In my article last week – How to avoid “focus on business” cliche in PLM sales , I introduced typical PLM business use cases. One of my readers commented by saying that in general you cannot escape the cost of running processes. Main cost factors are 1/ process development and 2/ tools. You can have great processes and bad tools. But you can also do opposite. Each individual element by itself doesn’t make much sense. The combination matters.
I can give you an idea where is PLM money in four typical use cases. I’m focusing on tools and not on your processes. But remember, you can not only think about tools. Below, I outlined 4 different business cases :
1- PLM system from a known PLM vendor.
Unless, PLM implementation went south, you will see a champion for PLM implementation created a vision and made PLM implementation a real thing. It includes relationships with vendors, service providers and support environment to keep PLM up and running.
The cost of running PLM from one of the top provider is usually well known. The variable factors are implementation services and potential issues. Major PLM provider has its own preferred implementation scenarios. The more you deviate from them, the more you will pay for them.
The answer on the question “show me the money” is an intersection between processes you defined (totally out of PLM control) and how easy to adjust PLM system to your processes. It is a complex game of power from both sides involving typically the following players – PLM champion, company business people, vendor, consulting and service (implementation) company.
2- Multiple PLM jungle
This is not an usual as you might think. Typically happened because of two main reasons: deliberated decision to implement best of breed combination of services or result of M&A activities (mergers, acquisitions, liquidations, etc.)
I will not speak about best of breed. This is your company decision. Let’s talk about situation where you forced to have 2 systems (eg. acquisition of one company by another).
The cost of running 2 (or more systems) and having bad process management in organization is high. But the devil is in details and all depends on how actually processes involving these multiple systems are intertwined. Although, this is a moment when most of PLM vendors will push into replacement, actually it is not obvious “show me the money” PLM use case. The difficulties is to transform processes from one system to another. This transformation can be more expensive than running multiple PLM systems. Without knowing the case, it is hard to say. Everyone who will say you different, will be motivated to replace one of PLM systems with another one.
3- Homegrown PLM
While I can see much less examples of home grown PLM development for the last 5-7 years, it is still a valid business use cases. In such situation, company already spent significant amount of resources developing vision and technology to support data and process management. Most of problems from #1 can be still applied here.
This is one of the most simple use cases when “show me the money” is obvious. Of the shelf tool is better for a long run. Unless, person(s) developed homegrown PLM system is still in the building, it will be much more efficient to replace. Otherwise, it is all in the hands of homegrown PLM developers.
4- No PLM
This is a variation of home grown PLM with growing process complexity and recognizing that doing business with Excels and emails aren’t very good.
An organization cannot run without processes. Manufacturing company must have something in place to order parts, create BOMs, mange designs. Otherwise, this manufacturing company is not shipping products, there is something to manage stuff I just mentioned. You might be dealing with Chief Excel Officer, paper trails or some combination of PDM system with addition of some self-customized tools. There is a cost of running these processes that must be compared with the cost of other products. It is usually not that hard.
What is my conclusion? One size doesn’t fit all. There is no universal answer on the question “show me PLM money”. To make it right, manufacturing company should identify list of potential issues and make a decision about the next steps. It applies to all manufacturing companies already shipping products to customers. And just to remind, you cannot escape the cost of running processes. It is just a question where you pay this cost – in software or bad processes. But one thing to remember, even without PLM software, you will pay the cost of running PLM software with paper or homegrown tools. Just my thoughts…
Best, Oleg
Want to learn more about PLM? Check out my new PLM Book website.
Disclaimer: I’m co-founder and CEO of OpenBOM developing cloud based bill of materials and inventory management tool for manufacturing companies, hardware startups and supply chain. My opinion can be unintentionally biased.
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