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