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.
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
Part One of this article, we discussed
the lessons learned from previous enterprise software selections and how they
apply to PLM.
Part Two of this article, we reviewed
the problems in selecting PLM software from the viewpoint of the Buyers and
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
One Lessons Learned from Previous Enterprise Software Selections
Two Overview of the Problems in Selecting PLM Software
Three Presents a Solution
Four Presents Examples of Applying the Solution
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.
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
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).
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.
1 below lists the vendors and their corresponding application suites that are
chosen for this example.
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.
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.
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.
click here to enlarge
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.
out of the box
modification (non source code change)
via a 3rd Party solution
(source code change)
in a Future Release
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.
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.
here to enlarge
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:
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:
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.
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.
here to enlarge
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
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).
concludes Part Three of a five-part tutorial on how to effectively streamline
the PLM selection process.
Four will present examples of applying the solution to a PLM evaluation.
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.
can be reached at firstname.lastname@example.org.
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.