Top Five Concerns About PLM Systems

I already had chance to mention Geoffrey Moore presentation during Google’s Atmosphere 2010 event. One of the things he mentioned that in the coming decade, our focus will be on how to make a significant shift in Enterprise IT. He used “put Enterprise IT on-fire” statement. By saying that he made me think about fundamental concerns people are experiencing when thinking about Product Lifecycle Management. I wanted to give my view on this and outline some potential ways to resolve.

PLM Doesn’t Deliver Business Requirements

PLM is hugely oversell. This is a result of competition as well as the outcome of complexity. If you cannot present a solution in real, you will oversell. There are three major forces in a company involved into the process of PLM decision making: Exec management, IT and Engineering/R&D management. Unfortunately, in many cases, these tree forces are not working as a team to figure out what they need. Management is focusing on presentations, IT is focusing on simplicity and operational headaches reduce and engineering management is focusing on how to control and manage people in short term. Such disposition as well as long time competition with ERP domain created a situation when PLM is usually oversell and don’t deliver on business requirements.

Upgrades to New Versions

This is dumb simple. To move to the new version is a complicated process. Customer’s concerns are that vendors are leaving this problem on the customer’s table. What can be done? A simple change will be to move this problem on a vendor’s side. These are very hard things to do, mostly because customers tailors and customize solutions. Another “not simple” conclusion is the right answer – technology needs to worry about that. Challenge vendors and IT with this problem.

Integration and Support For Cross Functional Processes

PLM cannot live in a vacuum. Product development needs to be tightly connected to the rest of the systems in a company. So, integration function is crucial. However, customer’s concern is that to implement it requires a huge effort and this effort is not limited to cost and labor. Integration becomes a complicated logical task and requires involvement and effort by end-users, business personal and IT. Many customers are not forcing their PLM program because of this concern. An efficient IT can be very helpful. Unfortunately, in most of the cases IT is not involved into this process and for the best case, leave this problem on the table of development organization.

Expensive Change Management

Flexibility in the implementation of enterprise processes is very important. When it comes to product development and manufacturing, flexibility plays a very significant role in the ability of companies to support changing business requirements. This is something that requires customer to react very fast. Most of PLM systems requires a significant portion of services to make a change. The way to resolve it is to move this function to end-users. It will give them ways to configure a system and make appropriated changes. In addition it will eliminate additional waste of IT.  Is it another IT on-fire message?

High Total Cost Of Ownership

Customers is concerning about PLM Total Cost of Ownership. This is not unique in PLM. In my view, this is a typical concern about enterprise software, in general. Two alternative business models can make a shift in this space- SaaS / On Demand and Open Source strategies. Another issue, worth mentioning in this regards is about the new role of enterprise IT in the organization. Enterprise IT becomes a factor to increase cost of ownership. For many companies, PLM delivered by outside IT organization or OnDemand service can be much more efficient. Sounds like IT on fire?

What is my conclusion today? PLM needs to think about how to make an industry transformation to get out of concerns. The right way to do it is to learn and apply multiple practices from consumer software space. This is hard. I’m not sure all companies will be able to do so. In the past, we had chance to see companies like IBM could rebuild themselves. Will PLM companies do so? Just my thoughts…

Best, Oleg

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5 Responses to Top Five Concerns About PLM Systems

  1. Oleg – Excellent and very timely article.

    While TCO and customized change management can be dealt with, I believe huge overselling of PLM as a panacea for all ills is the major concern. This overselling ups the expectations of all parties signing the bill for the solution but when they see the implementation of the solution they find the ground realities to be different.

    Also an upgrade to a newer version forcibly by vendors is a major issue – Usually vendors approach customers saying that the particular product version has reached its end of life stage and will not be supported anymore and whether the customer likes it or needs it or not, they are forced to fork out boat loads of money to upgrade.

    Customers on the other hand should also realize that PLM is not a quick fix solution to enable business improvements while driving out costs – a long term strategy, clear cut requirements and assumptions must be in place before approaching the vendors. Also customers must clearly define their ROI metrics before making PLM investments.

    Resolving compatibility problems between different CAD packages, ensuring that multiple manufacturing partners have the most recent software updates, conversion of existing design data, end-user training and gaining management support so that standard practices and procedures can be put into effect across department and inter-company boundaries are vital. For deep integration with CAD data it’s best to go with a PLM system from the CAD vendor.

    Airbus’ multi billion dollar problem connected with the postponement of A380 super-jumbo shows what can go wrong in implementing PLM systems.

  2. Jyotirmoy, Thanks for your comment! Try to solve all possible problems in the product development and business model built on top of lock-in customers in proprietary formats/data models are two major causes for the situation where PLM stays today. However, I see a big potential to get out of this place…. Best, Oleg

  3. Oleg,

    Very well written article, you have summarized all the concerns on PLM. Customers are looking forward to PLM vendors to give some good solutions to resolve these issues.

    I read news about Saas Model from DS yesterday, which looks to be a good step.

    Regarding overselling, I heard someone saying that “PLM is not the solution to world hunger”. These kind of comments comments come due to overselling.

    Best regards
    Surendra

  4. Surendra, Thanks for your comment! I agree, world is moving to SaaS model more and more. I think, we will see more of such examples in the coming 1-2 ears. Best, Oleg

  5. [...] Five Concerns About PLM Systems http://plmtwine.com/2010/06/01/top-five-concerns-about-plm-systems/ The question of user adoption is one of the most discussed ones in PLM when it comes to practical [...]

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