Selecting a PLM Vendor
Written By: Predrag Jakovljevic
Published On: August 21 2004
Selecting a PLM Vendor
product lifecycle management (PLM) strategy is a must for enterprises
that live or die on the suitability, timeliness, quality, and sustainability
of the products they bring to market. To that end, PLM has become a proven tool
in increasing competitiveness amid the increased tendency to subcontract design
and engineering tasks, to rush-deliver a variety of merchandise to market for
satisfying ever-changing consumer demand, and amid the increase of custom-made
products. Hence, the enterprises that consider product development a core competency
should investigate PLM immediately to maintain their leadership in this area.
Other companies should see PLM as a necessary requirement to maintain parity
one lesson learned from past experiences is that PLM enterprise applications
should not be selected in a vacuum. The needs and requirements of multiple departments
and even business partners must be represented in the documented requirements
and also on the selection team, which should attempt to examine different functions
and methods involved in critical areas such as
product architecture and integration (i.e., support for various OS platforms
ability to integrate with various enterprise applications (e.g., ERP, SCM,
CAD, content management, e-commerce, common office automation products, groupware,
support for various standards and the manner in which the system provides
access to metadata and file system data)
document management and vaulting (i.e., support for storing documents of any
type within the system with the ability to maintain revision control and audit
trails, check-in and check-out capability, versioning, indexing, etc.)
information structures (the ability to store and manage complex information
structures, support versioning, edit in a graphical or text-based mode, make
comparisons between two information structures, and provide different views
of the information structure)
and event management
product development (the creation of product portfolios and folders, the ability
to save conceptualizations, the definition of a development schedule, the
automation of the ECO process, and the ability to collaborate with various
visualization (integration with 2-D and 3-D design tools)
project management (e.g., Gantt-based planning and management and support
for a work breakdown structure or WBS).
PLM evaluations should involve the IT organization, finance, engineering, marketing, and operations. Most firms should create a joint committee or task force to evaluate how automation can improve enterprise-wide product lifecycle management. PLM requirements should include enterprise and commercial considerations such as the ability to deliver the new product profitably, in addition to design-related criteria.
Although PLM often starts with strong engineering management (creating collaborative design platforms and streamlining the ECO process) it will eventually extend beyond it to almost all areas of corporate activity. Thus, organizations choosing PLM suites should consider both their current PLM tools and future integration with key business-area solutions (e.g., ERP, CRM, and SCM). It is important that the system handle a broad view of the product in order to promote cross-departmental use, visibility, and collaboration. Systems that are too focused on any one department may alienate potential users.
it is important to recognize that applications designed around transactions
and structured data are not built to handle the combination of structured and
unstructured information typically found in product life cycle processes. Although
most of the major ERP vendors recognize the need to offer PLM to their customers
and have a strategy to deliver these capabilities, avoid ERP and SCM vendors
that are obviously repackaging existing transactional solutions. It is important
to remember that product lifecycle management is by its nature a collaborative
solution. Look for vendors who support current, web based technologies today
to speed both internal and external collaboration efforts. Remembering that
"innovation is king," manufacturers should first make sure that the PLM functionality
that they require is available from the solutions they are evaluating. Keeping
in mind that "integration may be queen," significant value should be placed
on integration, including semantic and conceptual alignment. For more information
on the relative value of innovation versus integration, see Can
ERP Speak PLM?
evaluating the applicability of a PLM solution, it is crucial to define the
problems to be addressed in advance. Depending on the needs to be addressed
by the PLM solution, industry may play a critical role. As a general rule, the
closer the PLM solution gets to the design and production of the product itself,
and the more complicated the product, the more industry will play a role. Software
selections to support PLM initiatives that will come in close contact with the
production of the product should absolutely consider the unique needs of their
industry, particularly the industry's "fatal flaws" (see Find
The Software's Fatal Flaws To Avoid Failure). While in the final evaluation,
a horizontal application may meet the needs just as well as a vertically focused
application, the evaluation of those criteria should not be left to chance.
Look for vendors with significant history in your industries, and avoid vendors
whose solution is intended to serve too many industries outside of yours (see
Is An Industry Affair - Or Is It?).
Analyze Existing Systems First
The most important point for prospective buyers of PLM technology—or any technology—is to do a very thorough analysis of your existing systems. The buyer should determine where the corporation's business needs will be in the next few years, and how it intends to integrate the systems (do not forget that mapping data from one place to another is the most arduous, expensive, and time consuming part of the whole process, and one of the major reasons for the failure of many IT projects) before the buyer even talks to any vendor.
best start for a PLM initiative might be to create a central data repository,
further identify the most painful points and to try solving them by leveraging
existing PLM initiatives. Be careful to remain flexible and not automatically
settle for an incumbent vendor if its products and plans do not match up well
to your strategic requirements. In addition, while in this economic downturn,
the PLM activities should be focused on immediate results, one should not fall
in the trap of "low-hanging fruit" and easily obtainable short-term return on
investment benefits (ROI) at the expense of long-term strategic benefits that
are either of a "soft" nature or are of lower value in the short-term. See The
PLM Program - An Incremental Approach to the Strategic Value of PLM.
Consider Integration Infrastructure
While the needs of employees, customers, and business partners will vary, successful integration tools will need to provide access to such applications as inventory control, ERP, CRM, data stores, packaged applications, legacy systems, and a myriad of other applications. The effort will be grueling, but the returns from an integrated information portal can be significant. As with any such purchase, users choosing point PLM products should consider the integration infrastructure and effort needed to combine these products versus the cost and functionality issues of choosing an integrated PLM product suite (if one complete suite is possible to find). Mission-critical issues like scalability, reliability, manageability, and ease-of-use go without saying.
For smaller enterprises that are more inclined to rely on their ERP vendor for extended functionality such as PLM and portals, the route to PLM might be more straightforward since there are advantages in predefined and pre-built integration. In order to make a PLM selection, the manufacturer should weigh the deeper functional depth of best of breed vendors against the value of pre-integrated solutions from their ERP providers. However, do not automatically assume that the solution from your ERP vendor is integrated. Integration, particularly business level integration of concepts and semantics, is difficult work for your vendor as for you. Look for tight alignment and strategic investment from your ERP vendor.
Jakovljevic is a research director with Technology Evaluation Centers,
Inc. (TEC), with a focus on the enterprise applications market. He has over
fifteen 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.
Brown has over fifteen 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 experience in applying
enterprise applications such as product lifecycle management, supply chain management,
ERP, and CRM to improve business performance. Jim is a frequent author and speaker
on applying software technology to achieve tangible business benefits. Jim can
be reached at email@example.com.