applying the solution to a PLM evaluation.

About the Authors

Jim Brown has over 15 years of experience in management consulting and application software focused on the manufacturing industries. Jim is a recognized expert in software solutions for manufacturing and has broad knowledge of applying Product Lifecycle Management, Supply Chain Planning, ERP, Supply Chain Execution, and e-business applications to improve business performance. Jim served as an executive for software companies specializing in manufacturing solutions before starting his consulting firm, Tech-Clarity Associates. He holds a bachelor's degree in mechanical engineering from the University of Maryland, College Park.

Jim can be reached at jim.brown@tech-clarity.com.

Predrag Jakovljevic is a research director with TechnologyEvaluation.com (TEC), with a focus on the enterprise applications market. He has over 15 years of manufacturing industry experience, including several years as a power user of IT/ERP, as well as being a consultant/implementer and market analyst. He holds a bachelor's degree in mechanical engineering from the University of Belgrade, Yugoslavia, and he has also been certified in production and inventory management (CPIM) and in integrated resources management (CIRM) by APICS.

 
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