PLM systems still vying for seat at enterprise table

Product lifecycle management systems are still a mystery to some C-suite executives who are unclear about its broader role in the enterprise.

After nearly two decades of use and plenty of market momentum, experts say that product lifecycle management (PLM) systems still struggle to be cast in the same light as enterprise platforms like ERP and customer relationship management (CRM), which are widely accepted for their potential to transform global business operations.

According to PLM market research firm CIMdata Inc., the mainstream PLM market grew 12.6% in 2012 to $21.1 billion. Yet despite the enviable double-digit growth, PLM is still somewhat misunderstood by C-level executives. Many are not entirely clear on its enterprise role or its value proposition beyond the management of core engineering data, noted Stan Przybylinski, CIMdata's vice president of research.

While PLM was big in a few niche industries, now everyone is seeing the need to control and put traceability into their product design data.

Peter Schroer,
president of Aras

"While PLM is more relevant today, I still think we are struggling for a seat at the enterprise table," Przybylinkski said. "There is a coalescing of what an ERP or CRM solution is, so you can actually talk to an executive about it. PLM still hasn't coalesced into any one thing."

While PLM systems were originally introduced in toolkit form, PLM vendors evolved their platforms over the years to be packaged suites of related applications in much the same vein as other monolithic enterprise platforms. Similar to ERP and other enterprise systems, PLM is as much about a specific technology implementation as it is about business process change. However, upper management is far more familiar with the benefits of business process change related to ERP or CRM implementations than they are in understanding PLM's full potential for streamlining the design process, fostering product innovation or assisting in regulatory compliance, Przybylinkski said.

"With ERP, there are easy metrics that are understandable to C-level people -- you can show how much you are saving on materials or how much machine utilization has improved," he explained. "The industry has done a bad job trying to show the benefits of what PLM does. You can say you improved your design by 20%, but a lay person doesn't necessarily understand what that gets them."

PLM systems mechatronics

Against a backdrop of escalating global competition, shrinking time-to-market schedules, greater product complexity and a focus on innovation as a core differentiator, manufacturing organizations of all sizes and across industries are casting a fresh look at PLM systems, experts say.

One of the primary motivators is the ever-increasing complexity of today's so-called smarter products, be it a state-of-the-art jetliner or a common household appliance like a dishwasher or refrigerator. Modern-day products are now designed with a mix of mechanical components along with much higher levels of software and electronics. This mechatronics combination, which allows for more sophisticated operations like self-diagnostics, complicates the product development process, requiring greater collaboration across different functional disciplines while adding a systems focus to the engineering process.

As a result, traditional siloed tools -- spreadsheets on the low end or product data management (PDM) and requirements management systems for more sophisticated organizations -- are no longer sufficient for tracking and sharing this range of product data, experts say. The change is prompting renewed interest in PLM as the central repository for managing the electronic, mechanical and software data as part of a single product record and as the foundation for building out a set of integrated business processes, according to Peter Schroer, president of Aras, a maker of PLM software.

"It's definitely becoming far more complex to design a quality product," Schroer said. "While PLM was big in a few niche industries, now everyone is seeing the need to control and put traceability into their product design data. The problem is getting more urgent, and PLM is starting to hit its stride."

Staging business process transformation

Beyond new abilities to manage mechatronics data as part of the product record, PLM systems are also evolving in a number of other directions, noted Jim Brown, president of Tech-Clarity Inc., an independent research firm. On one hand, PLM is expanding past its early niche in the engineering department to people outside of product development and beyond a company's four walls, Brown said. In keeping with the emphasis on mechatronics, it's also expanding its definition of what constitutes a product, from pure R&D or engineering specifications to a richer view that could include things like service information or test validation data, he explained.

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From a business process standpoint, PLM is moving further up and down the lifecycle, facilitating product-related processes from conceptual design to aftermarket service and support and across previously disparate functions like sourcing, service and manufacturing, according to Brown. "PLM is taking on more business processes, not just in engineering, but in product compliance and environmental compliance and sustainability," he said. "These are processes that are related to the product, but are not necessarily about hardcore form, fit and function."

While the scope of the PLM platform has expanded, some manufacturers are having better success by reining in PLM deployments, starting with small, targeted projects as opposed to trying to orchestrate a wholesale business process transformation, according to Monica Schnitger, president of Schnitger Corp., a market research company specializing in computer-aided design (CAD), computer-aided engineering (CAE) and PLM.

Staging PLM implementations to solve key pain points -- problems related to quality management or regulatory compliance, for example -- can help small and midsized companies better digest what has typically been an out-of-reach enterprise IT initiative, she explained.

"People have become more sophisticated in how they look at and interact with the technology," Schnitger said. "And vendors, which have run out of runway on the super enterprise accounts, are changing the value proposition and making PLM more accessible so companies can get to value faster."

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This was first published in December 2013

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