Selecting PLM Software Solutions Part 5 - User Recommendations

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.

In Part Three of this article, we reviewed an effective RFI/RFP process that streamlines the selection process and avoids the pitfalls of past selection processes.

In Part Four of this article, we applied the solution to a PLM evaluation analyzing 3 vendors who offer products to the PLM market and discussed the results.

This is Part Five of a five-part tutorial. In this last part of the article, we will make recommendations to users and vendors on improving the process of selecting PLM solutions.

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

User Recommendations

Perhaps the most important take away from this analysis is the significance of buyers researching technology vendors before determining the short list, while vendors should research the viability of the opportunity beforehand. Issuing a comprehensive Request For Information (RFI) to a number of vendors is an important first step in the selection process. Once the RFIs have been returned, analyze each RFI to determine the strengths and weaknesses of each vendor as well as the relative importance of each item on the RFI. This, proverbially harrowing exercise need not be that dreadful, as shown in Parts Three and Four of this article.

Experience has shown that more than the majority of functional and technical requirements show up time and time again. These have been captured for the PLM field within the PLM Evaluation Center. The remaining requirements may be peculiar to your business and industry (e.g., specific integrations to your existing applications), which need to be defined from scratch and prioritized appropriately. But, these should only be a small fraction of the entire immense RFI effort. Likewise, vendors' effort in filling the new RFIs should only be limited to filling in the additional criteria in the "delta" document.

Given the large variations in the PLM suites of both major and less-known vendors, users might be better off by skipping the painstaking process of RFP preparation, staring confusedly at vendors' responses, and trying to figure out who has the most pluses regardless of the individual importance of the functionality criteria. It is better for organizations to focus on the handful of business objectives they need to achieve and the ways to measure their success. They may benefit from turning to an objective third party expert with a tool that has an ability of translating these strategic business objectives into tactical functional and technological requirements, and, in almost no time at all, recommend the two or three most suitable candidates that should proceed straight to a software demonstration phase.

TEC's PLM Knowledge Base

TEC's E-BestMatch PLM Knowledge Base (http://www.plmevaluation.com/) includes a comprehensive set of 14 RFI responses combined with a decision support tool to reduce the time and expense of examining vendors and determining the short list, while vendors can check out how they stack up against the competition and what the best course of action in every particular situation should be.

As a summary, the following are some of the main mutual benefits that all the parties would benefit from being on the same page':

• Upfront identification of issues and negotiation perspectives, enabling more efficient and productive negotiations
  
  
• Enabling the solution implementers to be better aware of the challenges
  
  
• Enabling vendors to be aware of product gaps with client needs
  
  
• Manage expectations of the implementation results to be realistic
  
  
• Enable better implementation planning
  
  
• Enable future project discussions between the vendor and client to be processed more effectively, since past data is intact and in a form that is reusable and can be updated easily.

Make no mistake TEC does not expect anybody to acquire a crucial and costly piece of technology based only on online research, however thorough it may be. Users are therefore advised to conduct a thorough analysis of vendor strengths and weaknesses in the following major areas: product functionality, product technology, product TCO, corporate strategy, corporate viability, and corporate service & support.

The preceding analysis constitutes a high level evaluation on certain parts of product functionality and technology that should be replicated and expanded upon for the remaining key criteria areas. Only by a diligent process of evaluation that includes a number of other factors influencing the decision such as scripted scenario demonstrations, site reference visits/calls outcomes, product flexibility (e.g., customizability, interconnectivity, data conversion, etc.) can users hope to select an enterprise business system that will serve their organizations and deliver expected benefits. These are, however, more of a soft', subjective nature, and require an actual encounter with the software; this is where the human side will get the right of way over machine in the above-mentioned human-machine combination. For more information, see An Overview of the Knowledge Based Selection Process

Research is a Start

However, one has to start from somewhere, and there is no better place to start researching enterprise software than from their functional and technical capabilities. Despite the allegations that these capabilities have been converging across the range of products, and that their importance in selecting enterprise software has been diminishing by the day, that is not exactly the case, as shown in the examples with three vendors in Parts Three and Four.

Even in a hypothetical case of two vendors differing by only a few percentage points of required functionality, it is very likely that these the differences will carry a significant weight and could signal a requirement for an extensive modification effort and expense. Do you really need a sexy piece of technology that has missing functionality and will not cater to your business needs without significant modifications and system tweaking? The ramifications of this kind of selection are well known (see Should You Modify an Application Product?).

On the other hand, basing a decision only on product functionality may result in buying a system that will soon become obsolete. Advanced technology bolsters product flexibility, and often can provide tools that can circumvent the need for expensive modification (see Great Product: Too Bad The Architecture Doesn't Fit).

The Next Step After Research

At the end of the day, there is some similarity between the intricacies of sourcing enterprise software and seeking a personal partner. While no one sane (or emancipated) enough will get married based on questionnaires' outcomes and/or friends/family recommendations sight unseen, there is however, the better chance that two people with similar interests and compatibilities will connect personally and emotionally as well.

On the other hand, these initial promising signs will easily fizzle out in a personal interaction if, e.g., someone is too rigid, rough mannered, there is cultural or language barrier, or if, e.g., someone's picture posted on the web site has turned out to be several years old and several dozen pounds lighter than today (the same holds for the truthfulness of the questionnaire answers). Sometimes, the person is nice and beyond reproach, but he/she simply does not do much for you (similar to someone's users being indifferent towards the software that seemingly does what is wanted from it). Nonetheless, it is very unlikely that, an avid opera-lover and artistic person will be a good fit with a couch-potato hooked on incessantly guzzling beer and watching sitcoms or the WWF. If a personal relationship is to work, there needs to be a chemistry that cannot be captured by a questionnaire, but the questionnaire does narrow the field.

To that end, the scripted scenario demonstration phase of a PLM selection process is the perfect opportunity to put candidate packages through their paces, and TEC urges users to exercise this blind date' prerogative. However, instead of letting vendors take charge of the demo and show you their dog and pony' shows, insist on vendors unequivocally showing you how their system will help you achieve the desired objectives (see Demonstration Post-Mortem: Why Vendors Lose Deals).

Accessing TEC's ERP Knowledge Base

The list of vendors currently present in TEC's PLM Knowledge Base can be found in Figure 19. More responses are being received every week; please check http://www.plmevaluation.com/ for the most current status.

Figure 19

This concludes the fifth and final part of a five-part tutorial on how to effectively streamline the PLM selection process. For more information on using the PLM Knowledge Base please visit the PLM Evaluation Center for a free trial. For questions on the PLM RFI, please contact the TEC PLM Specialist, Jim Brown, at jim.brown@tech-clarity.com.

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.