A blog by Oleg Shilovitsky
Information & Comments about Engineering and Manufacturing Software

PDM ROI: Myths or Reality?

PDM ROI: Myths or Reality?
Oleg
Oleg
24 May, 2012 | 2 min for reading

In personal life, the justification of your buying decision is simple. You want to have the next cool device, period. In business, it is different. The magic acronym ROI (Return on Investment) will be the first question you need to answer. Cost is real thing. Benefits must be real too. Last year, I posted about PDM ROI Calculator for SolidWorks. It generated interesting discussion about how possible to create a calculator to measure investment in PDM.

Few days ago, I bumped into another SolidWorks article – Top Five Return on Investment Areas for EPDM. According to is a Product Group Manager at Javelin Technologies, the areas include – productivity, error reduction, team growth management and training, sales and distribution. The picture from the article is convincing that cumulative benefits of CAD 1.5M after 3 years.

One of the key areas of saving according to PDM ROI calculator is risk reduction saving. I assume it translates into error reduction described by article. The following passage presents 4 questions that can lead us to the right measurement of error reduction.

1. How often do we accidentally manufacture to the incorrect revision?

2. What is the potential cost if we do manufacture to the wrong revision?

3. How many change orders are created a year and how many of them could have been avoided if proper collaboration processes were in place?

4. What is the cost of processing a change order?

The questions represent problems in a very clear way. To have answers to the question is the key. To spot industry numbers providing answers on the question above can be an interesting exercise.

What is my conclusion? The question of ROI and PDM is fascinating.  It is well-know fact that 60-70% of MCAD seats in the industry is not managed by PDM and use files or alternative solutions (excel, etc.) to manage data. If ROI is obvious as we can see from examples, why 60-70% of MCAD customers are still not running to buy PDM solutions. Just my thoughts. YMMV.

Best, Oleg

Recent Posts

Also on BeyondPLM

4 6
25 May, 2010

The following article Will Social Revive Interest In BPM… drove my attention yesterday. A very interesting quote made me think...

24 December, 2023

The 2023 is almost in the books and now it is a great time to share more about what I...

23 March, 2018

Collaboration becomes increasingly important for manufacturing companies. Earlier this week, the news about Airbus deal with Google G-suite created some...

18 February, 2024

Artificial Intelligence (AI) is increasingly becoming a topic for discussions in the boardrooms of companies across the globe, and the...

21 April, 2012

The discussion around the cloud is heating up. At the time, the competition gets stronger, the debate around the cloud...

26 July, 2019

Standards are like toothbrushes, a good idea but no one wants to use anyone elses. The history of engineering and...

21 November, 2021

The weekend is a good time to catch up on multiple publications and social posts. There are a few that...

29 August, 2011

Despite the fact “PLM 2.0” was first articulated by Dassault back in 2006, I think, the term itself has some...

24 December, 2008

 One of the biggest organizational challenges is to get an agreement about business and organizational processes in the context of...

Blogroll

To the top