What is PLM software replacement cycle?

PLM selection is complex process. It takes time to make a decision, evaluate, build a pilot and implement PLM system. I’ve been thinking about how this process can change in the future. Navigate to my Future PLM selection post to catch up. One of my discoveries was the following data point about age of ERP system.

Bluelinkerp blog – When should you replace your ERP software brings an interesting diagram – the majority of ERP implementations is up to 7 years old. The chart based on data provided by Aberdeen study – Aging ERP – When your ERP is too old.

This data point is not scientific, my I can predict that company is replacing ERP system every 7-10 years. This number is actually aligned with similar numbers I’ve heard from ERP resellers in the past.

It made me think about replacement cycle of PLM systems. I guess we can probably see a similar trend in the PLM market too. PLM systems are aging and we can probably discover lifecycle of PLM implementations. Sort of PLM recycling. I’ve been trying to find some information to support it, but didn’t find much references online.

Joe Barkai’s blog – Product Innovation Congress 2014 San Diego brings some interesting fact about PLM system replacements. Here is the passage from Joe’s blog.

There appears to be much activity in selecting, replacing and upgrading PLM software. Some were first time PLM buyers, but there were a surprising number of companies expressing dissatisfaction with the exiting solution and seeking a “better” PLM system. I did not conduct a structured survey, but anecdotally it appears that a good number of those in search of a PLM replacement are users of ENOVIA SmarTeam and ENOVIA MatrixOne.

My observation: The continued search for a “better” PLM system will continue to drive activity and put pressure on PLM vendors to deliver greater value in enhanced functionality, lower cost, faster deployment, and new delivery and ownership models. The move of reluctant PLM vendors such as Oracle Agile to offer a cloud delivery model is but one recent example and I except other PLM vendors are in the process of following suit. This dynamic keeps the door open for vendors such as Aras PLM that continues to challenge the hegemony of the incumbents.

That being said, buyers should realize that the PLM software itself isn’t a substitute or remedy for flawed and suboptimal product development processes. For each dissatisfied PLM user company you will find many others who are highly successful and are able reap the full potential of the very same PLM software. It isn’t the SW. It’s you. Don’t blame the vendor.

My hunch most of large manufacturing companies already made few PLM system implementations. They made mistakes and probably want to fix them. In addition to that, businesses and systems requirements are evolving. People turnover is another factor. Enterprise systems lifecycle can be triggered by new people coming to the role of managing enterprise and engineering IT. So, 7-9 years, is a good time period to make analysis, fix problems and re-think PLM implementation and strategy.

What is my conclusion? Understanding of PLM software replacement cycle and lessons learned from an implementation can help to build a better PLM industry eco-system. It is less about blaming vendors of companies for software problems. It is more about understanding of business, technologies and implementation needs. Just my thoughts….

Best, Oleg