Background
SAP's recent product lifecycle management (PLM) conference, PLM 2006, was a networking event and solution showcase for strategies and new technologies. Also showcased were solutions for product data and document management, new product development and introduction (NPDI), supplier-sourcing strategies and selection, as well as manufacturing process and quality management. With PLM license revenues of $162 million (USD) during fiscal year 2005, and high expectations for future growth, SAP is motivated to push the PLM suite forward. Consistency is the hallmark of any marketing organization; providing a clear message that resonates with the audience and rings true to the organization which develops the delivery products is an especially admirable characteristic of a software solutions provider in a highly competitive market. SAP consistently provides a message to its clients and prospects which reflects its true PLM vision and intentions. The solutions they provide, to organizations needing software tools to streamline product development and collaboration, correspond to their marketing themes. Of particular interest, and a salient differentiator in their conference approach, is the fact that SAP has woven their PLM product solutions message jointly around the new SAP SCM 5.0 product offerings (xApp Manufacturing Integration and Intelligence, as well as SAP NetWeaver and Enterprise Services Architecture [ESA]). The focal point of this message is the ability of enterprises to leverage SAP technologies for connecting supply chain processes with manufacturing and product lifecycle processes as a near-seamless operation. SAP's ability to present a cohesive solution set is founded on its applications solution maps, and on its product lifecycle management dimensions.
Four Dimensions of mySAP PLM
An examination of SAP's mySAP PLM application map illustrates its four dimensions in building-block fashion:
Product and project portfolio management: idea management and concept development, project planning, time and resource management, project execution, and strategic portfolio management. It is also worth examining some key components of this dimension:
- SAP xApp Product Definition (SAP xPD), which addresses the front-end processes for definition and management of ideas, concepts, projects, and products.
- Collaboration Projects (cProjects), which supports phase-based process methodologies; multilevel accounting; and integrations with human resources management (HRM), supplier relationship management (SRM), resource and portfolio management (RPM), financials, document management, and quality management.
- SAP xApp Resource and Portfolio Management (SAP xRPM), which allows for portfolio hierarchies, reviews, prioritization, scoring, and financial impact.
Lifecycle process management: product development, development collaboration and strategic sourcing, prototyping and production ramp-up, sales and service transition, quality engineering, and product costing. Lifecycle process support addresses requirements (as well as functional and product structures), supports virtual teams, and provides one user interface via a workbench for the computer-aided design (CAD) designer and CAD integrations. The web-based SAP PLM collaboration platform, cFolders, provides cross-enterprise processes for enabling virtual teams.
These dimensions transcend the three fundamental time horizons (new product development and introduction; maturing of the business model; and service management through to retirement), and are "stacked" over these time horizons, with supply chain management and manufacturing process integration. This provides a clear image of how SAP PLM addresses the complexities of product development through launch, production, service, and retirement. SAP has done a good job of delineating both the business challenges and the information technology (IT) challenges inherent in product lifecycle management.
SAP's PLM product development and release strategy are clearly founded on the significant advantage of integrating all aspects of enterprise. Recent PLM application enhancements have centered on improving the NPDI process through focus on the product and project portfolio management dimension, improvement of product definition integration aspects, better use of RPM and collaborative project team capabilities, better product design cost estimation (PDCE), and enhancement of the user experience through improved usability and flexibility. Furthermore, the need to streamline the entire implementation process of SAP PLM must not be overlooked. SAP has recognized this need, and has worked on defining various paths as optional starting points for initiating a PLM implementation project. These paths might depend on various pain points, such as the need to extend product structure controls, or to attack a lack of operational controls in research and development (R&D).
SAP's PLM solutions and release strategy are diagramed below to illustrate the tightly integrated components:
As this diagram illustrates, there is a rough two-year plan that heavily leverages the enterprise integration nature of mySAP.com products. This could be a hugely positive characteristic of the plan for companies using the corresponding required releases of mySAP ERP, or a potential challenge for companies using much older releases of R/3. Regardless, companies requiring PLM capabilities will always be able to migrate forward, or hire assistance in migration, thanks to the abundance of SAP systems integration partners.
Product development lifecycles are shrinking, and managing the innovation process is becoming a broader requirement of manufacturers and retailers alike. Business process innovation requires harmony among all participants, both internally and externally. SAP is driving home some crucial themes as it moves forward with its PLM vision and PLM solution strategy. These themes include visibility and control as imperatives for successfully managing product lifecycle management processes. They also include the understanding that complex end-to-end business processes, such as NPDI, must be fully supported. Additionally, compliance must be monitored and managed. SAP understands that fragmented IT support is one of the main barriers to effective PLM, and that this problem is as common among its own enterprise resource planning (ERP) installed base as for any other back-office platform. Recognizing this, SAP is assembling a cohesive set of enterprise services along with its service-oriented architecture (SOA). NetWeaver provides the ability to unify SAP xApps with partner xApps, and even with customer-developed xApps. SAP PLM customers will need to be patient while SAP assembles these intricate pieces of enterprise services architecture (ESA), and while early adopters' deployments iron out the kinks. SAP's focus on PLM innovation and productivity will be fully appreciated only when complete. As the IT market evolves, enterprises need to challenge, reexamine, and recalibrate their PLM and supply chain strategies.