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How Product Lifecycle Management makes a difference in your industry: 
AEROSPACE
AUTOMOTIVE
CONSUMER
CONSUMER ELECTRONICS
DEFENSE
EDUCATION
INDUSTRIAL EQUIPMENT
HIGH-TECH ELECTRONICS
LIFE SCIENCES
PLASTICS
SHIPBUILDING
TELECOM
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The Competing Visions of PLM By Kevin P. Hopkins The product lifecycle management (PLM) market is just starting to mature, but two distinct approaches are already apparent: those that regard product development as merely an add-on to more general enterprise applications, and those that view product development as a core business process requiring a dedicated, product-focused solution. As manufacturing firms search for ways to meet the challenges of global competition, cost control, and creating value, applications like product lifecycle management (PLM) are gaining increasing interest because they allow firms to focus on their greatest asset: their products. But the concept of “product lifecycle management” can mean different things to different people. Unlike more established fields, where there are generally accepted application standards, the PLM field is still maturing. As previous articles in this series have explained, there is widespread agreement on the broad outlines of what PLM is—an enterprise solution designed to ensure that all of the factors bearing on product development are seamlessly integrated throughout the product lifecycle, from concept to retirement. This integration enables information to flow where it is needed and allows departments and teams to collaborate in real-time, even if they are in different locations. Beyond this basic definition and the understanding of the impact of this powerful solution, however, there is less unanimity on the finer details of what PLM is and what it does. For example, a recent report by AMR Research, a technology research firm, examined seven different applications currently being marketed as PLM solutions, and concluded that they were “more comparatively diverse than those of any other such product examination [AMR had] ever undertaken.” The Big Dogs Go Hunting Amidst this diversity, one class of solutions receiving considerable attention is the PLM approach being pursued by many of the established enterprise software giants. These are the “Big Dogs,” in the words of PLM Schizophrenia, a book produced by PTC, a Needham, Mass., based product development software developer that is designed to demystify the meaning of product lifecycle management and to clarify the business strategy underlying it. According to the book, “if you’ve ever seen a pack of dogs around dinnertime, you have a good sense of the PLM feeding frenzy many analysts are predicting over the next few years. From Gartner and AMR to Forrester, IDC, and more, the word on the street is: ‘PLM is hot.’” In response, the book notes, enterprise software and consulting leaders like “SAP, IBM, and EDS are scrambling to develop PLM solutions…” All of this is gratifying to manufacturers looking for new tools to help them re-energize their product development efforts. But there is a potential downside as well. As the book states, “when the Big Dogs go hunting, it can really be confusing. They trample trails, run in circles, and generally make a lot of noise—without necessarily delivering the goods.” Sound a bit skeptical? No doubt. But there is good reason for this wariness in accepting what might be viewed as the conventional, “Big Dog” wisdom when applied to PLM. One need only look to another well-established software solution that is the epitome of conventional corporate IT wisdom: enterprise resource planning (ERP). While ERP solutions have been an essential part of virtually every major manufacturer’s IT portfolio, a great many of these firms are not happy about the situation. A recent survey by the PA Consulting Group in London, entitled “Unlocking the Value in ERP,” discovered that “an overwhelming 92% of companies are dissatisfied with results achieved to date from their ERP implementations, and only 8% achieved a positive improvement in their performance.” The PLM Dilemma These less-than-successful efforts have not been due to a lack of resources. The PLM Schizophrenia book admits that “it’s hard to overestimate how much money businesses have spent on enterprise technologies over the past twenty years.” Some analysts say that ERP investments alone exceeded $20 billion in 2002—and that was an off year. “Throw in CRM, SCM, and a few other acronyms,” say the researchers, “and the numbers probably start pushing $100 billion worldwide.” Yet many manufacturers feel like they have no choice but to follow along. The book cites one business executive who laments that “we’ve already invested so much in our enterprise software that we feel like we have to look at what [the traditional enterprise software makers] are promising in the product area.” The book admits that it’s easy to see how a company would want to try to leverage the investments they’ve already made, and they clearly should. But it goes on to point out that the same approach employed for enterprise-wide business management may not necessarily be appropriate for highly iterative and variable processes like product development that place a premium on change, flexibility, and innovation. The misconception that product management requires a “Big Dog” solution arises when PLM is viewed merely as a module or an add-on to conventional ERP applications. But PLM—and product management more generally—is a different class of activity altogether. Indeed, in many respects, ERP applications can even be antithetical to the goals of product lifecycle management: because of the intrinsic complexity of ERP software, many corporate implementations focus so heavily on getting scores of contributing business processes right that too little attention is paid to the actual results of these processes. All too often, the focus of ERP-style product management becomes a matter of “product last.” The Competing Vision So what’s the other approach to PLM? It’s called “Product First.” The Product First approach, driven by companies like PTC, is built on the premise that great products make great companies. As the PLM Schizophrenia book explains, “when the mission of building and sustaining great products is at the core of everything you do, significant value will be created.” Product First places product at the center of a manufacturer’s business strategy, “creating a flexible framework for leveraging other business imperatives, such as building customer relationships, optimizing your supply chain, and allocating resources.” Product First thereby can actually help optimize existing enterprise applications and multiply their positive effects on ROI. In this light, a valuable criterion clearly emerges for judging the likely effectiveness of a software solution intended to enhance the development of products. If the solution is too heavily weighted toward business processes as an end in themselves, if it downgrades or omits the needed attention to products, then it almost surely will miss the mark, and so is almost certain to be less successful than desired. On the other hand, product lifecycle management solutions that focus on Product First, and only then on the underlying processes, are much more likely to deliver on the promise of better, more market-attuned products that generate both the top- and bottom-line results that drive manufacturing success. How can PLM solutions—and the manufacturers that use them—begin to put Product First? We’ll begin exploring that question in the next column. Order your own copy of PLM Schizophrenia today! Simply click here |
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Copyright 2003, by The McGraw-Hill Companies, Inc. |
